Daniel Faloppa on Bee Formless: The Future of Startup Valuation — Risk & Return, Not Hype

Belinda Murray (0:22)
No, thank you. It actually actually does work because you are the founder and CEO of Equidam. So, you know, that actually works. That’s what I’ve just called out before. But Daniel, I am super excited to be talking to you because you have some very new news to share with us. But I want to take I want to introduce you and take you right back to when you were 12 years old. And I’m going to start with you’re the founder and CEO of Equidam, as I just mentioned, which is a global startup valuation platform. And it’s used by over 160,000 founders across 90 plus countries. and it’s to bring transparency, structure, and data backed clarity to fundraising. You’re an entrepre entrepreneur and programmer who began coding at 12 in the Italian. Wow. And you have spent more than a decade operating at the intersection of technology, finance, and venture strategy. In 2012, it’s when you founded Equidam and it was a simple belief. Startup valuation should be valued, not priced. I absolutely love that. Grounded in a method, not mystery. And through Equidam, Daniel, you and your team has helped reshape how founders and investors think about valuation. So it’s moving it from opaque negotiation to structural analysis. I think you’ll need to explain a bit of that to the audience for for us, please. And you’ve also me mentored hundreds of startups across 40 plus global accelerator programs including the likes of Virgin startups, Micros Microsoft startups and startup wise guys. And most recently, very very recently, I think it was midFeb, but you’ll be able to share, you can give us all the information on that or the I guess the download. Equinam announced its merger with Share Council, which is Europe’s leading co-ownership platform to build integrated infrastructure for valuation, cap table management and equity administration across borders. With the European Parliament advancing standardized ESOP frameworks, EU included, Daniel’s focus is clear. Make employee ownership dependable, compliant, and accessible. And you have this huge mission which is to enable 1 million co-owners to do this by 2030. Your philosophy is long horizon, systems driven. Great companies are built through clarity, perseverance, and aligned incentives. incentives, I should say, not hype cycles. That is one of the longest bios I’ve read, but we had a lot.

Daniel Faloppa (2:46)
Well, it’s very detailed. Yeah.

Belinda Murray (2:48)
Yes. I’m gonna hand it over to you, Daniel, to tell us. Let’s take Let’s go right back to when you were 12 and how you started this.

Daniel Faloppa (2:56)
Yeah, it’s it’s it’s a crazy it’s a crazy journey, right? Because well, I I come from a very tiny village in the Italian Alps. It’s about 500 people and like probably more cows than than that. And it’s a touristic place, but it doesn’t really have much going for it. And especially in the winter, there wasn’t much to do, right? And so like really this I always had this pool for computers and and informatics in general. Yeah. I think like I was I was speaking with somebody the other day. I don’t remember who was the exact person but there was a kid somewhere and he showed me like Visual Basic at the time and he was talking about you know making little programs from Excel cuz in Excel you could use macros to make programs and stuff and so like you know through that like kind of started coding and really got this attraction for the fact that you can build for free things that are standing on their own and they’re helping other people and they are doing things for you and for others and and I think it had this very much this egalitarian pitch to it, right? Anybody could do it. You just had to to learn, right? And so that really took me uh down a a very deep rabbit hole of of of computer and coding and and everything. And at some point I was I ended up studying the the TCP IP protocol and and like it has nine layers and it was like a book of like 1,200 pages. And then I said, “Okay, if I if I continue down this route, I’ll never gonna leave my room and I’m gonna like lock myself up in a in a dark place and never speak to anybody again.” And so I thought, “Okay, I I cannot do that long term.” Like, it’s not very very healthy. But the passion for it was was extremely strong. and and but then I said okay let’s let’s sort of fall back on the second passion that I had at the time which was finance which almost goes in the same direction of like helping people without resources but with ideas and with knowledge and so on getting those resources right like that’s kind of like the best pitch for finance I know it’s not always seen like that right but but I think in the best way it has potential to equalize things for for everybody right and so then yeah I ended up going into finance with direction towards investment banking and and graduating and so on. But then I didn’t like that direction in terms of like what the job would actually be and in a sense I ended up thinking to go back to computers and like the intersection between computers and finance and coding and finance and and ended up starting Equidam in 2012. Um, we started as a blog really like trying to to help entrepreneurs figure out finance because a lot of entrepreneurs they come from all sorts of backgrounds as you know but but rarely they come from from finance because they need to have domain expertise right

Daniel Faloppa (5:38)
and because that of them not coming from finance there is such a opportunity to to teach them something and for them to make a big change and um and so yeah and so we started with the with this blog and then the question kept on coming how do we calculate valuation for our company. We need to raise capital. We need to sell the company and so on. And so, you know, with the with the background in in computer science, I was like, okay, we can do something about it. It’s not rocket science. We can help a ton point people in the right direction. And this was 2012 in Europe, right? So,

Daniel Faloppa (6:10)
yeah,

Daniel Faloppa (6:11)
angel investing was very much not established. Uh, VC investing as well, right? Valuation methodologies not really evaluation data, startup data was not there. So it was a lot of fun. It was a, you know, and at the beginning it was really controversial like we we got a lot of feedback of like what you’re trying to do is impossible. That was the first sort of thing, right? Then the second thing was like even if you manage to do it is not useful because valuation is an art and everybody, you know, everybody wanted to keep their their cards very much close to their chest and and not share how they would calculate things for for fear of losing leverage in in negotiations, right? And but then we got connected with and this is a long story, right? But we got connected to the equity crowdfunding industry which actually started in Australia

Daniel Faloppa (6:58)
back then and I spoke to him the other day. Paul Nether was the the CEO at the time of ASUB the the small business board of Australia which was kind of like the first private company stock exchange in the world let’s say which kind of started a bit the the equity crowdfunding.

Belinda Murray (7:14)
Fascinating.

Daniel Faloppa (7:15)
Yeah. which actually started then here in the Netherlands and and then it expanded to to the UK, a little bit in the US. It never really took off, but we got pretty quickly as Equidam to help about more than half of the equity crowdfunding platforms in the world and that was kind of like how we got started. But then that industry never really went very far. And so we we branched out into traditional funding rounds, traditional, you know, let’s say offline funding rounds in a sense. And and that’s what we’re still doing now together with exits, together with investor portfolios, consultants and so on. And now as you as you correctly said like the the last sort of step in this long saga is the merger with Share Council where we really see a clear synergy between cap table and valuation where people that do have their their shares on a cap table they’re always wondering how much they’re worth. If you want to do employee stock option plans you need to calculate valuation regularly like yeah big synergy there and and it’s very exciting to see where we can um take that. Was that always your dream? Like as like like back in 2012, if you look back now and, you know, kind of sit here and, you know, smell the roses, so to speak.

Daniel Faloppa (8:27)
I mean, we we always started with the idea of being successful. We did not really know what that meant, right? We knew very very little and and like it’s kind of like the reverse of what I was saying. We did have a background in finance, but we didn’t know anything about anything else, right? So like marketing, yeah, strategy, hiring, like HR, legal, like we didn’t know any of that stuff, right? And and so we we had to figure all the other pieces out. But uh but yeah, the dream was to to empower valuation for all private companies worldwide as not only for transactions but also just for internal information and reflection of of uh you know valuation has this really unique quality that it puts together the future potential of the company but also the future risk right and so you could theoretically compare strategies in the best way possible because you’re not only taking into account how big something is going to be but also what’s the probability gets there. And so the dream has always been to uh yeah to to serve the the global startup community with uh with valuation. Yeah,

Belinda Murray (9:30)
I love it. And I love that you talk about the the double-edged sword like you know what’s what’s absolutely possible but also the risks associated and because you always talk about scaling but then there’s almost like the risks associated and at times you have to descale and you almost have to go backwards to go forwards again and I think that we don’t talk about that enough you know in in startup in the startup ecosystem the founders and you know it’s always around like these big pipe dreams if you like and what’s poss posible but you know from a valuation perspective or sense and the reality of here’s this and here’s that so that strategically how do you manage that in a really uncertain and rapidly changing world as well like yeah

Daniel Faloppa (10:17)
yeah yeah and there is also there is also some counterintuitive cases that people don’t think about like for example sometimes doing something smaller or less ambitious might be riskier right because because the better strategy would be to to be more ambitious and and you would get better talent and you would get more funding and and you would be like you actually have a higher probability of success that way rather than the other way around or we just uh did an article yesterday on the valuation of hit businesses, right? So if you think about music businesses, the gaming industry, movies, right? you can have a game um that is extremely successful and goes extremely big and generates incredible amounts of of cash flow um and the company is going to be worth a lot and it’s like 10 programmers right um but when you start out you cannot project that if you project that then your valuation is going to be extremely high and that’s very difficult then to sustain it’s difficult to claim that you’re going to make a 0.1% % game, right? So in that case, if you think about okay, what kind of game can you on average produce, then that becomes a much more interesting valuation. So, so yeah, this view of like not only what’s the potential of something, but like what’s the risk, what’s the probability that it happens, it’s why valuation is very interesting for me. Yeah.

Belinda Murray (11:38)
Yeah. And do you do you think valuation is like it’s obviously been around for quite some time, but do you do you feel like it’s more important than ever? Like do you think it’s something that we’re going to Yeah. like in terms of I don’t know really what I’m asking here but you know it feels like yeah

Daniel Faloppa (11:54)
it’s it’s interesting like so you have

Daniel Faloppa (11:57)
the the methodologies evaluation like it sounds like very scientific right because everybody every advisor and every professor but is like writing a lot about but it’s a fairly new science right and and it’s a fairly new uh way of of looking at things and a lot of the methodologies a lot of the coefficients are are fairly new and right now What happened is things got pretty clear during the SAS era, right? So the SAS economics were starting to be understood. The way to scale a SAS, everything was becoming more predictable, the way to invest in a SAS and so on. And so also the valuations and now we got completely slammed by AI mega rounds companies like being able to raise in other industries like energy and biotech and pharma and so on. And that has completely changed the the game, right? And so a lot of investors, a lot of companies that were maybe versed in understanding economics and val of these type of SAS companies which were fairly predictable without knowing the fundamentals of of valuation. Now they are like scrambling because they don’t understand the new type of companies, right? And so I do think like if you understand like a few core principles it helps a lot in in figuring out what matters for funding for strategy and for for evaluation. Yeah.

Belinda Murray (13:18)
And what do you say is the the core principles the few core principles and Daniel especially like in terms of the revolution we’re currently in then?

Daniel Faloppa (13:26)
So the the the core the core understanding is that what we were talking about before that valuation is a combination of risk and return.

Daniel Faloppa (13:34)
Yes. Okay. Yeah. M yeah and so like when when people go and try to estimate their valuation and when they try to go and negotiate it then the feedback that they get needs to be seen under those lights right and you see a lot of rejection online on like for example you don’t have enough traction right so that’s a that’s a risk feedback right so maybe and and it could be that the company has not enough traction but it could also be that you haven’t communicated the proposition well enough to make people understand what’s the actual level of risk of the company right so it’s it’s it’s difficult ble to communicate the actual risk of the company because you’re inside the company and you know everything but when you go and present people don’t know everything about it. So like interpret that feedback around risk and return feedback like the market is not big enough the like that’s more around return right and that’s a lot easier to change especially when you’re early stage like to change your proposition according to uh to that feedback and you don’t have to that’s not the best way like you you shouldn’t change everything you do based on like the feedback from investors right

Daniel Faloppa (14:39)
yeah but you need to adjust your strategy based on the the feedback of the market and the resources that you need for for that strategy, right? In order to make it really work. And so when you talk to like three, four, five investors and they have similar feedback when seen from the lens of risk and return, then you can adjust your your story, which in a sense is your product that you’re trying to sell to these VCs and include that feedback and then go and talk to investors that you really aim for, that you really care about, and you have a much stronger proposition for them.

Belinda Murray (15:09)
Yeah.

Belinda Murray (15:10)
Yeah. Tell us a little bit about what you’re seeing with the founders in terms of just in this space and and obviously these core principles like is there is there a huge education or re-education you like given that we’re in you know we’re we’re almost in between two worlds or we’re in a new world but there’s a lot we’ve still shaking off from the old world if you like. Yeah.

Daniel Faloppa (15:34)
Yeah. For sure. So there is a there is a we we we used to laugh with um with Dan Gray uh when we were when we were doing podcasts together on on like how um little is known about financial principles uh from the point of view of founders but also from the point of view of investors which is actually their job right and so like some some basic principles like diversification or yeah this like sort of risk and return dynamic or um are are really not well understood and now when when you go into completely new dynamics completely new sectors yeah I I think you know in the end the difficult thing of venture capital is that you see results after five to 10 years right and you have so little data to understand whether you’re doing well or not plus you could just be extremely lucky right but but if we don’t want to rely on on luck and hype then I do think knowing at least some basics would go a very very long way for founders. Now when you see OpenAI raising 110 billion as a as a private company setting new records when the amounts get bigger investors get more professional right and so uh you can of course you can hire for finance you can hire strong CFO and and and so on um but the more you know as a as a founder about finance yourself the more you’re going to be able to hire a better CFO uh or to have those conversations yourself right and in the end you’re going to be the one that has to pitch and you’re going to be the one that has to make certain decisions and so like knowing a little bit about finance helps founders evolved a lot right over in in the past uh like let’s say 15 years that I’ve been doing this but I feel a lot of the knowledge that they have now is superficial right so they read like some maybe like they read about a comparable method right and so they go like oh I should compare myself with other companies and then they go and look up other companies but they don’t understand why right why is that why should you you know and and what should you look at in those comparable companies to make sure that they are comparable. hint is about risk and return again but so so yeah so I think there is a lot of edge to be gained in in knowing a bit more about finance especially when you go after those big rounds and those big things the other thing that is critical is to also understand what if you don’t so there are several strategies like there isn’t only open AI is not the only strategy right this this mega rounds and this

Daniel Faloppa (18:04)
rocket ship growth is not is not the only strategy and it might not work for every for every business right And the trade-off there is the more you raise, the more you raise expectations about the company, right? Because again, valuation is about risk and return. So if you raise a lot for a small percentage at a high valuation, it means that you are implying a lot of return with with low risk, right?

Belinda Murray (18:28)
You got you got to hit those numbers.

Daniel Faloppa (18:31)
Exactly. Yeah. Yeah.

Daniel Faloppa (18:32)
Yeah. And so you’re giving yourself much less margin of error and you are lowering the probability of of hitting them because they are naturally higher and which might be fine for you, right? You you might be like, you know, all all eggs in one basket type of guy with like no family or or girl like you know with with no obligations and so on. But it might also not be the right thing for you and it might also not be the right thing for your business, right? If there are still some fundamental questions that need to be answered in the business and you raise a mega round and and you have a a VC that is pushing for growth, you’re not going to have time to figure those questions out. Then you’re going to push the accelerator in a direction that maybe is not the final one and you know one degree off and you’re going to be um yeah not surviving, right?

Belinda Murray (19:17)
No, I agree. I really I really like where you’re taking this conversation in terms of you know like you know it’s almost like at all at all costs is basically what you’re talking about here and in terms of you know from a business perspective but also from a personal perspective because you know the higher the valuation and sometimes the risk is also then like you say like you can be working up to 80 to 100 hours a week because you are you are having to work 24/7 to hit and I and I and I least call it hit the numbers because you know it was it’s always you know like when you’ve got investors involved you know it isn’t that you have to show the return you have to show that the business is performing because as soon as it’s not or you’re not on target

Belinda Murray (20:04)
it’s like what’s going on you know you know and so I so for me I’d be really interested to understand you know you talked around my ears pricricked up when you talked around this new science in terms of new science when it comes to valuation I also think there’s, you know, a new a new style of leadership or a new style of founder that needs to be able to sustainably grow and thrive themselves without burning themselves out, without cooking themselves. Because if the founders’s cooked or if the founders completely, you know, exhausted, they’re no good to the business. They’re never going to never going to hit the hit the targets. And so there’s it’s kind of like a a recipe for disaster if you like. So how do we how do you reshape that? How do you do that differently for the mega

Daniel Faloppa (20:53)
like the high effort is important but

Belinda Murray (20:58)
agree

Daniel Faloppa (20:58)
it it needs to be it needs to be I think it needs to be classified according to how much creativity and challenge is required. Right? if if a ton of creativity is you’re not going to be creative after like 12 hours of work, right? That’s just impossible. So, um and and like if you see even even open AI, right, in terms of like it’s lab, it was a lab for a very long time, right? And and and like that’s what created this creativity and and also they failed a lot, right? They they created a lot of things that didn’t go anywhere. It took them 10 years to make the first um chip or or something like that, right? So you need to understand for your specific business um what’s optimal and again and this is like the same story it might be that raising a lot of capital pushing on the gas like crazy is not actually reducing your risk but it’s increasing it right and so in that case why why are you doing it right and and then yeah on the on the personal side as well I think there is a lot of startup culture around indeed like pushing the limits raising the capital being pushed from side to go even further. But there’s also a lot of success in companies not doing that, right? And in companies doing

Daniel Faloppa (22:11)
what I think is wrongly named traditional entrepreneurship. The whole thing is entrepreneurship, right? It’s just different strategies. But like these type of companies that are maybe growing more patiently, they are more yeah they have more room for for error. Sometimes what what happens is when you raise venture capital it comes also with like liquidity preferences and all those causes right so it skews the the return for the founders if if you want we can talk about that but I think I think your audience knows what a liquidity preference is right so um when when that return is so skewed right it means that you’re gearing your returns as a founder even further into like this risky territory right it’s it’s all or nothing at all costs And if you look at the probability distribution of like say making your internal goal right whether your internal goal is like to leave off forever of the exit or to have enough cash flow every year to again to not have to work like that’s you know reasonable goal for for a lot of people. Um it might be that that’s much more achievable without venture capital without liquidation preferences without even an exit. Right? If you manage to make a sustainable healthy business that every year generates a profit, it doesn’t need to be to be huge. Um, it can already achieve that goal with a much higher probability compared to go through the startup route, raise VC, push on the gas like crazy, burn yourself out and then, you know, hope in that in that exit to Google. This is another thing that, you know, founders should consider and and and that finance can help consider. Yeah.

Belinda Murray (23:48)
I’m interested. It’s so it’s so true what you just said. You just mentioned traditional entrepreneur and and so just so just like in terms of traditional entrepreneur, I have not heard that term before. Gosh, you know, call me like ignorant, but like is that is that in terms of what you mean in terms of slow and steady wins the race like not or traditional being bootstrapped? What do you mean? like

Daniel Faloppa (24:11)
I think I think there is a there is um um like a gatekeeping phenomenon of the startup community right so the first thing is that you call these companies startups so the original startup term like you know like a new company like a like a young company uh like that’s super fine right but then it got morphed into startups are like this digital Silicon Valley winner takes all digital companies right and and so that got put in in just a position with traditional entrepreneurship, companies that don’t call themselves startups, maybe companies that like open a factory and they make tables um or or you know hotel chains or gas station chains, right? And strategies around for example uh growing through acquisitions or other things that are not like traditional startup strategies, right? and and then what you see is that VCs and and early stage investors and angel investors that whole world has been created around startups right it’s it’s kind of like and it becomes more and more separated and then on the other side you have yeah what I call like traditional entrepreneurship but again it shouldn’t be distinct and sometimes the opportunities there are are much much bigger right there are like especially these days right it’s it’s incredibly hard to find a plumber and it’s much much easier to code your own app right? Which is the reverse compared to four, five years ago or well maybe seven eight years ago. Right? So

Daniel Faloppa (25:40)
so another thing is this this idea this sort of getting immersed into the the startup culture might blind some founders and some entrepreneurs from like all this other word that is out there of

Belinda Murray (25:54)
opportunity

Daniel Faloppa (25:54)
of opportunity. Yeah. Yeah.

Belinda Murray (25:57)
Fascinating.

Daniel Faloppa (25:58)
Yeah. It’s it’s probably um cuz you told me like your your background is more like on on marketing and on that side and I think maybe that’s like sort of less divided right maybe maybe like you don’t feel the divide in that way but I think you know there is a clear at least in in sort of investment VC land and stuff there there are this clear like boxes of like okay you fit into this box you don’t fit into this box and it’s in in my opinion incredibly damaging for for for everything

Belinda Murray (26:25)
and so do you think then that’s where there is a huge opportunity for the VC ecosystem if you like to you know you’re a shaper you’re a shape I calling it shape shifting you’re you reshape things you shape you reshape

Daniel Faloppa (26:40)
like it is kind of like you’re saying compartmentalized at the moment

Daniel Faloppa (26:46)
for sure and that’s why that’s why they’ve been going through a lot of pain right so so what happened in the past couple of years is that in 2022 like the the good VCs that the ones that managed to raise because it wasn’t a great year but they raised to invest invest in more SAS startups and and so on, right? And and so that’s in their mandate and those are the economics that they planned for and then the whole sort of AI wave took over and and made creating these SAS companies much cheaper, much easier, competing with them much cheaper and much easier and at the same time it raised acquisition costs. As you probably know, marketing channels now are incredibly saturated and it’s very hard to get to the final customer, right? So the whole economics of these such companies changed completely and these investors they had the mandate to invest in these companies for the next five years right five and so at that point they really had to break out of those constraints and and and those thought processes and and you know those those modes that they dig themselves in and um and change right and so like that’s still happening and the whole environment still have hasn’t figured out what’s the next SAS I don’t think Right. So what’s the next wave of technology or wave of entrepreneurship that can shape the the returns? Of course the whole AI thing is is interesting but nobody has yet figured out where’s the value of AI, right? So the the big companies of course making foundational models but they are requiring billions of investments and on the other hand like a lot of these almost AI rappers little AI created apps are incredibly competitive. So like yeah it’s still it’s still difficult to to find value there where there is value and where things are slowly turning is towards traditional again type of modes which is why it’s very useful to look at entrepreneurship right things like brand things like data hardware research patents and so on become much more useful because they are uh they are modes that a traditional software company doesn’t have. Well, yeah, and it’s for me it’s like storytelling. It’s like this new knowledge economy, right? Like it’s like obviously you’ve got your LLMs, you’ve got your AI, but from a human perspective, this is where I think there’s a real we’re going to see a lot of Yeah, I I think there’s a lot of opportunity and we’re going to see some very new styles and types of entrepreneurs, founders, businesses that you know from a creator of economy, all of that coming into their own. you know, you you talked around hit businesses, you know, it for so long SAS has, like you say, has been like the front runner. It feels like we’re about to see a bit of a whether it’s a role reversal, but but you know, like I even look at from a marketing and advertising lens as well. I see a whole new model.

Daniel Faloppa (29:33)
Yeah.

Belinda Murray (29:33)
Uh and it’s

Daniel Faloppa (29:36)
traditional evolving, if that makes sense. Like it’s not it’s not dying, it’s evolving. Yeah,

Daniel Faloppa (29:42)
because the power is so much more with the distribution now, right? So for for a long time the power has been with the production, right? You could have all the distribution but you didn’t have like software to serve your clients because it was hard to build it. But now it’s extremely easy to build it. And so like if you do have the distribution power, then you can do almost whatever you want, right? That’s why influencers like you know they they can almost do whatever they want. Some some of them make shoes and some others make makeup. It almost doesn’t matter. they have the audience and they you know they they can access it easily and so they can sell something to that to that audience. So yeah so that’s a massive shift that’s a massive shift in in um economics of of entrepreneurship.

Belinda Murray (30:23)
Tell us quickly a little bit about the merger Equidam. What was that like for you in terms of you know obviously was it a long time coming? Did was it something that you know was it

Belinda Murray (30:33)
was it a surprise like Yeah.

Daniel Faloppa (30:36)
Yeah. Yeah. No, so it it was very connected with this uh with this theory, right? So because of this shift in economics, companies that are doing say a slice a slice of the customer need, it becomes much harder for them to be able to handle the economics of accessing that customer, right? The customer acquisition costs. So for us, it was clear that our customer acquisition costs were were rising, but then our value to the customer was fairly stable. And so we had to add something for the same customer, right? So it was clear for us that we had to do something radical to try to provide more value to the same customer. The connection with with cap table companies has always been there for us. We’ve we worked with you know tens of them over yeah in the whole world and we still do and we still will support them for the future always. But it’s clear that we need to try to provide more value to the end customer in order to remain competitive. And so last year, I think it was around February, we started actually proactively to look around for uh for a strategic deal that could help us in this uh different uh environment. And you know, we talked with hundreds of companies and and you know the process, right? You you work extremely hard. You have a hard time maintaining focus on the core business and the

Daniel Faloppa (31:55)
Yeah. strategic uh side and you know you narrow it down you have conversations you have a hundred planets that need to align right timing willness of people compatibility of teams technologies

Daniel Faloppa (32:08)
that’s the same

Daniel Faloppa (32:10)
so there’s like so many things that need to align and and in the end like you narrow it down to a few companies and you and you pick one and for us the merger with Share Council was a very good fit also in terms of branding and culture we joined on

Belinda Murray (32:23)
asking coach Yeah. Ultra chemistry. It’s just so important. Like

Belinda Murray (32:29)
Yeah.

Daniel Faloppa (32:29)
Yeah. Yeah. You’re choosing like you’re choosing your next partner basically, right? For for a very long time. Yeah. And and so there was a we we’ve been knowing each other for a long time. And we’ve always clicked on on on branding and on like trying to do something more than than just uh you know try to expand the company and and the idea of like trying to make more people co-owners of the businesses that they that they participate in that they add value to

Daniel Faloppa (32:57)
for me is huge and it’s one of the massive problems of Europe that is preventing Europe from being competitive on the global stage is that employees don’t participate in the value they create. And so what happens is there is a complete lack of scale up talent in Europe. So people that have gone through that phase and can help other companies scale. The reason is that if they were part of one of these super successful companies, they never got equity into them. And so their salary grew, the company grew, their position grew, but then they almost got this golden handcuffs. They cannot leave that company. they definitely cannot leave that company for a small company that cannot afford their their huge salary and bonuses and so on, right? So, so then in the end they end up being locked into this and and they still need to work really hard and so on. So, they don’t have time, they don’t have money to be able to transfer that expertise to earlier companies. And so what you see in Europe is that everyone that has been very successful is either locked into one of these large companies is in consulting or or anybody or any other company that can pay them a lot or is a founder again, right? And is like helping doing their own thing. Yeah. And and so there is an incredible lack of scale up talent which I think is the main problem. It’s a bigger problem than capital in creating large companies in Europe.

Belinda Murray (34:16)
I need to get over to Europe. I need to I love like the scale up is is is so one of my favorite things because it changes so quickly, but you’re constantly shaping and shifting and shaping it and reshaping it, you know, like go from five people to 10 people.

Belinda Murray (34:31)
You lose a client. You’ve like, oh, here we go again. Like it’s you talk about risk and return. It’s a continuous cycle of risk, return, risk, return.

Daniel Faloppa (34:40)
Yes. Exactly. And it can be fantastic. It can be a fantastic journey, right? So, so like like for you with with your previous exit, right? You can you can invest that in yourself in a sense go help a small company get equity into that small company and kind of do it again, right? And like that that company is not going to be able to uh to give you a lot of cash right now, but they can give you equity

Daniel Faloppa (35:02)
and if you if you grow it, right? There was a story many many years ago on on first round review which was one of the great um um management say blogs about startups and he was talking about this person I forgot the name they were specialized in internationalizing US startups right they did it at Airbnb they did like Dualingo they did a bunch of others right and every time they would just work there for like three four years make sure that that company could internationalize in in Europe and then leave right that’s an incredible role extremely useful You know it can be extremely value ad to have a person like that when you have to go through that process just doesn’t really

Belinda Murray (35:39)
I can tell you about my idea post post the pod because there is something in like coming like I’m honestly shaping it sh and then shifting it and then off you go like it’s it’s like that ability you know like you get you get the foundations in order you get it to the where it needs to get to and then it’s like okay and you know it’s like

Daniel Faloppa (35:58)
yeah your face is done and and and you move on to the next thing and and you bring that specific ific expertise to the next thing and it’s incredibly useful. You can leverage it like crazy.

Belinda Murray (36:07)
100%. Now, there’s there’s something in that. I had another question for you. Okay, my next question and and my I’ve got two final questions for you because I know it’s the start of your day and I and I do need to go and take Marley Bob for a little walk. I know you got your dog and we we’ve shared little dog stories as well. How long since you’ve had a holiday? like you’ve obviously, you know, like you say, there’s a lot of work involved when when it comes to a merger and, you know, like you say, you got to keep the dayto-day running, but then you’ve got this this other big project that is on the side, but it’s consuming you like how have you have you got any plans like how have you been able to switch off, haven’t you?

Daniel Faloppa (36:45)
Yeah. So, like last year’s have been a bit uh intense. So I think that there was time off here and there but I think like the proper holiday defined as like you actually managed to disconnect from the company and like to you know

Daniel Faloppa (36:59)
read a book that is not about business or you know it was I think it was at this point 3 years ago or something like that.

Daniel Faloppa (37:08)
It’s okay like you know it was it was a couple of years where the market went down from from the highs of 2021 2022. Um so for us it was uh was a few years where we really had to to fight to keep our uh revenue and and keep our people and so on

Daniel Faloppa (37:25)
and that is not really fun to do in my opinion like so you know so that that’s stuff that you I think need to take a holiday from what we are doing now with like this this new focus and like all these new activities and so on is like very very exciting and so in that case it’s almost fine not to take a holiday I think like it’s it’s uh it’s very engaging like you’re just engaged, right? I think it’s more like I see it as sort of defensiveness versus offensiveness.

Daniel Faloppa (37:54)
For me, I don’t know if everybody’s the same, but for me, defensiveness is extremely burdensome and

Daniel Faloppa (38:01)
exhausting,

Daniel Faloppa (38:02)
annoying, and and offensive is fun. So, I could do offensive like the whole the whole day, every day.

Belinda Murray (38:08)
I think I think about it about like dark and light energy. Like offensive defensive like defensive is dark energy. It feels really heavy, you know, like and then when it’s offensive, it’s like woo. Yeah. Like just getting up and like everything feels amazing

Belinda Murray (38:21)
and it kind of is I mean that’s that’s the nature of you know this what you do and and so yeah I think that but I do also think that you know even if you can’t have a holiday it’s that ability to inclure that you have that active recovery baked into your schedule. you know, I’m a big believer in going and having like the, you know, infrared or like doing a yoga class and and I think that is one thing that founders, you know, it’s the first thing you put to the side because you’re like, “No, I’ll get to that later. It’s not important, but it’s so important because we need to have

Belinda Murray (38:58)
back to clarity, back to what we were reading out in your bio, the ability to be

Belinda Murray (39:02)
clear, especially when it comes to things like, you know, you said in terms of the core principles of risk and return, you can’t make clear decisions when you are completely overloaded.

Daniel Faloppa (39:13)
Yeah. And and you need to think also like it’s a long journey, right? Like I’ I’ve been doing this now for uh for 14 years. like you can um you know you can do hundreds hours or weeks for a period but you cannot do it for 14 years like no no nobody can so I think you need to think about that there is also an interesting phenomenon that that I think you learn and a lot of founders don’t learn when you when you do raise capital and you just have like a negative cash flow you have a like it’s almost like a time bomb right you have a you have a deadline you need to hit certain things by that time and you need to raise more capital otherwise you’re going to be dead um It was a massive shift for us in 2017 2018 when we had to turn cash flow positive cuz we didn’t raise at the time and like when you do turn cash flow positive like all of a sudden the business like almost can go on forever unless there are massive problems or or massive shifts in the world which these days

Daniel Faloppa (40:09)
is a bit difficult to sustain but but in general right it can it can go on right and so and so like everything I think at that point changes and also your mindset goes like okay as a person as well I I need to be able to function for a very very long time. I don’t you know I cannot just function up to that moment and um and so indeed a bit of balance and a bit of I also think if you do work that hard you don’t learn fast enough to keep up with with what that how things are changing these days right and and I think that’s almost a bigger problem compared to the others if you don’t have enough time to like say read something that is not connected with what you do or talk to somebody that is not directly a sales prospect or something, you’re not going to have enough external stimulus as a manager, as a CEO, as a founder to actually be successful in a world that is changing this fast, right? And the speed of change is increasing as well.

Daniel Faloppa (41:04)
Yeah.

Belinda Murray (41:04)
Um, yeah, it’s fascinating. On that note, what would be your recommendation of a good book right now or something to to read that you

Daniel Faloppa (41:15)
Well, I’ve I’ve been I’ve been um so I come from finance and computer science, right? So the furthest thing from me is sales, right? And I’ve tried to learn sales for like 10 years and I asked hundreds of people uh how to do that and and and nobody knew and they introduced me to consultants and I didn’t like them.

Daniel Faloppa (41:33)
Um so the I found a book that is actually it’s actually here. I’m almost done with it. Uh it’s called the qualified sales leader. It’s

Belinda Murray (41:42)
Can you pull it can you pull it? Oh

Daniel Faloppa (41:44)
it’s literally about

Daniel Faloppa (41:47)
Okay. Yeah. Cool. from from John McMah and it’s uh it’s literally about software sales and it talks about like sort of foundational frameworks for software sales which is exactly what I like like understand the principles and then you can apply them in a bunch of situations and and it’s told as a story so it’s like kind of narrated it’s it’s great so

Belinda Murray (42:07)
I love a book like is there any final words of wisdom advice that you would like to share you’ve given us so much already like anything for from an eval from evaluation perspective for a founder or even an investor. I mean like one thing that I that I share that I think a lot of founders are still not doing is a lot of founders when they go fundra they they pitch the company as if it’s going to do everything for everybody be everything for everybody and what we see a lot more opportunities in is in trying to reduce that perceived risk right so anything that you have done almost in in the company at early stage should somehow shared with investors I believe like even if it doesn’t count for you as a milestone or something de-risking it might be for the investor right so for example the fact that you’ve got an office the fact that you’ve got contact with a supplier even though it’s not a contract yet the fact that you got business registration ongoing or that you had costs before right we had a lot of

Daniel Faloppa (43:11)
yeah we have a lot of of of entrepreneurs they want to hide how much they spent so far for some reason like no that’s part of the business that actually means that you’ve done something and and you should show it off. So like almost show off everything you’ve done so far cuz that’s what sets you apart from all the other investment opportunities that they have.

Belinda Murray (43:29)
I love it.

Daniel Faloppa (43:30)
Yeah,

Belinda Murray (43:31)
Daniel, thank you so much. I know that you’re really active on LinkedIn and you do write uh you know a lot of thought leadership blogging as well and so how do we find out more about Equidam the merger? How do we find out more about you?

Daniel Faloppa (43:44)
Yeah indeed. So, LinkedIn is probably my most active channel right now. Otherwise, aquedam.com. We try to make that as as informative as we can.

Belinda Murray (43:53)
Amazing. Daniel, thank you so much. I know it’s Tuesday. Well, Tuesday morning for you. So, I’m going to go off and head to the the park, speaking of some active recovery. Otherwise, I’m going to get terrorized all night tonight with balls being thrown everywhere around the house. I don’t know about your dog, but mine, he huffs and puffs when he’s like annoyed at me. So, thank you so much for your your time. Thoroughly enjoyed it and so many great insights, especially on core principles, the risk and the return. I just I just the the opportunities and I guess possibilities are endless, but it’s just knowing what your risks are when what you know from a founder and entrepreneur space and yeah, stay tuned. Who knows what it’s going to look like the VC ecosystem in the next, you know, 6 months, let alone 12 months. So, thank you for your time, Daniel. I really appreciate it.

Daniel Faloppa (44:42)
I appreciate it. Thanks a lot, Bee. Have a good day.

Belinda Murray (44:44)
You too. Thank you.