How to Close A 15M Round – Interview with Mark Bidwell

Journey to Entrepreneurship - Interview with Kurt Theobald
Hiring Smart People To Get Funding - Interview with Dan Weinfurter

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Episode Summary

Mark Bidwell helps traditional organizations become more innovative and entrepreneurial in the digital economy. He helps to lead intrapreneurial change in market-leading companies such as BP Oil, the Hay Group, Syngenta, and more. Mark is also the co-host of the Innovation Ecosystem podcast, where he interviews thought leaders who are disrupting out-of-date methods, turning them into experiential growth. Mark talks about his work with Syngenta as well as how to get on the investor’s ‘good side’ on this episode.

How to Close A 15M Round – Interview with Mark Bidwell

Hi. Welcome to The Successful Pitch podcast. I’m thrilled to have today’s guest, Mark Bidwell, on with us because Mark has so much to tell us about innovation, fund raising, pitching. He actually has his own podcast called The Innovation Ecosystem podcast. He spent much of his 20 year career seeking out people and resources to help them innovate and grow businesses. He’s worked at BP, The Hay Group, which is part of Korn Ferry.

Most recently, Syngenta, where he led the creation and development of a $2 billion specialty crop business unit. He learns from other people’s experience. With his Innovation Ecosystem podcast, he brings fresh insights and perspectives and tools that you can use to get yourself funded fast.He is here to talk about how to close a 15M round, among other things. Mark, welcome to the show.

Thank you very much, John. It’s a great pleasure to be here.

You are calling in from?

From Switzerland.

Switzerland. I love it, how global the world has become. Mark, I always ask my guest to take us back to what made you decide to pursue your career. Did you know in college that you wanted to get into business and investing and raising money for startups?

No. I didn’t, actually. I’m an anthropologist by training, and the reason I studied that was because I just love reading books about different cultures and explorers and travelers. I found once I graduated that it didn’t really qualify me to do anything. I followed my father into business. He was in the food business. I worked for his home delivery supermarket startup in London. This was in 1990. From there, I got approached by British Petroleum.

I thought startup is good but actually, to get a decent graduate trainee program under my belt with a large corporation, which BP was and still is, would have made a little bit more sense to me. I joined them, was there for three years. Then I found myself in consulting because consulting I think is a great way of learning, getting a lot of exposure to a lot of industries and lot of disciplines very, very quickly. I really enjoyed that.

TSP 077 | how to close a $15M round

How to Close a 15M Round: I was in the right place at the right time and continued to help innovate in a number of different roles.

That’s where I started getting interested in innovation, business model innovation, because the consulting industry, as a business or as an industry, isn’t a particularly exciting business model. Because to make more money, you either have to work harder or charge more, and you reach a ceiling on both of those. I got involved in thinking about what other assets did this company, The Hay Group, have that they could make available to their clients?

I’ve found myself launching an internet business in the mid 90s in Europe, which was quite hard work back then. It’s hard to think of it, but it was. 20 years ago the world was very different. That got me into thinking more about business models, more about technology. I ended up going to work for the CEO in Philadelphia to help drive this program.

Finally then, family came along and we relocated from the US back to Europe, to Switzerland. I joined Syngenta to open up their biofuels business. That one thing led to another. I was in the right place at the right time and continued to help innovate in a number of different roles. I guess, I’m an accidental executive to be honest with you, John. It was never really my plan but I was continually being offered really interesting opportunities.

That took me to a place where, at the end of last year, the end of 2014, I decided there weren’t the opportunities available in that company any longer. I thought now is the time to go out on my own. That’s when I left, set up as an entrepreneur. I became chairman of one company and on the board of another company, and I’m building a business related to, but not specifically around Innovation Ecosystem. Really, helping companies and individuals become more entrepreneurial, essentially.

Wow. Let’s take a deep dive a little bit, if you don’t mind, because it’s such a fascinating story. This $2 billion Syngenta. Tell us about what that was like because it’s being an intrapreneur, it sounds like to me. You’re within this big corporate structure, but you’re being very entrepreneurial within it. Is that accurate?

Absolutely. Syngenta is the largest agri business in the world. In the previous role to that, to leading the specialty crops unit, I was looking after a portfolio of products, which were coming off patent. I was lucky enough to have a great team and a couple of quite good ideas that we were able to implement, which resulted in some really significant value creation for shareholders.

What normally happens when a product comes off patent is that the price collapses overnight, or in agriculture, it might take a couple of years. In certain pharmaceuticals it collapses overnight. Literally, as the trucks leave the Israeli manufacturing facilities at one minute past 12 full of your product. It’s an extraordinary industry.

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How to Close a 15M Round: I was able to take all the previous experiences of creating the conditions for innovation and apply them across a team of many hundreds of people around the world.

Now, in our business we are able to change that dynamic completely with a completely different strategy, related to the characteristics of the product we were looking after. As a result, we are able to raise prices for two subsequent years, patent, which was unheard of in the industry. As a result of that, I was lucky enough to be offered an opportunity to form a new business unit and grow that out. It ended up as about $2.3 billion dollar business unit.

This was servicing or looking after probably 40 different crops around the world, growing in every part of the planet, essentially. It was a hugely exciting, challenging, scary role for four years. What I was able to do John, was to take all the previous experiences of creating the conditions for innovation and apply them across a team of many hundreds of people around the world. We are fortunate enough to generate some quite exciting results as well.

It’s amazing. Were you solving a particular problem of world hunger with all these crops? Or what was it that caused that incredible growth?

I guess what we did was we thought far more about the grower and what their issues were and what their problems were. A lot of these growers were based in subtropical or in tropical environments where they were … In agriculture, I think it’s the largest employer in the world, agriculture. I think it’s something at 17% of the world’s population are directly or indirectly employed by agriculture or supported by agriculture.

How to Close a $15M Round: Their issues really are not often how do they grow their crop, but it's how do they actually ensure that long-term, they have a business so they can hand over to their children.

How to Close a 15M Round: Their issues really are not often how do they grow their crop, but it’s how do they actually ensure that long-term, they have a business so they can hand over to their children.

A lot of growers, you come from the US, there are some fantastically, wealthy industrialized, professionalized growers. They reckon there’s about 100 million professionalized growers around the world. There’s something like 500 or 600 million smallholders who are living, not quite hand to mouth, but whose family in their extended families rely on crops. What we did was we look and try to understand, what are there issues?

Their issues really are not often how do they grow their crop, but it’s how do they market their crop, how do they fund the investment in their crop, how do they actually ensure that long-term, they have a business so they can hand over to their children.

We took a very holistic view and we are able to then look at what’s available in the market and pull together a number of different solutions, which could be financial solutions. It could be traceability solutions, it could be new business models, and bundle them around our core products. That enabled us to grow our market share, as well as create more value for the overall value chain.

That’s such a huge takeaway, is you looked at something and figured out a way to see it in a different angle, an innovative way to look at something to solve a big problem, it seems like to me. Now, you’ve taken that skillset and that experience and have applied it to other things. Since this is all about how to make a successful pitch and one of the things investors look for is, obviously, rapid growth. Can you talk to us about your … Congratulations on this fifteen million series B that you’ve just closed. 

This is in agriculture. It’s an architect company based in Canada. There are number of different ways that you can look at this industry. I looked at it with the management team and we figured out that this is what … The most compelling way of thinking about this is as a platform play. This company and the technology that we have enables other organizations or other products become far more efficacious and successful and perform far better in the field with our ingredient, if you like, which is the technology.

It’s almost like in Intel Inside. If you look at it that way, you’re able to tell a story to investors, which is around, “This isn’t about how much product we can actually sell to farmers, but it’s about actually we can enable a whole new category of products to become far more mainstream in the world of agriculture. Literally around the world but starting in North America and moving very quickly to Europe.” It’s using a different lens.

I think what we did was we looked at the pharmaceutical industry and said, “Look, this is really where the biosimilars were ten years ago, which are now a huge business for a lot of big pharmaceutical companies.” Ten years ago, they were just a very very small subsegments. We used an analogy that investors could understand and say, “Look, here we are at the beginning of this curve in this industry. By the way, this is a $70 or $80 billion industry.” There aren’t many companies like ours out there, at this stage, with this technology, with this potential in front of us.

You did a couple of things there that I want to really summarize for the listeners, which is when you’re pitching, no matter whether it’s a seed round, a series A round, or in this case a series B round for $15 million, you need to paint a picture and not talk about just numbers and how something works.

Instead use analogies, see things through a different lens and then talk about how big the market is. What you’re doing is describing something that’s very disruptive, it sounds like to me, when you talked about it almost being like Intel, right?

Yeah, absolutely. When you got a huge market opportunity in front of you, like we have, it is important to get people of a glimmer of how they can actually take advantage of that in a leveraged way. Because to build out a really significant organization with a direct salesforce, with all the standard marketing, it’s going to take an enormous amount of resource.

This is about finding a way to accelerate that growth and scale that growth, leveraging some of the other dynamics in the industry that potentially some of these investors weren’t necessarily aware of. Most investors in this space have been looking at drones, they’re looking at precision agriculture, looking at water and very few of them are actually looking at this space.

Being able to bring this space into mainstream and give them a glimpse of how it could grow into something significant, was really what we, the management team in particular, the CEO did very well to close this funding. It was probably 40% oversubscribed. We were very happy with how it developed.

Wow. So you’ve really became irresistible and you had a multiple fear of missing out thing happening. You were able to select which investors you wanted to work with.

Absolutely. Now, you and your listeners will know, it’s not easy. It’s getting the first, the lead investor, which takes a lot longer than one hopes. Once that group is in place, then a number of others do fall in partly because of fear of missing out, partly because they don’t want to do a lot of the work associated with being a lead investor, and partly because you get developing more confidence and you are able to communicate with more confidence once you got the first anchor tenant on the term sheet, essentially.

Now, were you involved with the previous rounds before you got to the series B?

No, I wasn’t.

Got it.

This is the first institutional round, essentially.

Got it. Do you have any tips for the listeners on how to get that first lead investor with a pitch that makes them feel willing to be the first one? Are there incentives to being a lead investor that you give?

I think it does come back to two tips I give. Firstly, be prepared for a lot of knock backs. It’s rather like interviewing for a job, I guess. I haven’t done this for a long, long time. I do remember when I did it, that the first few interviews are an opportunity for you to polish your message and to get comfortable and confident and to hit your stride. I think it’s the same with raising money.

You’re going to get a lot of pushbacks and people, for whatever reason, are not interested in you either because of timing, either because of that sectoral focus, or because they’re looking at different bite sizes or different stages. Be prepared, be resilient, be prepared to expand a lot of shoe leather in dialing for these leads. I think the second things is, understand what they’re looking for.

It’s not about you, it’s about them and their issues and how can you actually meet their needs and give them something that they genuinely want. I think, often it’s going in and selling too hard without actually listening. There’s a reason we’ve got two ears and one mouth. It’s important to remember that.

It’s all about putting yourself in the investor’s shoes, having empathy for them, as opposed to just saying what you need all the time. Is that accurate?

Absolutely.

Some of that has to do with your own due diligence and doing a deep dive on that person’s LinkedIn profile, what other investments they’ve made, any potential people you might have in common, things like that I think really help get the rapport going, get the trust going, which is all needed to get someone to take a leap of faith with you.

Absolutely. It’s a human business at the end of the day. It’s them feeling comfortable with you. Something very subtle happens here. Unless you ask them at the beginning, not necessarily using these words, but unless you are demonstrating an interest in what their needs are, then you can come up with the most compelling pitch.

There’s always going to be something in the back of their minds saying, “They’re not really interested in me, they’re just telling a good story.” I think it’s really important to, somehow or other, demonstrate a level of empathy and interest in how can you help them, even though obviously, the dynamic is exactly the other way around. Particularly they’re sitting across from a well funded, prestigious venture capitalist.

There’s a lot of intimidation going on in the relationship because they feel they hold all the cards. I think, as you go in looking for money, have the energy that says, “I want to actually help this person.” If helping them means that they’re not going to invest in me, then that’s okay. It’s very, very subtle.

My personal belief is this is a hugely important distinction because it changes how you approach the meeting, how you hold yourself in the meeting, how you actually engage with them. Both of at a physical level, but also at a subliminal level as well, if that make sense.

Oh my gosh, Mark. I love what you just said. No one’s ever said it quite like that. What I hear you saying is you need to think of yourself as a brand and they’re a brand, and you’re equals. That you each have something of value. You may not have the same amount of money in your bank account. But as far as intelligence and integrity and character and vision, you have something to offer to them.

I’m guessing that what investors are looking for, in other words, how you can help them is by giving them an incredible opportunity and a return on their investment in a way that they hadn’t thought of. Will that be something they would want?

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How to Close a 15M Round: You want people who are locked in for the journey and who have that level of mutual trust.

Absolutely. Let’s be honest, any investor in a fast-growth company, it’s a difficult journey between the management team and the investors. It’s not going to be easy. You want people who are locked in for the journey and who have that level of mutual trust.

A bad outcome is that you, for whatever reason, you raise money but there isn’t that level of trust because at the first opportunity, it’s going to blow up. That’s bad for everyone. Again, a lot of this is how you approach the meeting and it’s got to feel right. It’s not a marriage, but think about it as a long-term relationship. I think it’s going to make life a lot easier.

That’s fantastic. Now, you also have some insights about pitching for money from large corporations. Is that right?

Yes. In my last role with Syngenta, I was looking after a lot of new products and new research and development compounds that cost anything up to a quarter of a billion dollars to get to market. Often, they require significant investment in infrastructure and assets.

I got quite a lot of experience taking big projects with many hundreds and millions of dollars of capital in front of the executives, the leaders and the boards. Even though you know the individuals and you got a better sense of the politics and the relationships, it is, in many respects, the same process. It’s being totally clear what you want out of the conversation and what their needs are and the extent at which you can match the two.

I think the other piece here, I think the why is really important as well as just the what. I think it’s trying to connect with, trying to paint a picture of what’s possible here longer term beyond the financials is quite a useful way of thinking about it. Because it makes the conversation a little bit less dry and a little bit more engaging emotionally. Because at the end of the day, these decisions for public companies are big decisions and people need to feel they can trust you as an individual.

I love what you said. It’s important to have your numbers but you have to paint a picture and give people a sense of why this is important to you and why you’re passionate about it.

Absolutely. The Simon Sinek TED talk, which is all about the importance of the why. It’s easy to forget this because we’re all business people who go and then we talk about numbers and stuff. In actual fact, comes back to what I said early on, if you can engage people at the emotional level and get them to understand why you’re doing this, I think it’s far more powerful than the what. It’s a precursor obviously for the what, but it is actually far more powerful. It moves people, John.

Yes. That begs the question, which is what is your why to start The Innovation Ecosystem podcast?

It’s a really good question. I’ve been doing this work in large organizations for almost, well probably over 20 years actually, John. I’ve made lots and lots of mistakes, learned a huge amount, I got a few scars on my back. But I began to figure out how to do this. I figured it all out for myself in the sense of there were no real resources, no go to people, no places where you can educate yourself in this stuff. It’s not easy and it depends on the organization you’re in.

Coming out of the corporate world, one of the things that I was very keen to do was to make available these kinds of resources, these kinds of insights, these kinds of experiences, to people who are doing these kinds of jobs in organizations as I was. Entrepreneurs in large mature industries with long product life cycles, how can you actually help them move the needle, have an impact beyond what they’re expected to do in their day-to-day jobs?

TSP 077 | how to close a $15M round

How to Close a 15M Round: I wanted to make available these resources, insights, experiences to people.

Because there’s a lot people, particularly as you got millennials coming into the workforce, who have been wanting to leave their mark on organizations. They’re looking for purposeful work. I really wanted to resource these kinds of individuals because there’s a lot of people out there with insights and distinctions and materials. That’s my why.

I’ve teamed up with a friend of mine who’s got a business providing information to corporations and lots of links with business schools. What we’re doing is we’re interviewing a number of thought leaders in the area of innovation, change, leadership. One of your previous guest, Guy Spier, is an interviewee. Now, he runs a hedge fund.

We’re also interviewing a number of high performers. A hedge fund manager, a concert pianist, we’ve got an explorer on, and then we’ve also got some CEOs and some executives and entrepreneurs, all talking, John, about innovation, change and leadership.

Europe is not quite as advanced as North America in the podcasting world, so we’re working to create a number of digital assets such that people can consume this not just verbally over podcast, but they can download and read transcripts and that they’ve got nice designs. We’re also creating videos of the podcast as well. People can consume them in multiple ways such that if they’ve got a need for this, there’s not a technological barrier, if you like.

It doesn’t surprise me that you’re being innovate in the podcasting world and bringing things to Switzerland and Europe that haven’t been done before by incorporating not just the audio, but the transcript and the video. Good for you. Let me ask you, what about your speaking? Because I know you’re an incredible speaker. I’ve watched some of your talks online on your website. What are your favorite topics and who’s your ideal audience to speak to?

Thanks, John. It’s not something that comes easy to me, but I’m getting a bit more practice. What I like doing is, I’ve done a number of talks to organizations and industries that are mature, slow moving, regulated. It could be a banking company, a bank, it could be a glass manufacturer. Companies that have similar characteristics to the agricultural business that I came from before.

TSP 077 | how to close a $15M round

How to Close a 15M Round: What is the mindset of the entrepreneur? How do you need to think? How do you need to articulate your purpose? How do you need to make decisions?

Just helping them understand the journey that we went on over the four years, building out this $2 billion business. One of the relevant topics that they can take away, what are their takeaways? Then we’d worked with the leadership teams and start thinking about other certain things that they, as leaders, are doing that they’re getting in the way of innovation, for instance. That’s one area.

Then the other one is entrepreneurship. I’m doing a number of talks. I will have given a number, by the time this goes out to your audience, on what is the mindset of the entrepreneur? How do you need to think? How do you need to articulate your purpose? How do you need to make decisions?

Secondly, as an entrepreneur or as a leader of entrepreneurs, how do you actually want to create this space for your team to come up with innovation ideas, to explore new concepts, in a reasonably safe environment without the fear of failure, which characterizes a lot of innovation in large organizations. Those are two topics, if you like, that I’ve got a lot of energy around.

That’s fantastic. This whole concept of helping people get over the fear of failure, whether you’re an intrapreneur or entrepreneur, is desperately needed. I’m sure it’s a topic that has everyone riveted to listen to. Mark, what inspires you? What books do you like to recommend to listeners?

TSP 077 | how to close a $15M round

Sam Walton, Made in America

I do read quite a lot actually, John. Let me think. I’m just looking around my office at the moment. I guess, biographies, first of all. The first business book that I ever read was Sam Walton’s Biography, Made in America, which actually oddly enough, I took that book and reread it before I developed the post patent defense for this product I was talking about. Because the way he thinks and the way he executes and the way he identifies his core source of differentiation was fundamental for how we transformed this product. Biographies.

I read a lot of books on, I suppose, personal development and professional development books. One of the great ones that I’ve read the other day was this book by Cal Newport called Deep Work, which I found really interesting, particularly in this always on, over-scheduled world that we live in. This is about how do you actually start focusing and do really good work in a way that enables you to really differentiate yourself from the vast majority of people who are multitasking, thinking they can get stuff done.

TSP 077 | how to close a $15M round

Deep Work: Rules for Focused Success in a Distracted World

The signs is very clear now. We are not wired for multitasking and you do need to create space and focus to actually dig into stuff, to deliver deep work in a way that is value adding. Those are some examples. I’ve got probably more books piled up that I need to read, surrounding me than I have done at any point in my career.

I think that Deep Work is a great suggestion. We’re going to put all your recommendations in the show notes for people to be able to click and buy the book or look at it. This whole concept of multitasking being a myth is another great message to put out to people. If you want to be productive and focused, pick one thing to get done before you go on to try to complete a bunch of other things.

Mark, there’s many ways that people can follow you on social media and you have multiple websites. Tell us all the ways that people can follow what you’re doing, subscribe to your podcast, etc.

I’ve just put up a new website, which is MarkBidwell.com. Then the podcast is InnovationEcoSystem.net. By the time this goes out, I think a book project that I’m working on will be pretty mature as well.

Hopefully, there’ll be a number of resources, beyond the podcast interviews, that people will be able to get access to and take advantage of. I guess most importantly, come back with some feedback to us. I’m also on LinkedIn and I’m on Twitter as well.

What’s your Twitter handle?

My handle is @MarkEHB and the other one is @InnovEcoSys. I’ll give those both to you so you could put them in the show notes so that people can spell them correctly.

Fantastic. Mark, it’s been a pleasure. I can’t thank you enough for giving us your insights on how important it is to position yourself from the standpoint of what can you do for the investors instead of being someone who’s just asking for something and really focusing in on building trust and painting a picture. Thanks again.

Not at all, John. It’s has been a great pleasure. I love your podcast. I’m very pleased that we’ve managed to meet. Let me know how I can help in any way.

Links Mentioned

The Innovation Ecosystem podcast
J Robinett Enterprises
John Livesay Funding Strategist
Mark Bidwell Website
Syngenta – United States Website
Made in America by Sam Walton
Deep Work by Cal Newport

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