TSP023 | Lex Deak – Transcription

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John Livesay:
Hi and welcome to The Successful Pitch podcast. Today’s guest is Lex Deak, who is the CEO and Co-Founder of QVentures, a network of investors as well the CEO and Founder of TENDR, which is very similar to Tinder, the dating service, except instead of swiping through people you want to date, you swipe through deals you might be interested in. It’s deal flow at your finger tips is the way he described it.

He goes on to describe one of the startups that his company QVentures founded and why they really responded to not only the technology, but the founder’s focus, likability, and leadership qualities. You’re going to learn a lot about what it takes to be a successful entrepreneur who gets funded from listening to Lex speak about these areas. He says you should listen five times as much as you talk when you’re around other people. You want to be in a room where you’re not the smartest person in the room. Welcome to the podcast.

Lex, welcome to the show.

Lex Deak:
Hey John, thanks for having me.

John:
Lex is calling in from the UK and as listeners know, I’m based here in Los Angeles, so I love the global world of investing. Lex, before we get into how you’re possibly running and starting two companies simultaneously, I’d love to have you talk to our listeners about your whole entrepreneurial spirit. I know you’ve been doing it for a long time and you’ve had many other successful companies. What is it that you think makes an entrepreneur successful, especially in the eyes of an investor?

Lex:
Well, that’s a great question, John. I mean, if you try and distill what entrepreneurial spirit is, I think you’ll fail. It means something different to everybody and it means something different across cultures as well. If you look at, you look at the world itself, entrepreneur, it’s of French origin. If you break it down, it really just means to undertake a task or to begin something and I think that’s probably, for me, where the essence of being an entrepreneur lies. It’s in getting up off of the sofa, off of the couch, and actually beginning something, okay.

There’s no, when you say you’re an entrepreneur, it’s a bit of an awkward word sometimes, because you don’t know, is this guy a billionaire living on a boat or is this guy living on handouts and dreaming? There’s no, there’s connotation as to the level of success when you say you’re an entrepreneur, but the commonality is generally that person has gone out and created something, right, so an artist in the sphere of business and commerce perhaps.

Successful entrepreneurs, in my experience, tend to, tend to have a balance of skills. They will be polymath with strong social skills, a self-awareness, importantly, an awareness around their own failings and people that they need on side to help them to create successful ventures where to fill in the gaps. Some classic lines about not wanting to be the smartest person in the room, you need to be, you need to be self-aware enough to realize where you may not be as strong as you possibly could be. You need to be determined, you need to be confident enough, but not cocky, and that’s quite a fine line to skirt. You need to believe that this person is going to knock down doors, but they’ll say, sorry and thank you in the process.

John:
I love that.

Lex:
So, aside from that, the successful ones have a commercial awareness where they’ll look towards ideas and businesses that are scalable that will generate revenues. It may not be early on, but at some point they will create value or revenues and, you know, I guess that’s probably a good starting point. There’s all different flavors in an entrepreneur, right.

John:
That’s a great starting point. In fact, we’re going to tweet out what you said as the definition of an entrepreneur is an artist in business who creates something. I love that. If you start to think of yourself as an artist and your canvas is the business world as oppose to painting something, it totally re-frames how you approach yourself self-definition goes right into what you were describing, which is the importance of self-awareness and how do you see yourself and how do you attract the right people to join your team.

The other thing I really want to tap into from what you just said is social skills, because the traditional stereotype of a tech CEO in particular is someone who may not have great social skills and you’ve addressed that in the UK with The Supper Club, which is this wonderful event and networking opportunity. Can you tell us a little bit about that and how that might help someone who is a little weak in the social skill area develop that?

Lex:
Yeah, I mean, The Supper Club is arguably the country’s preeminent entrepreneur group. You also got YPO, you’ve got EO here, but The Supper Club is an invitation-only club, which comprises around 300 members. The average turn-over per member is around 15 million dollars and in order to become a member you have to be the owner/operator of the business. You have to be the one. You can’t be in professional services, you can’t be in consultancy, and there are a few other criteria as well.

Generally all of that is in place to seek out people who are employing north of 50 or 100 people and looking to grow their businesses and so form there is generally in terms of a dinner. So, The Supper Club hosts between half a dozen to a dozen events per month. They are all intimate affairs, roundtable discussions that are shared around a specific topic and you know what, John, it’s like, I can only liken it to entrepreneurs anonymous, you know?

John:
What a great image.

Lex:
You stand up and often in business, you know, if you’re a co-founder, it’s very difficult to talk to your co-founder about certain issues. Friends and family they’ll be, you know, they’ll show you insight, but generally on the personal side of things, rather than the specifics of your sector and, you know, paid advisers are in the business of getting paid more, so their advise will probably be a little bland and in the interest of self-preservation, so a club like The Supper Club allows people to speak freely and to seek advice from their peers in this pool of strictly vetted people and some people go there and they listen more.

Some people go there and they talk more, but everybody leaves with something and I think if you are, if you’re somebody who’s at the earlier stage in their entrepreneurial career and you want to soak things up, you should seek out these sorts of groups, because you never stop learning and you should, especially as a younger entrepreneur or an inexperienced entrepreneur, you should be listening not just twice as much as you talk, but five times as much as you talk, because you have to soak so much up. It’s difficult, but you can help yourself by listening, right.

John:
Right. I mean, that’s another great tweet. Listen five times as much as you talk.

Lex:
Yeah, at least, right.

John:
So, let’s talk about QVentures, you’re the founder and managing partner, which is another fascinating highly vetted and curated network of global investors. You have, I believe, over 60 offices around the world. How did you come up with this idea?

Lex:
So, this was really in response to all that was happening with alternative freelance, the evolution of online platforms, disruption of VC. It felt like there was a good opportunity to do something in this space and actually referring back to The Supper Club and this entrepreneurs’ group, you know, the learnings from that group was so strong, I thought we could apply the same ethos to an investment network, an angel network.

So, that was the mission we set out with and we needed to partner in order fast track the growth of the network and so I approach the Quintessentially Group, which has been going for around 15 years and it’s arguably the world’s largest network of high networth with over 150,000 members and offices in over 60 countries and they, you know, they comprise family offices, ultra high networth, entrepreneur investors.

The whole smorgasbord of investors and members and I thought, well, you know, this is probably the best partnership that we could do, so we went into a joint venture and created QVentures, which is a hybrid, really of an online platform, a membership club, again, strictly vetted, and an angel network. We launched that around 12 months ago, since then we’ve done around $16 million dollars in fund raising into 14 companies, we’ve had about a dozen individuals placed on to the boards of companies so that’s the membership and the interaction aspect and we’re only just getting started so we’re now expanding our offices into the US, we’re expanding into the middle east and into Asia. We’re expanding the team, so we should be up to around 30-40 people by the end of the year. It’s going really, really well.

John:
It sounds fantastic. I mean, the growth potential and the fact is, correct me if I’m wrong, but from what I read on your website on QVentures, it seems like there’s such a need for this hybrid model, because there’s a big gap between what venture capitalists start at and what most angel investors are comfortable of giving, but the startups need money in between that amount and that’s what QVentures is solving, is that accurate?

Lex:
Yeah, that’s exactly it. We’re filling in the series A gap or I’ve heard it called the mega seed round. It is that gap between where angels will stop and VCs will come in. Super angels ultimately as well, who often are the LP in VC funds, actually, but they are seeking direct access to deals and so it’s a difficult space to fill and most attention has fallen either side of this gap, but I think there’s an increasing demand for it and it’s driven by the entrepreneurs in the business owners. Those are the ones who are building our future and we drive these sorts of demands.

John:
Right. Can you give us an example of one of the 14 companies that QVentures has funded? How did, did they come in on a pitch day or how did they pitch to QVentures to see if they’re worth of being one of the fortune 14 that get funded?

Lex:
It’s through personal introductions generally speaking. We wouldn’t discount a cold approach, but given we engage so meaningfully with our members, that personal introduction of a network, it just adds more weight and increases the chances, so one deal in particular, which is a company called Stratajet, which is, it’s essentially Uber for private jets and it’s a great business.

There’s a lot of very deep tech underneath it. They are the only ones in the space who have actually built the technology platform to enable penny perfect real-time quotes and you know, for those guys, we were just firstly blown away by the level of technology that they had built. I mean, it’s a year and a half worth of having some very clever people build some very clever stuff.

The founder had this – he was ex-military and he had this approach, you could imagine being in the trenches with this guy, everything was planned out, he knew exactly what he wanted to do. All of his business strategies had a code name as if he were, you know, as if he were still in military.

John:
Wow. I love it.

Lex:
Along with that bullishness in the organization, he’s also a lovely chap. Easy to go for a beer with and someone you’d believe in. The valuation what fairly reasonable. It’s operating in a market where there’s some huge winds and because of our association, our partnership with Quintessentially, which is a lifestyle and luxury brand, private jets fits quite well with that, so it was an easy one for us.

John:
That’s such a great example, Lex. Thank you. The big takeaways for me are that personal introduction, those warm intros, however you want to phrase it are so important, which goes back to The Supper Club and the need to network and develop your social skills and be self-aware and get this team and despite how exciting the idea is, it also sounds like you were equally impressed with the founder’s personality of being likeable, a leader, an organizer, and taking his essence, what made him unique of his military background and applying that to naming his different strategies, which then, of course, makes him memorable and I really think that’s one of the key things when you’re a startup pitching investors is you have to, you know, you hear, I’m sure, many pitches within a week, a month, and for them to really grab your attention, it has to do all those things. You have to be impressed with the product, but you have to be equally impressed with the founder, would you agree?

Lex:
Totally. Yeah, I mean, it’s the marriage of those two things. If you have an impressive founder or founding team, an impressive business, you know, as long as the metrics stack up and the timing is right and it’s in a scalable market place, yeah, it’s hard to find, you know, it also relies upon, you know, some of the things you can’t necessarily control. Your mood on the day, their mood on the day. We’ve all been at parties where you’ve been introduced to somebody who you’ve been told you’re going to get on with like a house on fire and then you’ve had a bad day at work and you turn up there and the other guy is not feeling very friendly and you think, ah, this is no good.

You catch somebody when the sun’s out on a barbecue and you’ve had a couple of beers and suddenly this guy is your best friend and you love everything about him. So, you know, there are these planets aligning aspect to things which I think people need to recognize and, you know, it is a small part of it, but it does play a part.

John:
Well, timing is everything. It’s from, you know, whether a joke works or not in comedy to whether you click with somebody in a dating situation or whether you click with someone in a business professional relationship. You can increase your chances of clicking by making sure that even if the person you’re meeting is in a bad mood, that you’re not, right?

Lex:
Yeah, absolutely. That you can control, you’re right.

John:
So, let’s talk about TENDR. I mean, my goodness, you’re getting all kinds of press and excitement around that, congratulations. I’m wondering if Supper Club sort of lead you to QVentures and I’m wondering if QVentures is what allowed you to say, you know what, there’s yet another need that I see here in QVentures, This sort of one stop shopping for crowd funding, seems fantastic. I’d love to hear where it came from and what you’re doing with it.

Lex:
Yeah, great, well, you’ve already hit on a personal point on it is a logical progression and I think just a word of advice to any founders who have multiple interests and like to explore things, if you can keep those things fairly aligned to one another, then you’ll sleep a bit better at night, because there’s synergies in what you’re doing, you know, if you want to have a bagel stand and you want to have a tech company and you want to have a travel company, you might struggle to control them, but anyway, yeah. TENDR is this great aggregation play in what is becoming quite a fragmented market place. We’re lucky in the UK in that our – the legislation here is allowed for crowd funding and it’s a favorable environment for doing it and London is such a hot place for fin-tech.

I know Title 4 and the Jobs Act is now allowing and opening the doors to crowd funding for equity in the US, but it has been incredible evolution over the past two years here to watch these platforms spring up and do deals. Do serious volume, increase employment, empower entrepreneurs, create all these new businesses, but as an investor, its, you know, there’s noise out there, right. I mean, we all get inbox fatigue. You know, getting something landing your inbox from 15 different platform, there’s a good chance you’re not going to get around to it and it’s becoming more difficult.

So, in my mind, there’s a need for an aggregator and it was important that aggregator was frictionless and really simple and ultimately and this applies in so many deals, the essence of the deal can be boiled down into a five or ten second sound byte, so if I had an idea that this deal might be, I’d call you up and say, John, we’ve got this deal. It’s Facebook for dogs, Warren Buffett is investing, it’s 90% funded.

Now, if you’ve got a lean towards that kind of a deal, then that’s enough information to get you to the point of saying, hold on, actually, yeah, maybe I’ll grab a coffee with this guy and find out a bit more about it or I’ll get so more information. If I sent you all the information in one go, you’d think, well, I’m going to wait until the weekend until I’ve got some time and then I’ll get on to then.

So, I had the idea for this actually about two years ago. I initially wanted to build an app for QVentures, but my stake holders pushed back and said I might be over engineering solutions for a problem that wasn’t there. I slightly disagree still, but I’m happy, you know, I can console myself that we now have TENDR and so it took awhile to kind of come from being an idea into realizing that and we started work on it the beginning of this year, maybe around Easter time.

I had the support of the platform, so that was key, so a lot of – you know, when you build an aggregator, there’s an element of cheek around it, like you’re trying to shortcut or you’re trying to leverage the work of other people and you’re just trying to sit on top and I think that can be true, however having built my own platform and having great relationships with all of the other platform owners, I was in a good position to say, guys, look, let’s build something here as a tool for the ecosystem, as a tool to drive new investors and to increase transparency and I got them on board and that was great, because it said no to all the other approaches that they had had from people trying to build aggregators, so we set off about doing that.

We’ve got the two main platforms in the UK, the biggest platform in Europe, half a dozen other sort of secondary and then half a dozen sort of tertiary platforms below that. We launched just over two weeks ago. So far we’ve had around 150,000 actions taken from the app, so that’s a like or a dislike or a share. So, great numbers. We’ve got users in around 30 countries now.

John:
Oh my gosh.

Lex:
Yeah, we’ve got inbound interest from the primary platform owners in, gosh, in Israel, in Singapore, in India, in Australia, in Spain, in France, in Hong Kong, and a number in the US who are now looking at getting involved, so we’re going to move very, very quickly and we’ll be international within the next couple of months and then we’ll also start to add on other opportunities, so equity is really interesting, because there’s content around it, but investors may want to also see debt opportunities, loan opportunities, invoice factoring, and so it’s really easy for us with the API we’ve built to work with the platform owners in presenting those, so yeah, it’s really, really exciting. I’m over the moon with the progress that we’re making, but we want to build this into a serious billion dollar business and I believe that we can.

John:
I believe you can too with your track record and what you just described. For the listeners, just so they know, it’s TENDR, which is a play on words. It’s spelled slightly different than Tinder, the dating app, but TENDR, without the E at the end works like Tinder, the dating app as you swipe through the deals, correct?

Lex:
Yeah. It’s basically tinder for deal flow. Really, really simple. You swipe right if you like it, you swipe left if you don’t. You can have push notifications once you’ve liked deals reach a certain percentage of their funding target. You can change which platforms you want to see. It’s all really nice and lightweight and attractive. I should say at this point that actually there is another business in the states called TENDR, which is spelled the same way and I would just like to take the opportunity to make sure people understand the difference. TENDR.com, you can go to and create wedding lists or rather, you create cash gifts for couples that are getting married. It’s really elegant, it’s really nicely designed. I wouldn’t want to take any traffic away from those guys, but we are TENDRDeals.com and hopefully people won’t get too confused.

John:
Great, we’ll be sure to put that in the show notes with the exact correct link for TENDRDeals.com. What you said earlier, I just want to recap, because there’s so many valuable things when you’re describing Tendr deals. Inbox fatigue being the big problem solve, getting a no from the QVentures people did not stop you, and finally, this whole concept of if you can’t give me a five or ten second sound byte to intrigue me enough to want to know more, then I have to put that off into when I have time to really do a deep dive to understand something and what TENDR deals is solving, it seems to me, is this quick sound byte concept with something that people are used to doing, which is swiping through and saying yes or no. So, you’re not asking people to do a deep dive just whether they’re initially interested or not and then they can come back to it, right?

Lex:
Exactly that. It’s a bookmarking tool. It’s not intended to be the basis upon which people make decisions. Of course, early stage investing is a fairly risky business and it’s important that people are aware of the risks, but as a tool for bookmarking to revisit later, probably on desktop and do a fully interrogation, it’s a great tool and not just for investors, it’s also for entrepreneurs who want to stay abreast of what deals are out there and what’s getting funding for journalists who want to stay on top trends, even for service provides for recruiters and marketers who will be looking at these companies listed as targets and potential customers in the future.

John:
One of the things that’s impressive to me is the fact that it updates people on how far a deal is being funded without you having to physically go back every time. If you said you like something then you get an update as a continues to get closer to the funding amount, is that accurate?

Lex:
Yeah, that’s it, exactly.

John:
So, that gives a huge value too, because let’s face it, people like to be apart of something successful and don’t want to miss out, right?

Lex:
Yeah, yeah.

John:
So, the more they see something trending, they’re like, ooh, I better get on that, right? So, that’s a huge time saver for people.

Lex:
Yeah, it is. I mean, there’s the, you know, it’s basic psychology and investors are no different, right. We hurt. We follow the leader and that’s not a bad thing. It’s an important evolutionary principle that you need to follow somebody and the assumption is if a enough people follow then that leader must be going in the right direction. I know there’s plenty of political debate against that being a good thing, but that’s probably not for now.

John:
Right, so for startups to – it’s a great source to see what people are obviously interested in investing and if they want to be part of what people are looking at on Tendr deals, they should be part of other crowd funding elements, because you’re aggregating that. There’s no way for someone who’s not part of something that you’re aggregating to get involved, correct?

Lex:
That’s correct, yeah. We only want to promote deals that come from reputable platforms that have the relevant compliance and regulations. Yeah, you would not be able to list directly on Tendr, it’s only via our partner platforms.

John:
Great. Lex, this has been so incredibly interesting. The last five minutes or so that we have left, I want to ask you some quick takeaways. One of my favorite questions to ask people like you is, what kind of books are you reading either to keep yourself inspired as a person, like the self-awareness you talked about earlier or what books do you recommend for startups who are looking for funding?

Lex:
Oh, well, I’ve read a lot of biographies, autobiographies of business leaders. One of my recent favorites would be Warren Buffett, Snowball, which is a great read. It’s a thick book, but it’s well worth it. I’ll read a number of self-help kind of self-improvement books or books to raise your mindfulness and awareness. The Chimp Paradox is fairly interesting. I will read books around my area if it’s something relatively new to me, so at the moment I’m reading a, it’s actually a Big Data For Dummies book.

John:
You’re hardly dummy, Lex, but okay.

Lex:
It’s just, you know, it’s a nice way to get a broad feel for a new space that you might be entering and then anyone who has been successful in that space, I recently read Peter Thiel’s Zero to One startup book. I think, it’s important when you read these things to remind yourself of your own perspective on what it is you believe. You can’t take all these tidbits and bits of these anecdotes as given. You know, I disagree with a lot of what I read, but I think you just need to soak it up, diversity is the key, right.

John:
Ah yes, well there’s a great quote right there. When you’re reading something, the whole perceptive is diversity, you don’t have to agree with everything, but it gives you a perspective broader than your own and you still filter everything through what works for you. The other thing I really love that you said is, if you’re going to be someone like you who runs multiple businesses concurrently, make sure they are in the same genre, so that you can maximize your contacts and expertise. That’s such a great one. So, how can someone follow you on social media, what’s your twitter account, what, you know, if investors are interested in being part of your Supper Club or QVentures or how do we, you know, how do people find Tendr Deals.

Lex:
The social bits, if you want to follow me, it’s @LexDeak. If you’re interested in our super angel investment club, that’s @QVenturesCo and if you’re interested in Tendr Deals, that’s @TendrDeals and there are all fairly active accounts. My own one is mostly about those two businesses, but often musing about various unrelated things, which you may or may not find interesting, I’ll leave it up to you.

John:
I’m sure we will. Anything that enters your mind would be of interest to anyone who is in this world. It’s been fantastic having you on the show. I’m looking forward to watching the success of Tendr go stratospheric, I’m sure it will globally. Congratulations on such a clever and unique app.

Lex:
Thanks, John. That’s all very kind and thanks for taking the time and it’s been great talking.

John:
Wonderful.