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Carolyn Breeze: CEO of Scalare Partners

28th November 2023 | 1 hour, 3 mins

In this episode, Carolyn Breeze shares her career journey through the world of tech and payments. Starting at eBay, she gained experience at large Silicon Valley companies before becoming Country Manager for Braintree in Australia. Her passion for payments grew as she helped expand GoCardless’s services down under. After a stint as Chief Commercial Officer at Zepto, Carolyn took on the CEO role at Scalare Partners – an early stage investment firm with a unique model.

Carolyn outlines how Scalare differs from traditional VC firms by taking an active role in helping their 26 portfolio companies. She also provides advice on taking on new challenges to expand skills, even if you feel underqualified. The conversation covers the sacrifices of being a startup founder, the importance of founder self-care and salaries, and why founders deserve the opportunity to benefit financially from secondary sales. Carolyn reflects on her learnings so far and the value of ongoing education and resources. Tune in for an insightful chat about thriving in tech, the payments space, and the world of startups and investing.

 

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Transcript

Welcome to another episode of the NTP podcast. On today’s episode we have Carolyn Breeze, CEO for Scalare Partners. Welcome.

Thank you. Thanks for having me. All right, for those of our audience who don’t know who you are, give us a bit of an overview of who you are and your career journey.

Yeah, yeah, sure. So currently the CEO of Scalare Partners. I’ve been with the team since January, the start of the year, but known them for a really long time.

I’ll get to them in a minute and kind of how I got to this part of my career. But for the last ten plus years I’ve been working in tech in my early days. So my kind of growing up days, I worked at Ebay for a few years and then I worked at Braintree and then PayPal.

So I kind of, I guess grew up and got all of my learnings in the US kind of tech post Silicon Valley giants. So, you know, I still use a lot of American terms like all hands that my team carry on about, know the occasional high five. I still haven’t brushed those things off, but it was a really good time for me.

There were new industries. It’s not like you’d go to Uni or school and think, hey, I’m going to work in big tech out of Silicon Valley. But what was really great about those companies is they allowed me to try different roles within the teams and flex different muscles and learn about different parts of tech while in the kind of safety of the same organization.

So really, really good years. When I left Ebay, I went to be Country Manager of Braintree, which was a credit card acquiring tech stack that had been purchased by PayPal. That was a lot of fun because they still operated as a small startup.

They were down in tankstream, there was a handful of people doing amazing work and they’d been purchased by PayPal. And Australia was one of the last kind of franchises, I guess, to be merged in and amalgamated into the world. That is the yellow button.

So that was a really fun time. Kind of gave me a taste of what working as a startup is and then going into a bigger, larger organization and pulling that team apart and setting them up for success. So lots of fun.

By then I had definitely got a taste for payments and become pretty passionate about payments and one area I had not worked in was bank to bank payments. And so you would have seen over the last few years there’s been a lot of transformation in that industry. Globally in here in Australia we’ve got the NPP, the Real time payment network, and globally open banking is maturing and all the kind of bells and whistles that come with that.

And I’d come from credit card acquiring where they had all the bells and whistles and all of that stuff. So I was know this is really interesting space and I met a company called GoCardless who were a UK based startup and they were expanding into Australia and New Zealand and I jumped in there for a few years and led that expansion and built out that company. Learnt a lot about bank payments, a lot about direct debit and all those clunky kind of old traditional systems that we use in Australia to move trillions of dollars around every year.

But again, it was a good opportunity to be almost first boots on the ground, build out all those functions for a scaling startup. And the last raise they did when I left I think was their Series G. People do go that far, 312,000,000 on a two bill val, so they’re doing really well and the team’s still thriving down here in Australia and New Zealand.

So that was a lot of fun. In my last few months there I got to know very intimately another payment tech company in Byron Bay called Zepto. Fell in love with the team, fell in love with what they were building around the MPP and real time payments and they had ambitions to expand globally.

So I thought, well, I’ve done that for other companies coming into Australia many times. Now it’s the time that I get to kind of go and share those learnings and help them grow and expand their business here and overseas. So I went over there and I was there for about two years as Chief commercial officer.

That was a lot of fun and I was like oh, that would have been great working for a Byron Bay company and it was. I got to get to Byron Bay every now and then. But yeah, it’s hard work being in an Australian tech startup that’s scaling and has global ambitions and we had a very successful Series A when we were there and that team is still kind of firing on all cylinders, so a lot of fun.

And then at the back end of last year left Zepdo and I thought okay, what’s next? And I kind of looked around and I looked at do I go back into e commerce thinking of my PayPal and ebay days? I still have a lot of friends in the industry and know do I stay in payments where I’m really strong and really believe in the real time payment network and the efficiencies that can bring. And in the meantime I’d been getting to know this business, Scolaro Partners, who are an early stage investment firm in early stage tech. And over the last ten years, just through the exposure I’ve had with the brands I’ve worked for, I’ve done a little bit of investing myself in early stage tech.

I sit on a couple of boards. I’ve been a startmate mentor a couple of times. I’ve been an Air Tree network advisor, an investor.

And the Scolari team really impressed me with the model and the way they invest and what they do. And it’s unlike anything I had seen in the market. And I’ll get to that in a minute.

And I thought, Hang on, this is almost like the merging of both my worlds. Because I was also thinking, do I do a bit of contracting work? Because I’ve got so much on the commercial growth side to know how can I spread myself out to more companies? And so I feel like the partners of Scolaro who started the business three and a half years ago almost gave me like a magic gift. They’re like, here’s this amazing firm that invests in early stage tech and we help them, we roll our sleeves up, we get in and help them scale and grow.

You’ve got a commercial growth background for tech startups and you love investing in early stage tech and they’re also a fantastic team at Scolari. So yeah, made the decision to jump in there. Beautiful.

It’s quite a journey. As you said, where you’re at now is pulling from your different experience skill sets to now allow you to tick my old school boxes. Yeah, and learning a lot because Fintech had been my background for so long.

But there’s a handful of fintech in the Scolari portfolio but there is so much more. There’s agritech and health tech, edgy tech and so on. And so I’m just amazed at the types of organizations that Scolare has invested in and even the ones that we get to meet and that pitch to us.

We have 26 in the portfolio. We invest typically in one every month and we’re probably in due diligence with a few every month. But there are so many fantastic companies that come across our desk and if only I had more money.

I found it really hard saying no in my first three months because I’ve come from that side of the fence as well. I just wanted to give everybody some money. Like how can we help everybody grow? But our mandate is very specific and it’s based a lot around the tech vertical that they’re in their ambitions and ability to scale globally, the founder themselves.

Like we really back the founder and if we think we can help them grow and that they’re there, they want to listen to us and learn off us. So what makes us different to a lot of the tech companies that well, the investment firms that invest in tech is in the Australian market in particular and it’s not unlike this in other parts of the world. You’ve got your very early stage like boot camps, like your startmates and you’ve got your university programs and things and then you’ve got your typical venture firms who raise money into a sidecar, take a management fee and they deploy that money.

And as those companies grow they have to play in a bigger space. So they move out of seed and they move into like series a Series B and so on because they’ve got bigger funds to manage, bigger checks to write and they don’t get as kind of hands on as like a boot camp type would. And so what you end up with is this really big gap in the middle where there’s a lot of tech startups that are like I’ve bootstrapped to date, I’ve done the boot camps, I’m not ready for a Series A.

I monetized my product. I’ve got global ambition. We’re a small lean team and we really want smart money.

So we want someone to come in and write the first or second professional check. We want them to actually get involved in our business and help us. We want advice, we want doors opened.

So we place a Ned on their board and bring some governance. We wrap our arms around them and get really involved in their business. And we’ve also built out a bunch of fractional services that they can leverage.

Beautiful. Yeah. So they don’t have to necessarily go really hard on those big headcounts up front when they’re still finding their feet.

We’ve got like a fractional finance team, we’ve got a fractional sales team with marketing and PRS on the roadmap, HR Tech and so on. We’ve got Grant Writer so they can really leverage us at a fraction of the cost of doing it themselves or kind of going to other fractional services in the market. And when investors invest in Scolare, they’re investing in our business and we actually write those checks off our own balance sheet.

So we don’t take a management fee. That’s not our structure. So we’re as invested in the success of the startups as our investors are.

It’s not a sidecar observers. We are very involved and very particular about who we invest in and about bringing that community together. So it’s quite unique.

I bet you mentioned international growth or international aspirations. Quite interested to hear the challenges for Australian based companies in obviously growing internationally. Obviously Australia’s got its and we’ve had some big successes from the Australian startup ecosystem, but it’s definitely a challenge still being here in Australia.

Like, I’ve heard of a lot of companies who have to go and establish an office in the US or somewhere in Europe, but predominantly in the US with a lot of them as well and have a proper established team over there. Can you still do it from Australia or is that just part of the growth? It can grow here, get some runs on the board there and establish a team overseas. So many factors that go into that and one of them I’ll pop down and then remove straight away because sometimes for the wrong reasons, sometimes for the right one.

But if you are raising seed capital or even a Series A, it is sometimes the overseas investors that come to the table. And in a lot of those cases they really want a presence over there because they understand just the geographical population differences between the Australian market and so on. But I think a lot of it also comes down to the vertical win.

There are some really lucky or fortunate tech startups in there that are say in SaaS platforms, right? It’s a very easy deployment to test whether or not there’s going to be organic takeup of a SaaS platform and then you’ve got ones that are at the other end of the scale. So something like a fintech where there’s licensing involved and there’s treasury partner banks and acquiring pieces and things involved, where it’s a lot harder to set up in those markets, establish a presence and kind of there’s a bigger investment up front. And then there’s also the question of, well, where do I set up and how do I set up? So I kind of break it down into three ways to do it.

Do I put a kind of all hat wearing country manager boots on the ground which is what I’ve done a couple of times. Someone that’s prepared to take a customer service call at 11:00 p.m is also going to kind of meet with the bank and get the ABN and everything set up and make those first sales calls or do I partner in market with someone? Whether it be a go to market commercial relationship, whether it be an integration partnership.

And that is always something that I think is often missed when people think about approaching a market is who is a non conflict, contradictory platform or organization that is targeting the same clientele that your product does, where you could be an easy switch on as a plugin or you could actually partner commercially so that you can test the market with that partnership before investing. Headcount it’s a really good way to do it. The other way is to maybe hire someone in a part time capacity who’s maybe a senior executive with a bit of presence, bit of clout and some great contacts and get them to start to build out and open up doors.

But when you’re a startup and you’re in that stage a lot of what you spend doing in your researching time is leaning on people like investment New South Wales or launch Victoria and government and different partners to kind of get those insights and research into expanding overseas and sometimes the buck stops there. And my advice to founders is always there are so many ways for you to gather that information and you would be surprised how many startup hubs even overseas and would welcome you and give you information. An example is the Atlanta as a city are really advocating for being a bit of a startup hub themselves.

They want to compete with Austin and they want to compete with San Fran and New York and so on and so they’re actually creating a program and we actually caught up with them a few weeks ago where they’re like we’ll have people come over here on the ground, we’ll show them what Austin can deliver. We’ll show them so not Austin. They’re going to hate me for that.

Atlanta can offer. We’ll show them what it’s like to set up in the US will help get those first contacts and open those doors for them. And that’s what you really need in an international partner.

So it’s totally doable, just depending on the product and where and how. But partnerships is always the one I’ve seen work like the fastest. Yeah, that and having access to some of them, like your team.

I guess that’s another value add. Right? Is that some assistance? Know, what sort of model are we going to go with? How are we going to get that first runs on the board? All of the partners, there’s three founding partners in our business, james, Nick and Giles. And all of our backgrounds were operators.

We’re not ex consultants, we’re not ex VC guys. We’ve all scaled, run, sold, listed tech companies. That’s our background.

And we have a great network. So we have 300 OD advisors in the Scolari network that we call on for different things. It could be to open a door, it could be to talk about US expansion.

There are other boutique firms that we work with in the US and the UK so that we can help leverage those relationships and open doors. And some of our investments aren’t Australian based as well. We’ve got Holland UK, US, Singapore and New Zealand in our portfolio as well, so we do have a lot of experience and where we don’t, we will know someone that does.

Yeah, right, fantastic. I’ll stay on the Australian piece for a second. The market’s changed a bit over the last couple of years.

Obviously, from VC perspective, we’ve definitely seen, I think it was the back end halfway through back end of last year as well. I think a bit of a transition started to happen. Seemed to be the general market consensus.

Is it’s a bit harder to come across money at the moment? Really keen to get your understanding of where or your opinion on where the current market is from VC perspective. Is there money still there? I think it’s certain you have to show different things at the moment to get different rounds. Whereas maybe it was a little bit easier in the past.

Just keen to get your understanding and opinion on where we’re currently at because we’re in the seed space, kind of early professional check landscape. It has been more difficult to get money and a lot of the larger firms who depend on institutional funding, it’s been a little bit not been easier by any means, it’s been harder for them as well, but it’s much easier for a superannuation fund to write a $50 million check. It’s as hard for them to write a $5 million check.

Right. So they tend to go with the larger firms and so where we get our capital from is a lot of high net worth and family office and they’re feeling the effects of the macroeconomical environment in the same way that we all are as individuals. And they then decide to make different choices with their income.

Right? So they’re like, is property a better way to do it, or bonds a better way to do it? Or is gold? Gold is often coming up in these conversations, so they’ve become a little bit more risk adverse to this market, but the money is absolutely still there. And the most interesting thing that I have seen over the last couple of years is founders have changed the way they look at asking for capital as well, and the type of capital they will take. And so three years ago, you might have had a 20 to 30 X multiplier on your top line revenue as the way that your company was valued, right? Yeah.

And now it might be a two X multiplier on your EBITDA. Right. So it’s changed dramatically.

But what that has bred out or bred in is founders are much more switched on about what it costs to run their business, what they need and maybe don’t need, like what’s a luxury or an accelerator versus what I need to keep the lights on. They’ve become a lot leaner. Now, I’ll have a founder pitch to me, and they’ll know their run rate, they’ll know how much capital has been injected into the business to date, they’ll know what they’re going to spend the money on.

And I challenge them. And some of them do know, if you don’t raise the 2 million you want and it’s a million or 500, what are you going to do with that? And how do you still reach your goals? Whereas two, three years ago, a founder would have not maybe not even known their burn rate or how much they had in the bank. Right? So it’s a very different conversation and it’s very founders are now very good at being able to articulate the spend that they’re going to deliver and the return that they will see for that upfront.

Whereas what used to happen is you’d raise the money and you go, great, we’ve got all this money, we had these three things we were going to do for it. Now how are we going to spend it? Yeah, money was so readily accessible as well for a lot of people. And I was like, okay, we’ve got the runs in the bottom, let’s raise while we can.

Exactly. Whereas now people have like and we asked for this anyway, but many of them have it. They’ll have like a forecast PNL where they’re actually able to say, the money you deliver me is going to be spent in this way, right down to travel expenses.

Like, they’ve got it all nutted out. The other thing that founders have become a lot savvier around and we’re very, very good at coaching as well. I met a fantastic founder this week with a great tech product and in the services industry, and he said, we’re raising 2 million.

And I’m like, right, what are you going to spend the 2 million on? And he talked me through it and I said, Right, what would you do if you got 1.51 or 500? And we kind of talked through the different elements and what it would do to the growth trajectory of the business, but it was still doable and there’s still a path to profitability, right, which is really exciting. It was just how long it would take to get there.

And then I said, So have you thought about nondilutive capital? And he said, oh, yeah, we do our R and D tax stuff. And I said, There are so many other forms of nondilutive capital. So particularly when you’re raising, matching grants are the key.

I can’t tell you how many times a founder has come to me after they’ve finished raising closed around and they’ve missed out on a matching grant because they just didn’t know they existed. There’ll be state based ones, there’ll be federal ones, there’ll be incubator ones. That’s your time.

You raise 500, you get 500, and it’s nondilutive capital. It’s fantastic for founders. The other one is understanding what to borrow for, so what to go into debt for.

And I know debt equity sorry, not debt finance and loans are high at the moment because of the market we’re in. Like, I think the average is like a 14% interest. But invest with my investor hut on.

Investors don’t want to pay for secondaries, they don’t want to pay for other debts within the business, tech debt. They don’t want to pay necessarily even sometimes for marketing stuff. They want to be investing in and taking equity for things that are going to grow the business, product development, expansion, go to market plans, those kinds of things.

So anywhere where you can take on debt for some of the stuff that you know is a no brainer, like, I spend $25 to acquire a customer, a customer gives me 75. Great, borrow it, don’t ask an investor for that. Whereas I’m going to build this product, it’s going to deliver unlock this much revenue in a new market for me and I’m going to expand to the US.

That’s what you’re borrowing capital for, like off getting equity off an investor for. So it’s educating founders and I think they’re becoming more savvy because they’ve had to people, some founders that have been in business for three or four years have just maybe applied for their first non tax related grant this year, but they’ve been there the whole time. So it’s understanding that, yeah, I like it.

While we’re on the theme of advice for founders in the current market, has that changed or has your advice piece changed or do you have any advice for a founder in the current market that may have read mainstream media understood harder market at the moment to raise money in. What’s your biggest pieces of advice for a founder at the moment? Looking to raise some money? So I’ll premise that by saying or seed round in particular. Yeah, seed rounds.

I’ll premise that by saying when I talk to our investors, what I tell them, which is what we’re seeing is that now is actually a really good time to invest because there’s been that change because founders now understand those financial metrics a bit more, because valuations are lower, multipliers are lower. It’s a really good time to it’s actually a great time for us. It’s hard to say because it’s a really hard time for a lot of our founders, but God, it’s a great time to be an investor.

The other thing that’s happened is it’s not glamorous at the moment to be an investor. It’s hard yards, but really good founders and innovators don’t stop having ideas because the economical market has changed, right? They’re still out there innovating, they’re still building, they’re still growing tech companies. And so the ones that are there are fantastic, and we’re seeing the most amazing founders come through the business.

So I’ll premise it with that. But I think for the founders, it is understanding those financial metrics. When you come through, if I think about the kind of mental checklist I run through when I meet a founder, it’s, why does the business exist? Like, what are you solving? And more importantly, how are you as a founder connected to it? Like, what’s the origin story? I love it when I hear this happened to my sister and I realized there was a gap, and I know there’s other women out there or other men out there, and I decided to fix it.

And I want this to be my life’s work versus I saw a financial gap in a market that people weren’t addressing and all that kind of stuff. So understanding your why, why you’re doing it, what draws you to it, because investors invest in founders as much as they do businesses. The other one is to understand those financial growth metrics.

Have bootstrapped yourself to date enough that you’ve monetized the product, even if the commercial framework isn’t quite right and needs tweaking. There’s been a value exchange. Someone has said to you, I believe in what you’re doing, and I’m willing to spend money on it.

So understand that and have tried and tested a few things so that if an investor says to you, right, if I give you more than what you’re asking for, what could you do? Like, understand what levers you could turn on, understand what you actually need to survive and how you’re going to spend the money. The other thing is, have an understanding, an educated understanding. Do your research into what a potential exit could look like, because a lot of investors start thinking about that the moment they invest in you.

So what does a good outcome for Carolyn, the founder, look like? Is it that she gets acquired within her vertical and she already knows who those three targets are? Is it that there’s this at play or that at play? And it may never eventuate that way, but having an understanding which helps with the goal in mind is really important. It also allows the investors to help you because they understand the trajectory that you’re on. The worst thing an investor wants to hear is, I want to pass this company on to my children’s children’s, children.

People in seed investing already have to wait three to five years for a liquid event. Please don’t make them wait their lifetime. So it’s kind of having that understanding as well and being able to adjust valuations.

And look for smart capital, look for strategic capital. Look for capital from a partner that could open up a market. Or look for capital from a branding partner that could be a possible acquirer in the future.

That doesn’t limit you now, though, with that caveat, doesn’t turn you into that R and D project. And look for strategic investors that can actually help you grow your business. We’ll often say no to founders because you guys actually don’t need us close to closing your round anyway.

You probably don’t need many of our fractional services. Yeah, we could jump on as a Ned, but you don’t really need us. There are others that need us more.

And sometimes I turn founders away because they actually don’t need the money. I met an amazing female founder a couple of weeks ago. She’s bootstrapped to date.

She’s developed an app for mums. It’s amazing. I don’t know if I’m allowed to talk about it, so I won’t mention it.

And she’s very close to profitability. And she was looking for a capital injection to help grow out tech and accelerate marketing. And she didn’t know about the grants and nondilutive capital options.

I said, I don’t know if you actually need us. You can actually get through to a bigger valve without us, and here’s what I would do. And then just connected it with a few people.

So we like to make sure we’re giving them advice as well. And sometimes that advice is, you actually don’t need this money or you don’t need that much money. So being open to taking that feedback, I think, is really good as well.

But, yeah, there’s some fantastic startups out there and it’s just, how can we help more of them and get more involved? And even as a community in the industry, we play in the sandplip well with others. So we share cap tables with a lot of successful seed firms in Sydney. And I think people think that we compete almost.

It’s not really the case. So my other advice to founders would be leverage, even if that firm’s not going to. Invest in.

You ask them who they think would, who else do they talk to, who are the contacts at the other firms? Can you give me an introduction? They’re more than likely willing to do that. I’ve never said no to something like that. And so, yeah, I think people think I’m going to talk to this firm than that firm, and not they think we’re competing, but we’re not.

We want the best and we want you guys to succeed, so of course we’re going to help where we can. Yeah, well, it’s just long term relationships, right? I think you give them that right advice at that point in time, you never know their growth trajectory and where you might have that a better time to invest in the future. Right? 100%.

And they always come back and they keep us in touch. Like, we’ve said no to some great tech just because we’ve already done our one a month or it wasn’t right for us, whatever it may be. And I love when people come back and go, hey, you won’t believe what happened after we met.

I’ve got capital from here and we grew to here and we also do a lot of connecting. So it’s funny, tech startups, I don’t know, because there are real problems to be solved, particularly in the domestic market. There’ll be waves where I see like four or five startups doing very similar, if not the same things in a very short period of time, particularly around elderly care, like the NDIS or some fintech, all that kind of stuff.

And often, you know, I’ll ask them both first. I’ll go, I basically met someone doing pretty much the same thing at pretty much the same stage, only you’ve got better tech and they’ve got better whatever. Do you guys want to connect? And that has happened a lot as well, where they end up kind of joining forces.

Fantastic. Either partnering or even coming together. And so, yeah, when you’re pitching, if you get a great investment firm who’s willing to spend some time with you, giving feedback and insight, use that valuable time you’ve got with them to ask all the questions.

I like it. You mentioned the importance of a really good why. In successful founders we work in recruitment.

I think it’s the same whether it’s a founder or an employee. If as an employee we’re placing people into a job they feel some form of alignment with, there’s some form of why there that’s a little bit tighter. When the motivators align, I think 90 plus percent of the time you end up for a better longer term fit.

Right? 100%. And I think in early stage tech in particular, I think you’re only going to hire someone if they believe in the why. Because it’s a grind, right? It’s a grind.

It’s not always lucrative, it’s hard work, it’s long hours, it’s ups and downs. And yeah, in a lot of cases there’s equity actually have an opinion on equity I’ll come back to as well. But yeah, it’s hard.

You’re not going to find like minded people to work in your business and when you’re that lean you need people that are going to work as hard as you and you’re not going to find them unless they really believe in what you’re doing. And you can articulate the why. And the why is purposeful and meaningful beyond just the dollars.

You mentioned equity. Let’s tackle that right now because I think back, especially when startups were glorified, right, there was this big thing you can go work for a startup, you’re going to take less money but you’re going to get equity. I think these days people have seen the actual likelihood of that equity coming to a liquid event for you as an employee, early stage employee, minimal, right? From the chances.

Although there are some people in Australia who’s been part of our biggest startups in Australia and success stories who are now very wealthy because of that, but the chances are quite minimal. I’m keen to get your opinion on the equity piece. Yeah, I think it depends on your career trajectory.

So if you look at my background I would consider myself a serial startup worker. So yes, roles were painful. Yes, they were hard work.

Yes, I worked around the clock. Yes, I’ve got little pockets of non liquid equity sitting everywhere, but I made that decision and I made it several times. So I’ve got little pots everywhere.

If you’re coming out of corporate and you’re stepping into a startup and then you go back to corporate and you’ve got this little bit of equity somewhere, it’s not going to feel as valuable to you. It’s almost like a hedge of bets. I know that some of the businesses I chose to work with are going to do really well and when they do do really well, I’ll get something back for that.

But I’m almost like a serial tech startup person and investor. So I kind of make sure that I diversify that portfolio as much as possible. I don’t go above my and beyond my limits.

I get as involved in the company as I can if not working for them. But I understand that they are sitting there like little Pots. Some will erupt and some will not and some will dissipate.

But I think it’s more about if you’re coming out of corporate and you’re looking at a life in startup, is it a long term thing for you? If it is, go for it. If it’s not, you need to think about that when you’re accepting packages. The other thing about equity is this is only a personal opinion of mine I’ve just started forming in the last twelve months because it comes up a lot with the startups that we inject money into and many of them, because they’re so early in the journey, haven’t thought about ring fencing ESOP yet.

So I say, well, look, you’ve grown to this point where you’re worth 5 million or $7 million. You’re about to go through a cap table update. Now would be a good time to put 10% to 15% of that capital aside at the current strike rate.

So then the future, you can hire some key people to deliver ESOP to or you can wait till the next round, but it just means they come in at a higher strike rate. It’s more attractive now, right? Yeah. So that’s one side of it.

The other side of it is when companies do that because of what the market we’ve just come from 50 x multipliers and everyone gets ESOP. You get ESOP. You get ESOP, receptionist gets ESOP.

I don’t think everyone should get ESOP. Yeah, agreed. So when I think back to my early days in tech, like, I’m 45 next month, when I think back to my early 20s, not everyone gets ESOP.

It’s not just tenure either. It’s high performing, it’s milestone based, it’s key roles, expansion roles or whatever. I haven’t seen this unfold yet.

Most companies are still doing ESOP for all, but ESOP doesn’t have to be for everybody. I agree. Yeah.

And it’s a really interesting market. I feel like founders feel like they won’t attract the right talent unless they give that little bit away. But if companies join you to work at a startup, it’s a cultural thing.

They want to be part of something purposeful. They’re really aligned in what you’re doing. They’re going to do it whether you give them three basis points of a toilet roll paper versus not.

Right. Yeah, correct. I think that has changed.

That movement is definitely changing. It was definitely the startups in lights and everyone wanted some ESOP. They’ve got some skin in the game.

Yeah, exactly. But I feel like that’s changed and I feel like the whole idea of startups being able to get away with paying significant unders in the market and offering some ESOP, that changed over the last two years. That all changed about two years ago.

All of a sudden, 100% startups were paying corporate rates for things. It’s definitely come down a lot since. And all that did, I think, if I think about it, was, and I was on this merrygor round as well, is that a lot of the people that were getting big bases in the startup world then were asked to hop off the train and are kind of looking around for roles.

But the really key roles that actually do like the engineers, the developers, the salespeople, the customer support, the ones delivering day in, day out, those amounts haven’t really changed very much and they’re pretty consistent with what you would get. Yeah. And you’re getting paid as much in a startup as you were in corporates in a lot of since this is the last two years, and then that drove the whole market crazy.

Yeah. Exactly right now. That’s cool.

Two other points in that. So the why part for you right now, your career has obviously gone on a journey. I’m keen to touch back at the beginning in a SEC.

But for you, you had multiple opportunities, obviously, over the last couple of years on where you want to go, where you actually want to devote your time. Why? What’s the why for you right now? Yeah. So I always, ever since my early days and before Ebay, there was Telco.

I sold mobile phones for Telstra and Vodafone. But my why when I got at Ebay is when I really discovered it. So what I loved about ebay, and this is important because it’s kind of made my decisions all the way through.

What I loved about it is it was a marketplace globally, where Mum and dad in their garage selling wrenches could compete, know, super cheap auto in the same marketplace. One meeting, I’d be sitting on a milk crate in someone’s garage having a cup of tea, and the next meeting I’d be in a boardroom presenting to sea level stakeholders about why Omnichannel Retail is the next frontier. That’s how long ago it was.

And this is back when there was no plugins and people were ring fencing stock in a warehouse. That’s the ebay stock. It’s four SKUs up, don’t touch know right through to now.

And so that democratizing of know, bringing a market to people and allowing them to basically create their own business, that was really important to me. And I loved that about ebay. And then when I went to Braintree, what I loved about it is that Braintree had helped build the payment experiences for Uber and Airbnb.

All these frictionless checkouts, we understand, and then allowing Australian businesses to have the same checkout experience and build that kind of thing really floated my boat. And then going into bank payments. Again, it was about accessibility at Go cardless.

How do we allow small to medium enterprise have access to bank to bank payments that are normally reserved for telcos and energy companies? This really safe form of debiting bank accounts? And how do we make it easy for them to use those tools and get paid on time? Like, how many small businesses are chasing payments and go under because the cash flow isn’t there? Like, how can we improve that? Then we did a global partnership with Xero and helped a lot of small businesses unlock their cash flow. So that was really important. So it’s always been about how do we use technology to basically democratize something and create equity for everybody? That’s really been my why.

And I love startups that are involved in creating opportunities like that. And then so to come to Scolari and have, at the moment, 26 in the portfolio, and I passionately believe in each one of them and what they’re delivering to the market, it’s pretty exciting. And then being able to give my I could have stepped into another growing, scaling global tech startup and gone in as another chief commercial officer and gone from this val to this val and build out sales motions and go to microplans.

And I’ve done that many times. But this allows me to actually give that insight and coaching to 26 companies and growing. We’re raising capital at the moment, actually.

And in our data room, we talk about the trajectory and what we’re on and how everyone’s grown and their revenue and what they’re doing. It’s a great story, but we’ll have 80 investments by 2025. The impact that I’ll be able to have and my team will be able to have on 80 versus one, that’s really what got me here.

Yeah. It’s that diversified as well. You mentioned it before with multiple companies you’ve been involved with, and it sounds very similar here and just within one role as well.

Yeah. And you’d be surprised, I think, when people are used to working in one particular vertical within the tech, they kind of think, oh, I’ve been in fintech or I’ve been in Agritech or whatever, I’m going to stick in my lane because I’ve learned so much. But those skills scaling tech is transferable.

And we’ve got some fascinating companies in our portfolio. One of them is this amazing female founder, Danielle from Zondi, and she’s created a spectorial device that attaches to a mobile phone. It’s got hundreds of use cases like organic apple, not organic apple, whatever.

But the initial use case, which is taking off, is farmers to be able to tell the quality of their wool so they could do their own genetic pooling to get a better rate. Brokers being able to deliver more sound results for what they were prepared to pay for wool. So you don’t know why your neighbor Bob got whatever cents and you got whatever dollars to kind of taking the ambiguity out of that love.

It the whole industry’s got behind it and it’s just that stuff just blows my mind. She’s such an amazing founder and we’ve got 26 of those. And we all have ideas on how to help Danielle and how to scale.

And we’re all in there working really hard. And the same things for me when I step into one of the fintechs that we’re supporting. There’s two amazing founders, neurudin and Hashim, based in Melbourne, who have a fintech that is the target market or the audience they support are immigrants and students, international students.

And it allows them to send money to some of the most difficult parts of the world to send money to. So like Kenya, Bangladesh, India, Thailand, like countries where it’s notoriously difficult, very slow, very expensive. They’ve built this fantastic, wonderful app and technology.

You can have money there in seconds in a really safe you know, these are really diverse companies. And I thought, oh, I can really help master Remit, but I don’t know if I can help anyone out of Fintech or whatever, but I’ve realized the skills are transferable and it’s a lot of fun. And if you believe in what they’re doing and they’re passionate like Danielle, you can’t help but fall in love and be as passionate and you end up helping them grow as much as you can.

I love it. Continuing down that wide route for a second there as well. You obviously got to a point in your career where you’ve had opportunities to work on a couple of different boards.

I know you’ve been involved and still involved with Dry July. There’s been women in payments in the past as well. Can you talk about how those opportunities have come about and how you try to fit them within your life? Yeah, that’s an interesting one.

So my early stage board roles came from my love of startups. So initially I would do that for free, just to help. And then I moved into the space of doing it for sweat equity.

So I’ll come in and be an advisor or on the board and help you scale and I’ll take equity for that. And then I started to invest alongside that. And then a couple of years ago I did my AICD course and I would say before I did it, I was like, seems to be what all the directors do and whatever, should I do it? Should I not? And I got some really good coaching from a dear friend who is also the chair of Dry July.

I wasn’t on the board at that point and he said to me, look, you should definitely do it because for a lot of the older boards and stuff, it just kind of makes them go, oh yeah, she’s kind of been through the course, she gets the governance aspect. Let’s go. I did it and it was honestly the most intense five days, I think, of adult education I have done.

Wow. I would highly recommend it. I wish I had done it sooner.

Even as a senior leader within businesses, I think understanding more about the way the board would view certain decisions, evaluate to make decisions, the type of data points they needed, those kinds of things, and the kind of broader kind of end to end thinking would have really helped me. I thoroughly enjoyed it. I learned a lot and made some great connections.

And then that same mentor, there was an opportunity coming up for the Dry July board. So I put myself forward for that and went through that process. Dry July is close to my heart.

I had cancer myself and a few years ago had hysterectomy and radiation. And I’ve been down that journey, down my own path. And not many people know this, which is what we’ve been trying to change this year.

I hope the message got through, but Dry July is actually all of the proceeds go to Beneficiaries that support cancer patients. Beautiful so it all goes to companies that are creating better experiences for patients going through cancer and their families. It could be as simple as the Wigs and just a day of reprieve.

It could be transport to an appointment, it could be a TV in a waiting room right through to nurses on call nurses in regional hospitals that Dry July support call centers for people. So yeah, it’s a fantastic cause and just year on year they have managed to maintain and grow. I think this year we did another 8 million in donations throughout the month of July.

And when we look at other charities, they’re banging as well. They’re punching above their weight. But no one seems to have the same level of impact as Dry July and being part of that board and being able to give back.

And I am the go to for the oh, this payment thing’s not working. Or you can just step in here or whatever. And I love that.

And we’re always looking for corp partners to boost the campaigns as well. So it’s been a great way for me to give back the other board roles that I do. Some are within the Scolaria community so when we make an investment we’ll place a non executive director on the board to help build out the board and governance and help the company grow.

If it’s our backgrounds personally, like a fintech for example, then that would be me. But if not one of us partners, we will find the best person in market to support the board and we’ll pay them and we’ll put them on your board. So yes, I’ve really enjoyed the board work and getting to know the businesses more intimately, but being able to do it at that kind of helicopter view, I still have to stop myself from rolling my sleeves off and getting too into it.

It’s definitely a learned muscle being able to give advice and then let them kind of go with it. But it’s something I absolutely enjoy and make time for. Beautiful.

We’ve talked a lot about startups and about founders. You’re involved with the startup scene right now but haven’t been that startup founder. But you mentioned earlier on today, I think it was one of the first things you mentioned Ink, was when you were at Ebay and the beauty of Ebay and PayPal were really big organizations which allowed you to move around and your career to grow and you gained different experiences.

You’ve taken your career, you’ve obviously become really successful and now you’ve got the opportunity to get involved with startups at that bottom level. Yes, I think startup founder is sometimes like glorified and you can be involved with a startup without having to be that founder. And being a founder isn’t for everyone keen to get your opinion on because I really love the idea of started a bigger company and just understand what you do and don’t like get multiple experiences.

And those experiences then create opportunities for you to understand what you’re good at, what you’re not good at, where you can play. Absolutely. If you get the opportunity to work in large companies, even smaller companies, where management or the founders understand your capability and give you the opportunity to explore other roles and grow other skill sets, definitely do it.

Particularly in the safety of one company. And I say that and people when I say that, people go, what do you mean by that? Because when you apply for a role, you typically apply for a role that you think you’re capable of doing versus one where you want to learn. But in the past I have almost deliberately tried to go for roles that I knew would be really challenging or I knew I had a lot to learn and just been very open and transparent about that in the interview process.

And you don’t have to go, I don’t know how to do that. But I say I’m really attracted to this role because that piece of it is something I have not done before. These things I have, and I know I can deliver value.

These areas are brand new to me, but I really want to get into it. It’s one of the reasons why I’m attracted to the role. Which is significantly easier to do if you’re already an employee there as well.

Right. If you got to run on the board in a particular area, people know that you’re great, stays in the business. Correct.

Get deflection muscles, doing in a safe, controlled environment where people are allowing you to make mistakes and learn and grow, I cannot recommend that highly enough is to step out of your comfort zone and jump across. You can always go back. You can always go back to what you did before.

But being able to get the opportunity to grow and spread those wings is really important. When I was at Ebay and PayPal and I’d moved out of Sales into Sales Management, into then Sales and Account Management into Sales and Channel partnerships, all very natural progressions and lots of engagement with other parts of teams. And then went over to Braintree and then took over what was marketing, account management, engineering, presales solution, all that kind of stuff.

I tried to make it a point of understanding what a day in the life looked like for everyone in those different teams. And even now, I still coach a lot of my old employees. And there’s nothing I had a conversation last week actually, there’s nothing worse than having a manager that not hasn’t done your job before, because that’s really common, but doesn’t take the time to understand what you’re trying to deliver and why it’s important in the bigger piece.

It is by nature something that we do as leaders where when it’s stressful, we’re under stressful times at the moment. One of the easiest things that we do as leaders is we naturally fall into the genre we came up in, right? So if I’m a country manager and I’m under pressure because the country is not performing well and I’ve got marketing over here and product dev over here and sales but I grew up in sales, I’ll naturally gravitate towards the sales side of the business and start to kind of roll my sleeves up and micromanage and get involved and even sell myself. Which we all have to do, right? I’m not knocking that’s what we all should be doing all the time, but what I’m not doing then is I’m not giving the other people in the business an opportunity to add value and I’m not learning about how those different other parts of the business and business units can actually drive commercial outcome and value.

Therefore, I’m not really a well rounded leader. I’m really a sales leader. Yeah, I like it’s good advice.

It’s good advice. You mentioned pressure just then on pressure and stress pressure. Oh, yeah.

Feel like there’s a bit of that going on at the moment, right? There’s a lot. And you and I chatted before the podcast, there’s been some personal stuff happening in my life and my family’s life and we all have those things going on at the same time. And there’s a lot to be said for be kind, because you never know what someone else is going through in their own personal life at that point.

And I think particularly over the last couple of years and since, COVID we’ve had a lot of that, and I would almost say eight out of my ten friends are going through something that is fairly significant at this time in their lives. And there’s a lot of financial pressure and a lot of job security insecurity and all these kinds of things. So there is a lot of pressure and it’s very hard to balance and I’ll be the first to say, and there’s times that I might lay on the fetal position on the lounge and drink a bottle of Shardy to myself, watch Handmaid’s Tale, have a bit of a cry and go to bed.

There’ll be nights like that, but there are other times that I manage it a little bit better, but nobody is great at it. That I know. It’s something you constantly have to be working on in the background, really conscious of, I say this like I do it, so I’m just going to say it, preach it, but please know that I’m no saint.

But exercise, when I am in a good rhythm with exercise, does play a big part of my mental health and how I handle things at work. Being able to compartmentalize and kind of prioritize well and take the manic kind of pressure feeling out of your day, working with a team where you can share and support each other during the downs. I had a really hard day last week as well, last week was a big week.

I had a really hard day last week, and the Scolare team sent me a massage voucher and made a cartoon of me as a leader with a flying, you know, working with great people who, oh, she’s under pressure at the moment. Just kind of wrap our arms around her today and vice versa. I think you spend so much time with people from work, right.

You spend so much time with that. It’s high stakes, right. Especially when you’re in a startup or a really small firm like Scolari, where we’re supporting so many businesses.

We’re all running at 150%, and it’s high stakes. Every day is a high stakes day. I agree.

Yeah. I look at it three balls. I look at health, work, and family.

If I try to juggle those three balls, I think I only ever do two or three well. And one tends to fall down. I think it’s a challenge like that, finding that challenge, not leaning into a bottle of Pinot more nights than nights.

Yeah, exactly. On that note, for founders as well, my personal opinion, I don’t think being a founder is for everyone. I don’t think you can have balance being a founder.

No. I think you’ve devoted your life to a life course for a period as a founder, for sure. And you’re going to have to make some pretty significant sacrifices.

Sacrifices. Really big sacrifices. And a couple of things on that.

Like, for one, I couldn’t be a founder. I don’t have it in me. I am the biggest advocate of founders.

I’m a great commercial leader. I’m an investor in founders, and my whole world really is how I help founders grow. But I couldn’t do it.

The other one is they are giving up so much, and not just financially to be in that business. And great founders are really intelligently, smart, innovative, creative, charismatic, all hat wearing people. They could literally have any job they want.

Yeah, there’s a lot of them that would earn more just taking a salary. Way more and less stress. Yeah.

Be able to turn the phone off at night and go to sleep. They do this because they’re really passionate about delivering something. They’ve got a vision for solving a problem and they want to do it.

And that’s why I find them so attractive. And that’s why that why Piece is so important. Right.

100%. But I think it’s underestimated how much they give up. And also, I think there’s a constant power dynamic in the industry.

Like, I think investment firms need to remember that without founders, there’s no industry. So take the time, be kind, give good advice. Even if you’re not going to invest, give them some feedback that could change their trajectory.

Open a door, make an introduction. No founders, no ecosystem, no need to be an asshole. Just be a good human.

And so that power dynamic is still off because they’re the ones with. The money. But these guys have got all the ideas.

And without good founders with good ideas and good exit strategies, there’s no liquidity in the market and none of you exist. Like, the end. That’s my little rant.

But, yeah, founders, they do give up so much, it becomes their whole life. And a lot of their employees do the same thing as well. And if they really believe in the vision and they really believe in what’s being delivered, their partners give it.

Their families give it. Like every cup table I look at as an early stage investor has a mum or dad or uncle or auntie on it. Every single cup table.

These are really purposeful businesses and their mental health is really important and I think we need to make at Scolare, we meet weekly and talk about the business, and then we meet once a month and we have a deep dive half day where we go into each business very deeply with the Ned. And one of the things we often talk about is the mental health of the founder and the team. And we will call out if we think someone’s struggling and we’ll bounce ideas like, how can we help? Can we do this, can we do that? It’s a really big part of it.

The company or the startup will and go as far as the founder. No founder, no business. Actually on no founder, no business.

I also come across startups where the founder’s been bootstrapped and working at it for like two years, twelve months, and haven’t taken a wage. And I ask them to go away and come back with a capital ask that includes a fair wage for them. No founder, no business.

And another thing that we really believe in at Scolario, so we’re raising at the moment, and we’re going to use a portion of that money to set up a follow on fund to double down on the investments that are getting big that we know have got amazing futures ahead of them. But one thing we often talk about is how can we also support secondaries for some of these founders? So if you think if you’ve been in business for three years, bootstrapped, your family’s given everything up, you’ve been earning low to average wages while you build, what is your life’s work? People look down on secondaries. I’m like, why can’t that founder take Commander K off the table in a $5 million raise? Why? Absolutely can’t.

They like, they’ve worked their ass off. People think they’re going to take that money and jet set away. That’s not it.

That’s not it. Let them get the house deposit, let them pay off their car, let them go on that holiday, let them do these things. Otherwise, financial stress, that’s just another stress.

No founder, no startup. It’s that whole thing we do for every other part of our lives with Mum, put on your own oxygen. Mum, put on your own oxygen mask first, all that kind of stuff.

Founders are no different. Yeah, I love it. Yeah, we’ll wrap up in a SEC.

We just mentioned a part earlier today around the course you went back on, the AICD course. You found that really educational, really beneficial. Was there any other education you’ve seen either with founders that you’ve worked with or other employees you’ve worked with? Ebay braintree PayPal.

Any other education you’ve been like, hey, I’ve seen other people doing this or I’ve done this, and I think something I’d highly recommend for people. That’s a very good point. I just think education is changing so frequently.

I do see the value in university, but maybe not in its entirety. Yeah, so there’s two things on that. There’s a lot of niche organizations out there that are absolute experts in what they do.

Like, if you think back 1015 years ago, all you could really get your hands on is maybe sales kind of coaching, right? Sales team coaching. There are now other parts to that. And there’s a company I’m on the board for called Payed, the Newcastle Founder, actually, and they do education, payment education for organizations and enterprise to help them understand the value of payments, the governance around it, particularly with all the APRA changes coming, those kinds of things.

But they take that money and then they use a lot of it to actually educate people who need financial literacy, education, like things, third world type stuff. Amazing organization, check them out. So there’s niche, things like that.

But the other thing is, Scolari also own the Australian Technologies Competition, which is a 13 year old Australian tech comp, lots of government funding, really strong kind of climate and clean tech aspect to it, about 14 verticals across. It really popular competition. And actually the awards night is this Thursday.

It started in May. And the reason why it’s so attractive to so many Australian startups is that when you enter, if you become a semifinalist, you get a mentor, and then you get access to a bunch of master classes, including this two. Day, Masterclass, that we ran, that we’re now going to do again for our founders and for more broadly across the market because it was so valuable.

So it was two days they all came together, so they got to know each other and share stories and insights. We had someone come and talk about patent lawyer, like patent lawyer come and talk about IP. We had someone talk about global expansion.

We had someone come and talk about presentation skills and pitching. We had someone come and talk about grant writing. We had all these things that were specific to founders.

And the feedback we got from that day was just amazing. And I realized that there’s no one out there. You’ve got your boot camps where it’s kind of stretched over three months and you get like a team of people working with you, like a sprint, we do Sprints.

We do all that. I think they’re really valuable for opening doors and honing in your product Led market stuff. But this was more like, okay, I’m a founder, I’ve been on the grind now for two years.

I’m putting my head up, what do I need to learn about? And it’s like, hey, you’re not on your own. Here’s the best practice. Way to do this, here’s the way to do that.

Here’s what the US looks like, here’s this. So we’re pulling something together for early next year for our founders and maybe thinking about broadening that a little bit. But there’s a lot that you can still get out there and learn around the aspects of being a founder and what it takes to scale and grow a business without having to give up equity to do it.

And you would find that there are a lot of firms that run different founder nights and information nights. They’re probably open to you even if they haven’t invested in you. If a bunch of founders reached out to me and said, hey, I heard you’re having our next founder call is on the 18 October and we’re getting people to come in and talk about partnerships.

And if people contact us and said, hey, can I chuck in a bit to be at that event? I’d be you know, it’s about that ecosystem. So I think putting that out is definitely one way, but I’m a big believer there’s actually a not. I know your podcast is the best podcast, but there’s a podcast that I love in the US called the all in Podcast.

Have you ever listened to it? Yeah. Who runs that? Is that jason? Yeah, he’s one of like I’ll disclaimer it with this. The first time you listen to it, you’d be like, that’s a bit us and a bit wankery because these guys were the second employees of like, you know, all those guys elon Musk, Twitter, and they’re very well connected and they talk a lot about poker and their money, private jets and whatever.

But 80% of the podcast is about the economic environment, what’s happening with seed stage funding and startups, what’s happening in the tech world, and they’re really fascinating. And I learned so much from that. I learned so much from listening to those different podcasts and just hearing about other people’s journeys.

And I think there’s different ways and different forms of learning. Yeah, I love that as well. And learning is so freely accessible these days as well.

I think there is a space for universities in learning how to learn as well, 100%. But I think for niche content, there’s so much that’s free and available these days that there’s sort of no excuse, right? Exactly. If you do a little bit of research, you’ll be able to and you need some help on BD of sales for whatever you can source some of the best people in the world in that BD and sales space and find some of their content for free.

Yeah. And even if you just pick up one thing that changes from the core, like sales is a good example, right? You’re achieving X amount of output against a revenue dollar. All it takes is one or two minor changes to tweak that a few percentage points and you’re off and running.

All you need is one or two tips in those environments that can change things. Like one of the fractional services that we offer our founders is a commercial team. We have an expert come in who can do everything from what does your sales motion and collateral look like right through to your target market and what activity you should be doing each day to hit that target and then manage them through it.

And when you find that everyone’s selling it, they’re doing it. Founders know how to sell their own product, right? They believe in it, they’re passionate, but it’s just those little kind of framework and foundational pieces that can just accelerate a business so much. And yeah, if you listen to a few podcasts and you pick up one or two things that you implement, it’s all about testing and learning, right? Yeah, I agree.

I appreciate it. If people keen to know a little bit more about you, potentially reach out, get in contact. The easiest, best way to get in, contact me on LinkedIn.

Super approachable. Go for it. Scolarapartners.com

is our website. We’ll link them both up in our show notes. Thank you.

And the tech. Comps, a good one to follow too. Oztechcompetition.com

Au. Beautiful. Thank you very much for your time today.

Thank you. Thanks for having me.

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