March 12, 2012 at 20:49Unfair Advantage - Interview with Sergey Belousov
An IT startup without venture capital funding is almost doomed. To attract money, you need a valid idea, a clear vision of the present and future, a motivated team and a well-thought-out mechanism for the investor to exit the project.
Sergey Belousov: “ We invest in companies no more than $ 5 million. This does not mean that a business that needs more money is bad. More than once people came to us with requests to invest 10 or 100 million dollars, but we refused. Sometimes in vain "
For the Russian IT market, Sergey Belousov is a legendary person. His very short biography looks like this: he began to engage in business as a student of the Moscow Institute of Physics and Technology, after graduation with a partner he organized the production of televisions, founded the company Rolsen. Then there was cooperation with the American software company Solomon, the creation of SWsoft in Singapore, which later turned into the world famous Parallels, Acronis and Acumatica.
“There are many different models of entrepreneurship, I am engaged in the most painful - I create many medium-sized businesses,” Belousov admits. - In the film "Social Network" the thought sounded: it is better to catch one marlin than a lot of trout. Unfortunately, I have to catch a lot of trout. During my career, I founded a couple of dozen companies, and the largest of them - Rolsen, Acronis and Parallels - are far from Facebook in terms of revenue.
In 2011, Parallels (engaged in the development of software for cloud service providers, hosters, data centers, and also produces a Desktop for Mac product that allows Windows to run on Apple computers), a landmark event happened: Sergey Belousov moved away from operational management by taking over the position of chairman of the board of directors and chief architect of Parallels. Its CEO was Birger Stan, who previously headed the Microsoft office in Russia. Belousova was carried away by another idea - venture financing. Together with partners, he created the Runa Capital fund to invest in IT projects.
“During my career, I have made many standard mistakes for a startup,” says Sergey, “at the same time engaged in a large number of projects, tried to break into the market without a competitive advantage, and thoughtlessly approached planning. I had to pay for all this. And I want to help new startups so that they do not repeat my mistakes.
The Power of Technology
- What investments does Runa Capital specialize in?
- We invest in startups at the seed and early stages. They should be ready to grow by more than $ 100 million in less than 10 years. We are not interested in small technology businesses: they do not live long, because they quickly run out of opportunities. The size of our investments is not more than 5 million dollars.
In return, we enter the startup’s share capital. The package is minority, usually from 10 to 40%. The share is determined by how much the company needs money, what is its estimated value and how much should be left to the founders and the management team so that they have enough motivation for further work. That is, it is a combination between investment, capitalization and motivation.
A prerequisite for financing a startup is a strong technological component.
- How is the power of technology determined?
- There are four indicators of the strength of technology. First, it can be patented. The second - to repeat it, you need to find a unique specialist. We have in our portfolio the project NGINX (open source web server). It was written by one person in a year - Igor Sysoev.
The third indicator - to repeat the technology, you need to work a long team for a long time. An example of such a project is Acumatica, which develops online ERP for small and medium-sized businesses. A team of 20 people has been working on it for five years.
The last indicator is stickiness: the technology is strong if it is difficult for the client to “jump off” it.
- What directions would you call the most promising for the global IT industry and, accordingly, for startups?
- Everything is pretty predictable here. The first direction is mobile applications. I think that in five years the entire solvent part of the world's population will have a powerful smartphone.
The second is social networks. A simple example: Mark Zuckerberg wants to create a company with a capitalization of $ 1 trillion. This means that once Facebook’s revenue will reach 100 billion, and around only one social network, a huge number of businesses will be created based on the correct, adequate personal data of users.
The third trend is cloud computing. I am sure that in five years this market will grow from 50 to 300 billion dollars.
The greatest prospects for the "cloud" are in the small business segment. By it I mean companies with less than a thousand employees. Such accounts for 65% of the global gross product. In absolute terms, their investments in IT are high - about $ 510 billion, but in terms of one employee they spend 14-50 times less than a big business. This is both regrettable and justifiable. A small business does not have IT expertise, it cannot hire system administrators, integrators, organize an appropriate department, buy technologies and adapt them for itself. Plus, small business is extremely diverse: the needs of plumbers in Shanghai are very different from the requests of lawyers or restaurateurs in Munich.
Small business is able to consume only ready-made IT services. And “clouds” allow them to be provided. I am sure that the demand for IT from small enterprises will increase sharply. In 2010, we estimated the IT consumption market from the clouds at $ 26 billion, by 2015 it will grow to 100 billion.
In addition, there are three more specific areas that rapid automation awaits in the near future - education, healthcare and the public sector.
Expertise is better than money
- Is it mandatory for a startup to attract venture capital investments? Is it not possible to develop on your own money or loans, without giving up anyone's share in the business?
- You need to understand that the technology business is very different from others: it is global and consolidated. In almost all segments of the global IT market, the number one player makes 75 - 80% of the profits. The remaining 20% in most cases are divided by players number two and three. And less than 5% remains on everyone else.
There is a window of opportunity on the IT market - a period of time when a segment is developing rapidly. As a rule, this is not more than ten years. Accordingly, during this period, a startup needs to grow to player number one, which is very difficult to do without external investment. Of course, there are examples in history when companies grew with their own money, but there are very few of them.
In the last 10-15 years, the infrastructure of venture financing in the world has been working very efficiently, so all the largest companies and startups in recent years have been created with the funds of venture funds. This is Apple, and Oracle, and Facebook, and Twitter, and Google.
A good venture investor increases the value of your business, confirms its quality. It should be understood that, when developing a product, you enter into a global competition with another team that is trying to capture a market with a similar solution elsewhere. In order to grow to a substantial size, you will have to hire expensive professionals, attract famous partners and win the best customers. All of them can spend five to ten hours studying your business.
The investor spends 300 hours on a startup, and votes in cash. Therefore, it is much easier for partners and customers to work with those technology companies in which well-known, large ventures have invested. If you have attracted, for example, Sequoia, Kleiner Perkins or Draper Fisher Jurvetson, this is a quality stamp.
And most importantly: venture investing in business at the initial stage is a strategic resource. He can help not only with money, but also with connections, expertise, knowledge.
This is what our foundation does: we assume active participation in the startup business. I am sure that the expertise is primary in relation to money or a share in the business. In the end, it is much more important how much your company will cost in five years than what share you will give to venture funds: 75% of $ 10 million is less than 35% of 100 million. Look at Facebook: Zuckerberg today owns only 25% of the social network.
I understand that in such a model there are disadvantages - an investor can force the founder or the management team to do what they want. But Russian startups lack the experience to create a product that can be sold for $ 100 million a year to millions of users around the world. They lack the expertise to enter the markets of the USA, Asia, Europe, they do not have ties to attract investors of the next level.
It is easy to find good programmers in the domestic market, things are worse with testers and project managers, worse with architects, and worse with specialists in the field of requirements management, product and program management.
Startups in Silicon Valley work in different conditions: you can quickly hire a person who worked for 20 years at IBM or ten at Microsoft.
- Should a startup choose a fund? Or do you have to grab the first one to offer financing?
- I think that venture should be chosen. It is necessary to compare funds with each other, choose the right one according to the conditions and expertise. Of course, there are many funds in the world: created by entrepreneurs or financiers, specializing in investments at an early stage or at a later stage. In any case, the foundation is people. We need to study their experience in creating companies, investment experience, and see a biography.
Planning is invaluable
- Under what conditions can a venture investor consider a startup as a potential object of financing?
- Of course, the first condition is a valid mission, a problem that a startup can solve. For example, Facebook from the very beginning wanted to give the opportunity to communicate, make friends, share experiences with them. For a good startup, the mission practically does not change during development.
The second is a reasonable level of risk. Venture investors will not invest in projects that cannot guarantee the solution of a task or problem. Thus, for example, scientific developments are cut off from financing. Startup technology risks should be low.
Third, a startup’s business model should be scalable. When I tried to raise venture financing in Silicon Valley in 2001, I went to the largest funds (the benefit of the application service provider was fashionable). They asked me: what size do you want to do business? I replied: $ 30 million in revenue, 15 million in profit. And he got the answer: we are not interested, we are considering a business with the possibility of growth up to $ 1 billion. Of course, there are smaller funds, but even $ 100 million in many segments of the IT industry cut off regional and national projects.
The fourth condition is a synergistic examination. Ventures are cynical and skeptical people. They will never give money to a startup if it works in a segment in which the partners of the fund do not understand.
And the last thing is the ability to exit the project. Any investor wants to earn money on your startup, and you must perfectly understand how you can provide him with such an opportunity. This is not a strict agreement recorded in the contract. But if you don’t think out the mechanism, in three years the ventures will begin to actively hypnotize you: sell the company, go on an IPO. And they can achieve what they want. Many times, investors have persuaded me to do what I do not want.
- It is well known that neither Bill Gates, nor Steve Jobs, nor Mark Zuckerberg have received higher education. Is it really so important for people creating technology startups?
- Higher education must be obtained. If only because in a good university you can find a competent, motivated team. And Bill Gates, and Steve Jobs, and Mark Zuckerberg got into good universities, met the right people there, who later became their employees and partners. Most of the SWsoft team were graduates of the Moscow Institute of Physics and Technology.
- More specifically, what does a startup need to provide to an investor?
- A business plan with an accurate forecast for a year, accurate - for three to five years and an approximate one - for ten. This does not seem complicated to me now, but when I started the business, this requirement seemed idiotic to me: how do I know how much I will sell in five years, at what price, in which markets.
In planning, not even the end result is important, but the process itself. As Dwight Eisenhower said, “Before the battle, I always considered plans useless, but planning was priceless.” The investor should understand that you have gone through the business planning process, that your plan is more or less reasonable, that you have thought through whom, what, at what price you will sell, what you are going to spend his money on and how you intend to capture the market. Very rarely, investors consider companies that in a year or two do not plan to start selling.
Next is a description of the command. Investing in a company at an early stage is primarily an investment in a team. For a year and a half I watched a huge number of startups, and it is amazing how rarely the founders talk about the team. At best, it is presented on the last slide with photos and phones. No background. And the investor should know why these people want to do this startup, what are their motivation, morality, abilities, intellectual capabilities, professional experience. The team must have a leader. A maximum of two. But the responsibility should be clearly divided between them. Startups in which three or more leaders do not live long.
The next point is a competition plan. The mistake of most startups, especially local ones, is that they do not see their rivals. I often hear: in a city or region we have no competitors. The technology business is at least conducted within the country. If there are no competitors in Russia, then there are global companies that are able to enter the territory.
In addition, there are indirect rivals that can become direct. All this must be carefully calculated. There is an opinion that stupid programmers work in large companies or they have poor engineering processes. I will dispel the myth: most often in large corporations specialists work much higher than you can afford, and the engineering processes there are better than any team in Russia. So if they want to develop your competitor, they will do it.
They can be defeated only by choosing a narrow protected niche where the huge resources and competencies of large companies will not matter. In my opinion, the right strategy is to seize one niche, get all possible profit from it, then go to neighboring ones, and then to a wide market. A startup that does not know a niche, does not have a focus, will certainly lose.
- And how to choose this niche?
- You can win only where you have an unfair advantage. This is one of the tenets of the Book of Five Rings by Miyamoto Musashi, a famous samurai who lived in the 17th century. You see a man more than yourself - run away, you see two - run away, you see a samurai with two swords - run away.
There are many stories about Miyamoto Musashi. One of them confirms this postulate. Once the famous samurai Sasaki Kojiro challenged Musashi to a duel. The battle was appointed on the banks of the river. Kojiro arrived at the appointed time, but did not find the enemy. As time passed, the sun began to set, Kojiro thought that Miyamoto would come from land, but he unexpectedly sailed on a boat, and when Sasaki, not getting his sword, came up to him to figure out what was the matter, Musashi shot him twice with an oar, broke head and swam away. Bottom line: Kojiro was nervous, the sun was shining in his eyes, he did not expect the fight to begin in this way. And Musashi won.
- What should a startup do if he receives a refusal from the venture?
- Startup is a very difficult activity. To develop it, stubbornness and activity are needed. I always have before me an example of Starbucks. Its founder, before attracting financing, received 223 refusals. I experienced a couple of dozen failures in the early 2000s.
- And if the startup died, what consequences await the founder?
“It will seriously damage his health.” I don’t threaten, it’s just emotionally, psychologically and physically that the death of a business is hard to survive. In my biography there were a couple of completely unsuccessful projects.
There are usually no consequences on the part of venture. An investor does not conclude an agreement with a startup with prescribed liability, fines, and forfeits. We cannot impose sanctions on the team for not fulfilling the business plan, but let's start thinking badly about it. I am sure that Runa Capital will have a bad experience. Usually shoots no more than 10% of projects. But we are not a bank. Venture is a startup partner who shares risks with him.
Sergey Belousov: “ We invest in companies no more than $ 5 million. This does not mean that a business that needs more money is bad. More than once people came to us with requests to invest 10 or 100 million dollars, but we refused. Sometimes in vain "
For the Russian IT market, Sergey Belousov is a legendary person. His very short biography looks like this: he began to engage in business as a student of the Moscow Institute of Physics and Technology, after graduation with a partner he organized the production of televisions, founded the company Rolsen. Then there was cooperation with the American software company Solomon, the creation of SWsoft in Singapore, which later turned into the world famous Parallels, Acronis and Acumatica.
“There are many different models of entrepreneurship, I am engaged in the most painful - I create many medium-sized businesses,” Belousov admits. - In the film "Social Network" the thought sounded: it is better to catch one marlin than a lot of trout. Unfortunately, I have to catch a lot of trout. During my career, I founded a couple of dozen companies, and the largest of them - Rolsen, Acronis and Parallels - are far from Facebook in terms of revenue.
In 2011, Parallels (engaged in the development of software for cloud service providers, hosters, data centers, and also produces a Desktop for Mac product that allows Windows to run on Apple computers), a landmark event happened: Sergey Belousov moved away from operational management by taking over the position of chairman of the board of directors and chief architect of Parallels. Its CEO was Birger Stan, who previously headed the Microsoft office in Russia. Belousova was carried away by another idea - venture financing. Together with partners, he created the Runa Capital fund to invest in IT projects.
“During my career, I have made many standard mistakes for a startup,” says Sergey, “at the same time engaged in a large number of projects, tried to break into the market without a competitive advantage, and thoughtlessly approached planning. I had to pay for all this. And I want to help new startups so that they do not repeat my mistakes.
The Power of Technology
- What investments does Runa Capital specialize in?
- We invest in startups at the seed and early stages. They should be ready to grow by more than $ 100 million in less than 10 years. We are not interested in small technology businesses: they do not live long, because they quickly run out of opportunities. The size of our investments is not more than 5 million dollars.
In return, we enter the startup’s share capital. The package is minority, usually from 10 to 40%. The share is determined by how much the company needs money, what is its estimated value and how much should be left to the founders and the management team so that they have enough motivation for further work. That is, it is a combination between investment, capitalization and motivation.
A prerequisite for financing a startup is a strong technological component.
- How is the power of technology determined?
- There are four indicators of the strength of technology. First, it can be patented. The second - to repeat it, you need to find a unique specialist. We have in our portfolio the project NGINX (open source web server). It was written by one person in a year - Igor Sysoev.
The third indicator - to repeat the technology, you need to work a long team for a long time. An example of such a project is Acumatica, which develops online ERP for small and medium-sized businesses. A team of 20 people has been working on it for five years.
The last indicator is stickiness: the technology is strong if it is difficult for the client to “jump off” it.
- What directions would you call the most promising for the global IT industry and, accordingly, for startups?
- Everything is pretty predictable here. The first direction is mobile applications. I think that in five years the entire solvent part of the world's population will have a powerful smartphone.
The second is social networks. A simple example: Mark Zuckerberg wants to create a company with a capitalization of $ 1 trillion. This means that once Facebook’s revenue will reach 100 billion, and around only one social network, a huge number of businesses will be created based on the correct, adequate personal data of users.
The third trend is cloud computing. I am sure that in five years this market will grow from 50 to 300 billion dollars.
The greatest prospects for the "cloud" are in the small business segment. By it I mean companies with less than a thousand employees. Such accounts for 65% of the global gross product. In absolute terms, their investments in IT are high - about $ 510 billion, but in terms of one employee they spend 14-50 times less than a big business. This is both regrettable and justifiable. A small business does not have IT expertise, it cannot hire system administrators, integrators, organize an appropriate department, buy technologies and adapt them for itself. Plus, small business is extremely diverse: the needs of plumbers in Shanghai are very different from the requests of lawyers or restaurateurs in Munich.
Small business is able to consume only ready-made IT services. And “clouds” allow them to be provided. I am sure that the demand for IT from small enterprises will increase sharply. In 2010, we estimated the IT consumption market from the clouds at $ 26 billion, by 2015 it will grow to 100 billion.
In addition, there are three more specific areas that rapid automation awaits in the near future - education, healthcare and the public sector.
Expertise is better than money
- Is it mandatory for a startup to attract venture capital investments? Is it not possible to develop on your own money or loans, without giving up anyone's share in the business?
- You need to understand that the technology business is very different from others: it is global and consolidated. In almost all segments of the global IT market, the number one player makes 75 - 80% of the profits. The remaining 20% in most cases are divided by players number two and three. And less than 5% remains on everyone else.
There is a window of opportunity on the IT market - a period of time when a segment is developing rapidly. As a rule, this is not more than ten years. Accordingly, during this period, a startup needs to grow to player number one, which is very difficult to do without external investment. Of course, there are examples in history when companies grew with their own money, but there are very few of them.
In the last 10-15 years, the infrastructure of venture financing in the world has been working very efficiently, so all the largest companies and startups in recent years have been created with the funds of venture funds. This is Apple, and Oracle, and Facebook, and Twitter, and Google.
A good venture investor increases the value of your business, confirms its quality. It should be understood that, when developing a product, you enter into a global competition with another team that is trying to capture a market with a similar solution elsewhere. In order to grow to a substantial size, you will have to hire expensive professionals, attract famous partners and win the best customers. All of them can spend five to ten hours studying your business.
The investor spends 300 hours on a startup, and votes in cash. Therefore, it is much easier for partners and customers to work with those technology companies in which well-known, large ventures have invested. If you have attracted, for example, Sequoia, Kleiner Perkins or Draper Fisher Jurvetson, this is a quality stamp.
And most importantly: venture investing in business at the initial stage is a strategic resource. He can help not only with money, but also with connections, expertise, knowledge.
This is what our foundation does: we assume active participation in the startup business. I am sure that the expertise is primary in relation to money or a share in the business. In the end, it is much more important how much your company will cost in five years than what share you will give to venture funds: 75% of $ 10 million is less than 35% of 100 million. Look at Facebook: Zuckerberg today owns only 25% of the social network.
I understand that in such a model there are disadvantages - an investor can force the founder or the management team to do what they want. But Russian startups lack the experience to create a product that can be sold for $ 100 million a year to millions of users around the world. They lack the expertise to enter the markets of the USA, Asia, Europe, they do not have ties to attract investors of the next level.
It is easy to find good programmers in the domestic market, things are worse with testers and project managers, worse with architects, and worse with specialists in the field of requirements management, product and program management.
Startups in Silicon Valley work in different conditions: you can quickly hire a person who worked for 20 years at IBM or ten at Microsoft.
- Should a startup choose a fund? Or do you have to grab the first one to offer financing?
- I think that venture should be chosen. It is necessary to compare funds with each other, choose the right one according to the conditions and expertise. Of course, there are many funds in the world: created by entrepreneurs or financiers, specializing in investments at an early stage or at a later stage. In any case, the foundation is people. We need to study their experience in creating companies, investment experience, and see a biography.
Planning is invaluable
- Under what conditions can a venture investor consider a startup as a potential object of financing?
- Of course, the first condition is a valid mission, a problem that a startup can solve. For example, Facebook from the very beginning wanted to give the opportunity to communicate, make friends, share experiences with them. For a good startup, the mission practically does not change during development.
The second is a reasonable level of risk. Venture investors will not invest in projects that cannot guarantee the solution of a task or problem. Thus, for example, scientific developments are cut off from financing. Startup technology risks should be low.
Third, a startup’s business model should be scalable. When I tried to raise venture financing in Silicon Valley in 2001, I went to the largest funds (the benefit of the application service provider was fashionable). They asked me: what size do you want to do business? I replied: $ 30 million in revenue, 15 million in profit. And he got the answer: we are not interested, we are considering a business with the possibility of growth up to $ 1 billion. Of course, there are smaller funds, but even $ 100 million in many segments of the IT industry cut off regional and national projects.
The fourth condition is a synergistic examination. Ventures are cynical and skeptical people. They will never give money to a startup if it works in a segment in which the partners of the fund do not understand.
And the last thing is the ability to exit the project. Any investor wants to earn money on your startup, and you must perfectly understand how you can provide him with such an opportunity. This is not a strict agreement recorded in the contract. But if you don’t think out the mechanism, in three years the ventures will begin to actively hypnotize you: sell the company, go on an IPO. And they can achieve what they want. Many times, investors have persuaded me to do what I do not want.
- It is well known that neither Bill Gates, nor Steve Jobs, nor Mark Zuckerberg have received higher education. Is it really so important for people creating technology startups?
- Higher education must be obtained. If only because in a good university you can find a competent, motivated team. And Bill Gates, and Steve Jobs, and Mark Zuckerberg got into good universities, met the right people there, who later became their employees and partners. Most of the SWsoft team were graduates of the Moscow Institute of Physics and Technology.
- More specifically, what does a startup need to provide to an investor?
- A business plan with an accurate forecast for a year, accurate - for three to five years and an approximate one - for ten. This does not seem complicated to me now, but when I started the business, this requirement seemed idiotic to me: how do I know how much I will sell in five years, at what price, in which markets.
In planning, not even the end result is important, but the process itself. As Dwight Eisenhower said, “Before the battle, I always considered plans useless, but planning was priceless.” The investor should understand that you have gone through the business planning process, that your plan is more or less reasonable, that you have thought through whom, what, at what price you will sell, what you are going to spend his money on and how you intend to capture the market. Very rarely, investors consider companies that in a year or two do not plan to start selling.
Next is a description of the command. Investing in a company at an early stage is primarily an investment in a team. For a year and a half I watched a huge number of startups, and it is amazing how rarely the founders talk about the team. At best, it is presented on the last slide with photos and phones. No background. And the investor should know why these people want to do this startup, what are their motivation, morality, abilities, intellectual capabilities, professional experience. The team must have a leader. A maximum of two. But the responsibility should be clearly divided between them. Startups in which three or more leaders do not live long.
The next point is a competition plan. The mistake of most startups, especially local ones, is that they do not see their rivals. I often hear: in a city or region we have no competitors. The technology business is at least conducted within the country. If there are no competitors in Russia, then there are global companies that are able to enter the territory.
In addition, there are indirect rivals that can become direct. All this must be carefully calculated. There is an opinion that stupid programmers work in large companies or they have poor engineering processes. I will dispel the myth: most often in large corporations specialists work much higher than you can afford, and the engineering processes there are better than any team in Russia. So if they want to develop your competitor, they will do it.
They can be defeated only by choosing a narrow protected niche where the huge resources and competencies of large companies will not matter. In my opinion, the right strategy is to seize one niche, get all possible profit from it, then go to neighboring ones, and then to a wide market. A startup that does not know a niche, does not have a focus, will certainly lose.
- And how to choose this niche?
- You can win only where you have an unfair advantage. This is one of the tenets of the Book of Five Rings by Miyamoto Musashi, a famous samurai who lived in the 17th century. You see a man more than yourself - run away, you see two - run away, you see a samurai with two swords - run away.
There are many stories about Miyamoto Musashi. One of them confirms this postulate. Once the famous samurai Sasaki Kojiro challenged Musashi to a duel. The battle was appointed on the banks of the river. Kojiro arrived at the appointed time, but did not find the enemy. As time passed, the sun began to set, Kojiro thought that Miyamoto would come from land, but he unexpectedly sailed on a boat, and when Sasaki, not getting his sword, came up to him to figure out what was the matter, Musashi shot him twice with an oar, broke head and swam away. Bottom line: Kojiro was nervous, the sun was shining in his eyes, he did not expect the fight to begin in this way. And Musashi won.
- What should a startup do if he receives a refusal from the venture?
- Startup is a very difficult activity. To develop it, stubbornness and activity are needed. I always have before me an example of Starbucks. Its founder, before attracting financing, received 223 refusals. I experienced a couple of dozen failures in the early 2000s.
- And if the startup died, what consequences await the founder?
“It will seriously damage his health.” I don’t threaten, it’s just emotionally, psychologically and physically that the death of a business is hard to survive. In my biography there were a couple of completely unsuccessful projects.
There are usually no consequences on the part of venture. An investor does not conclude an agreement with a startup with prescribed liability, fines, and forfeits. We cannot impose sanctions on the team for not fulfilling the business plan, but let's start thinking badly about it. I am sure that Runa Capital will have a bad experience. Usually shoots no more than 10% of projects. But we are not a bank. Venture is a startup partner who shares risks with him.
