Tzakhi (00:00.684)
Hi Daniel.
Daniel Sawko (00:02.346)
Hey, Saki. Thanks for having me on.
Tzakhi (00:04.787)
Thanks for joining us. So just for the sake of our audience, this is the Meet.Capital podcast for startups. And every week we have a guest, which tells us about, gives us his take on the startup world and gives some advice that helps startups succeed and raise capital. And you're a brilliant guest for us. I've been wanting to invite you for a while. Really appreciate you coming, because I know you've had a very good time.
Hectic and special week. Congratulations on the birth of your daughter. And it's amazing that you're here. I mean, you haven't been sleeping. Yeah.
Daniel Sawko (00:46.514)
Is that obvious? Yeah. Thanks for having me. And yeah, apologies for the background. I've actually been kicked out of my usual office because that's being used at the moment to sort of host our newborn. But yeah, thanks for having me on. Exactly.
Tzakhi (01:02.763)
Get used to it. Yeah. Okay, good. So thanks a lot. So you're the co-founder of ShipShape VC, which we'll talk about in a minute, which is a platform that helps startup founders and investors find each other, and it's free for startup founders. So it's really brilliant and convenient for them. We'll talk about that. You know what, maybe I'll let you just say a word about.
yourself and how you got to found ShipShape VC. I know you've worked in the financial sector and been part of a startup and raised capital for it, but maybe you'll tell us a bit.
Daniel Sawko (01:39.55)
Yeah, so I did economics at university, I always found information asymmetry very interesting and got to revisit that later on in my career. I went to work in management consulting, mostly in financial services, found really big financial institutions, quite boring, very slow moving, and really enjoyed working more on the startup cutting edge end of what was going on in those
Daniel Sawko (02:09.458)
startup that was automating tax compliance in a very specific part of banks and the CEO and founder of that startup basically asked me to go and research which investors would be relevant to that particular domain or niche that they were building in and that's where I discovered the problem that ultimately shipshaped.vc looks to answer so it was really difficult.
All of the tools that are out there I found either extremely expensive, so you've got people like Pitchbook, etc. Startup founders can't afford a license that's as expensive as that. And then you also have these free investor listeners, and those weren't necessarily that helpful for identifying exactly which people I should be speaking with and focusing my effort and energy building a relationship with.
We were in the end successful, so we raised a 5 million series A, but it was way harder and used up far more capacity than it ought to have done. And I just thought, well, you know what? If we're having this problem in this particular domain in which we're innovating, there are going to be tens of thousands of others in their own niche domains who really need to identify which investors might want to join their crowd early and to minimise the amount of time and disruption involved in doing that.
Tzakhi (03:35.495)
Okay, so now I guess that leads directly to ShipShape VC. Can you tell us a bit how it works? I understand the basic framework and I know there are similar platforms which we'll talk about in a minute. Basically, startup registers, enters their information. On the other end, they're investors and I guess ShipShape connects them, but I think there's probably more to it than that. So can you explain?
Daniel Sawko (04:05.226)
Absolutely, yeah. So I'd say that there's more and less to it than that. So we don't directly facilitate introductions. So we are primarily a research platform. We aggregate data from the web. So we look at which websites are relevant from the perspective of a founder. So we look at investment funds, whether those are VCs, angel syndicates, even some PE groups.
Tzakhi (04:16.215)
Okay.
Daniel Sawko (04:34.506)
We look at their websites, we basically aggregate the data that we can pull in from those, and then we make that easy to search for founders. So a founder can type in something like large language models, and we'll go out and we'll look at what we can pull in from the relevant part of the web and make that easier for founders to do their research on who they might want to start building a relationship with. It's worth mentioning, yeah, we don't directly facilitate any type of introduction between
investors and founders, it's much more a research tool. We enable people to extract that data, so it's free to use, it's free to extract data from, and then you can add that to a CRM or give it to your fundraising advisor to help them with basically doing outreach etc.
Tzakhi (05:23.687)
Okay, so, and it's free for founders, right? For startup founders.
Daniel Sawko (05:28.622)
Correct, actually it's free for anyone, but majority of our users are indeed start-up founders who are looking for which investors they want to go to.
Tzakhi (05:31.112)
Oh, OK.
Tzakhi (05:37.151)
Okay. And what they get is a curated list of investors that matches their domain and stage.
Daniel Sawko (05:46.798)
Correct, yeah, so we're just adding in stage at the moment, but yes, if you go in and you type in something really complicated like gallium nitride compound semiconductors or mesenchymal stem cells for wound healing, the search engine will generate results on which investors you might want to go speak with. And that's really what makes us so excited is your ability to very quickly identify that sort of long tail niche of the investment world.
going to be the most interested in what you build.
Tzakhi (06:20.387)
Okay. And can you kind of put ShipShape in the bigger background of other matchmaking platforms? Because there are quite a few of them and obviously each one has their own unique take. Probably the most successful biggest one is Angelist. So can you say a bit more to that?
Daniel Sawko (06:45.962)
Yeah, definitely. So I think first things first, we don't host both sides within the, it's not a platform per se so much as a search engine. We don't really intend to build that two-way communication just yet. At some point, we probably will start adding that in, but for the moment, we just want to be a research tool rather than building out that CRM. And that also, I think, reflects in terms of our day one commercial.
Tzakhi (07:00.707)
Okay.
Daniel Sawko (07:15.794)
outlook on how we monetize. So we don't look to monetize the transactions that occur between founders and investors. So we don't charge either side of that equation with regards to them successfully finding each other. We think that would be, yeah, we'd start taxing usage. And actually what we're much more interested in is gathering the data on businesses intentions to
Daniel Sawko (07:45.266)
organizations that want to help fundraising and growing businesses with their success. So, for example, local government basically procures data from us on which businesses locally they might want to offer grants to or fundraising programs or fundraising support programs. We basically leverage our data in a, I suppose it's still a marketplace, but it's not a marketplace between
the founders and the investors, actually we're leveraging the data that we're picking up on usage and then creating a market for the market.
Tzakhi (08:21.859)
Okay. And first of all, it's a very interesting financial model or business model for yourself. Kind of like, you know, I'm thinking maybe it's similar to more to like a social media platform that allows you to participate for free and just leverages your data and most people don't mind. So yeah, interesting. Okay. Now, from the founder's perspective, obviously, if they're looking for investors.
coming to ShipShape, getting a very pinpointed list that they can use is very useful. What do they learn from the process in ShipShape? Or maybe I'll say it differently. I assume that the way that you built the search and the criteria is related to your philosophy and what is the right way to raise capital. So
What can you tell startups to help them be more successful when they're raising capital through ShipShape or otherwise?
Daniel Sawko (09:27.47)
I think that's a really good way of putting it because it does reflect our own philosophy on the way that we believe that founders should go about raising capital, which is... yeah, and that kind of boils down to what doctrine we think is a successful one that we have ourselves followed, which is to find where you've got an aligned interest with someone. So if you and I both like or are both
green hydrogen or hydrogen gas extraction, and I can see that you as an investor have published content and you're talking about that topic a lot. Ultimately, if I'm developing something in that space, it means that I can see that you've got aligned interests with what we're building. And that really is for us the starting point of that potential relationship, is to empower founders with the knowledge of
who it's worth investing time in. And ultimately that works in the other way as well, where the investor can see that someone has spent the time researching that there's someone worth investing time in, and they're much more likely to reciprocate on that basis. So actually, our data shows that if you're putting research in to why it's that individual that you're reaching out to, and you can evidence that, you're seven times more likely to get a positive response.
from that opening conversation. That doesn't necessarily mean it converts, but it definitely converts into a meaningful conversation between two parts.
Tzakhi (11:07.767)
When you talk about the information about the investor, are you talking about things like their past positions or is it also things that they published? How deep do you go? Do you see where they commented or what they liked on social media?
Daniel Sawko (11:30.462)
So we don't yet go that deep. I mean, I think at some point we'd like to, especially if it's professional social media. So we don't really, philosophically, we don't really agree with going into things like Facebook or Instagram to try and glean these snippets of information. It's much more interesting to look at LinkedIn or blogs and newsletters that are being intentionally published with the aim of marketing their capital. It's the prime, you know,
It's the primary reason why investors are doing it. They're aiming to market their capital to a particular audience. The problem is that because the web is so siloed, that makes it really difficult for founders to one, identify which investors are relevant, and then also across the web's different silos in terms of publications, where they then gotta go find it. Because you then have a sort of...
Tzakhi (12:05.651)
Right.
Daniel Sawko (12:25.138)
exponential increase in the difficulty of researching any particular given investor that might or might not be interested in what you're building. If you're doing this without aggregating the data first. So that's the way that we think about it is, yeah, we're pulling in that data. We're leveraging more content they're publishing than things like where they've worked. Although actually, I think that's a really good idea for futures.
Thank you, Saki. We'll give you credits in the script at the end.
Tzakhi (12:58.687)
Yeah, that's the first thing I would think is a person's professional, their experience from their professional career. And if they're an investor, of course, from previous investments, which is also a kind of a part of their professional career in a way.
Daniel Sawko (13:18.394)
That's a really good point. We do actually look through portfolio companies that funds have been investing in. It does give founders the ability to see whether or not that's a fund with relevant expertise in a particular domain. If I go in and I type in tax compliance, then actually one of the funds that will appear against that is one of the funds that actually invested in the previous startup called Anthemis. They invested not just in the previous company I worked for, but actually
invested in a couple of others that are in the field of tax compliance and therefore quite rightly they appear relatively high against that search that I enter into the search engine exactly for that reason.
Tzakhi (14:03.527)
But is it on the level, should founders look for their investors on the investment entity level or on the partner level? Because yes, I mean, you find a VC, like what we say on meat capital, you can have a VC, you see that they are relevant in terms of their experience, past investments, domains that they're interested in.
But then what I tell people to do is to go to their LinkedIn page, find the partners in the VC, and then see which of those are the ones to connect with, with various criteria, which is the best one to connect with. The best is, of course, the one that's closest to you. But if none of them are, then the one that's most active and maybe someone that you can find more information on and find more common ground with. But do you guys work on the?
on the level of the partner or on the level of the entity.
Daniel Sawko (15:07.362)
Both and so the search engine we basically have at the moment three different views and The idea of each one of those is to give the maximum number of clues to a to a founder that's doing research So we think of it very much as almost like you're trying to give Sherlock Holmes the maximum number of clues that's going to help them and so Sometimes funds don't publish content Sometimes you can only glean from their portfolio companies that they're interested in
Sometimes the partners at those funds don't publish any content. And again, you can only glean from portfolio companies. And you've got other instances where, you know, there might not be any portfolio companies, but they do talk a lot about open banking, for example. And therefore you can leverage each one of these clues to narrow down that potentially very long list to something that's much more manageable. And because it's much more manageable, you can put far more effort into each bit of outreach because I think, you know.
Tzakhi (15:49.536)
Yeah.
Daniel Sawko (16:06.422)
your points are 100% correct. If you can identify the fund, you want to identify the right person at that fund to reach out to you. That's definitely possible if you've narrowed down the number of funds to a couple dozen. It's not so possible if you've got hundreds upon hundreds to look for.
Tzakhi (16:18.583)
Thank you.
Tzakhi (16:24.799)
Okay. Now, so if I, I'm trying to boil down what would be, let's say, the ship shape method of raising capital. So find the relevant investors and try to narrow down that list. If it's at the appropriate level, then VCs, if it's early startup, then there will be angels, I presume, and angel groups. And then...
And then go to the level of the partner or individuals in those organizations, if those are organizations, and find the ones that are closest to you and reach out to them.
Daniel Sawko (17:07.863)
Yeah, and reach, reach out.
Tzakhi (17:09.308)
referencing the point of data that led you to reach out to them from the beginning.
Daniel Sawko (17:15.998)
100%. And we ourselves have used that method using ship shape.vc. We basically searched for which VCs were interested in leveraging data science in venture capital. And we were we actually found one of our angel investors who is now the director of data science at Greycroft over in the US. And we basically identified that he was interested in what we're building, leveraging our own search engine for that purpose.
Tzakhi (17:43.635)
Nice.
Daniel Sawko (17:44.85)
And so that was, to be fair, that was just the start of a relationship. This is quite early on in our journey. And I think it was over a year until he then invested, but that connection, that relationship would never have been built had we not reached out with a message that referenced the fact that we had aligned interests. And so.
Tzakhi (18:10.088)
How do you phrase it? Or just about, I guess it wouldn't be, no, just to hear how you would do it.
Daniel Sawko (18:12.346)
Oh, yeah. Yeah.
Yeah, I mean, so to be fair, in this instance, it was somewhat different because the message went something like this. So it was like, hey, Francesco, we used our own search engine that leverages data science and venture capital to see. That's for us. Yeah. So I would replicate that with others too. So whether it's
Tzakhi (18:35.874)
Yeah, that was for you. That's for you.
Daniel Sawko (18:44.494)
commenting on a post that they've put out about, I don't know, let's say that they're talking about desalination technology and you're building something in that space then Contributing your thoughts and knowledge to that topic actually starts positioning yourself on a far more level playing field because you're contributing your domain expertise with that individual
And you can do that in a comment, you can do it in a DM, but actually it's a wonderful way of opening up a conversation. And I think additionally, it helps you to make sure that the relationship starts off on the level playing field rather than it being a very obvious imbalance between those with capital and those seeking it. Actually, you are in theory both on the same team, right? And that's the way that you want, both of you want that relationship to grow.
is for both of you to be on the same team to help solve that problem. You've got the idea and the tech, they've got the capital. And that's ultimately what you want. That's the type of relationship that you want to foster.
and therefore going in referencing and evidencing why you're that perfect partner is the way that we would recommend doing it. So yeah, reference it if you can, reference why you're relevant and reference, and if you're, you know, if you're going at this on a shorter time frame, reference why the capital would make a difference to you. I would probably recommend, however, just building a relationship without capital being the initial point of that conversation
Tzakhi (19:53.503)
Okay.
Daniel Sawko (20:23.126)
Yep, the classic phrase of people invest in lines, not dots. Don't go in with just one dot.
Tzakhi (20:34.149)
There are different takes on that and there are different, I think, also different types of investors. I think it works what you're saying is true for a lot of investors, but for a lot of investors, there's also the situation where, and those are actually in a way the best investors, people that really want to deploy capital into startups.
And they definitely get a lot of deal flow because just reality, there's more deal flow than there are investors to handle it. And they really want to get to the point quickly and understand if the conversation is worth having. But to add to your point, I'd say, yeah, if you can show that investor that you have something to say to them that's interesting and that you have something to give to them.
Because if you're a founder, you should be an expert in whatever you're doing. And your tiny niche of whatever you're building, you should be an expert. And more than that, you should be a visionary because you have a vision of how the future can look with your solution, which is different from the way things are now. So that is something that founders have to give to investors. And I think it's
true to a lot of founders, forget that and come to the conversation from the point of asking for something and not from the point of sharing or exchanging. And part of the exchange is, of course, the ability to give and you have a lot to give as a founder because you're an expert.
Daniel Sawko (22:08.714)
Yeah, I couldn't agree more. I think that going in with that angle, that ambition, is what someone who's deploying capital is going to want to see. Yeah, I think it's a shared philosophy.
Tzakhi (22:25.21)
Okay. How does
Tzakhi (22:32.759)
How does using ShipShape come in your mind as part of the fundraising strategy? Meaning, it's hard to raise capital. I mean, you've had that, you've gone through that pain yourself. And I think now specifically it's very hard to raise capital for various reasons. How does this type of work that you're describing with ShipShape, which I...
startups could theoretically also do by themselves, just do spend a lot of time researching investors and then reaching out to a very select few of them. How does that fall in the overall picture of their efforts to raise capital?
Daniel Sawko (23:20.238)
We're at the start of that journey. We actually did some calculations a few years ago for a grant that we were successful in and we calculated something like 16 to 20 weeks worth of manual effort would be required by a human looking through, I think we assumed like 800 VC funds. So huge amount of manual effort.
saved in terms of the research, but it is just the start of that journey. We don't do the CRM bit, we don't do the creation of a pipeline then to manage, we don't do the outreach, we're really focused on just that research piece and then ultimately we're building ourselves as a piece of infrastructure that others can then take data from, take that information from and then continue that journey. So whether that's
leveraging professional fundraising help, or if it's leveraging other systems like CRMs, or like they're doing it in Plect Drive or HubSpot, so that they can extract that data and then manage the rest of that process themselves. So yeah, we're just that first conversation. We don't take pitch decks or business plans, financial models, like none of that comes into the search engine, none of it gets transferred to investors. That still is all yet to happen.
in that founders discussion and conversation with those that they identify as being relevant to their sort of initial long list, their starting list. And then there's that entire process and to and fro and relationship building that's yet to happen.
Tzakhi (25:04.995)
Okay, I think that's clear. Another question for you, Daniel. You are taking information from the founders and you're gathering information about the investors. So that must, I know that the information you're gathering from the founders is not for the investors specifically, but I imagine it's also built in relation to your philosophy and your understanding of what is the important information.
that startups should gather on themselves and present to investors. So can you say a bit about that?
Daniel Sawko (25:43.066)
Yes, so, yeah, we do pick up data points on those who are seeking capital. And we basically try and assess not necessarily how good their documentation is, but the level of documentation that they've got when they start that process. And so we off the back of that actually get some very good data points about how ready different founders are depending on the check size that they're seeking. And it's probably not that surprising, but
The larger the check size it's being sought, the higher the likelihood that they've got all their documents in order. You get some obviously some very frightening outliers where you've got people looking for tens of millions and they've not even got a pet check. But those are very much, yeah, those are outliers. And I suppose one of the reasons why we gather that data is yeah, quite, yeah, I mean, you know, unless they're based in Europe and they're developing an open AI challenger,
Tzakhi (26:33.64)
Eternal optimists.
Daniel Sawko (26:42.87)
then yeah, I'm not sure what their success percentage is going to be like, but yeah, it's a really, it's a really interesting gathering that data is really interesting and very informative. And we ultimately want to leverage that data to help improve the disciplines that can be taught to founders about how to maximize the efficiency of their usage of time. We're talking, you know, we're talking about some of the
the best and brightest compute power of this generation of humanity. And if we can maximize that effort on what each of these individuals are brilliant at doing, then ultimately humanity progresses much faster. And so if, if by us just asking a couple of questions, we can stop producing more data and insights that can then be better leveraged by others in the ecosystem as to where to focus their efforts.
actually we think that we're doing a huge net benefit to the ecosystem just by asking that question from a large enough group of businesses.
Tzakhi (27:50.259)
Is there some insights that you already have from looking at your data as to what startups should be doing or level of preparation compared to the amount of capital they're raising or the stage that they're in?
Daniel Sawko (28:04.722)
Yes, I'd say across the board, the number of businesses that are seeking to raise capital or are you starting their fundraising journey that have data rooms prepared is really low. It's below 50% for those who are raising under half a million and it doesn't climb above 70% even for those who are raising over five million. And I would argue that yes, it's really painful to be organized when you're starting your fundraising. You've got so many other things that you need to do.
But if an investor decides to take a deeper look at your business, you're going to need to have that. And so, yeah, I think the big takeaway would be have your data room ready. It doesn't need to have everything 100% complete within it, but have something there that an investor can take a look through and can ask for additional information if they need it. But they do want to see that you have thought ahead so that if they want to move quickly, you can. What they don't want to do and what you don't want to do is to wait for a month.
time kills deals, we all know. And nowhere is that more true than in the world of investment.
Tzakhi (29:15.071)
Yeah, I think, you know, when you're building a business in the beginning, you try to kind of not do what you don't really, really have to do because you're stranded and you have, you're lacking resources and lacking time. So maybe that's the reason why founders don't do it, but I guess if you're really keen on
Daniel Sawko (29:15.214)
So yeah.
Tzakhi (29:37.159)
actually raising money and it's not just an experiment as let me talk to some investors and see how it goes if you're if you actually believe that you're going to raise the money and you decided that that's what you're going to do then you're going to need the data room.
Daniel Sawko (29:50.09)
Well, I'm saying that that's I think founders by nature are very good at identifying what the next immediate bottleneck is, and which spinning plate it is that's going to require their attention. And so putting planning and by the way, I'm, I'm as guilty of this as anyone putting planning and forethought into conducting a race properly is something that actually I think sits juxtaposed to where many founders natural strengths are. And so yeah, if that's something so
I'm very lucky in that I've got a co-founder who's extremely organised and between us we can basically produce that documentation and organise it properly for investors. I wouldn't be able to do that, not wouldn't be able to, I would really find it difficult behaviourally to do that because it's just not in my nature. I like focusing on what the next, solving the next problem.
and not necessarily always thinking about the problems of four or five steps down the line. I'm thinking about them, but it's not where my effort and attention is necessarily going to. So yeah, I think actually it's an area in which founders should go and seek advice and support on. It's not as difficult as you think it is, but you have to go through the process once and having someone potentially holding your hand through that is actually useful.
Tzakhi (31:12.247)
Okay, Daniel, this was wonderful. Really appreciate you coming at this time and again, congratulations. And yeah, let's talk soon. And thanks so much. This was really, really wonderful.
Daniel Sawko (31:27.51)
Thanks Sahil. Yeah, it's been loads of fun and thanks for the congratulations to you.
Tzakhi (31:32.503)
Bye all the best.
