November 30, 2017

Interview with Paul Wilson

What has you excited about the tech space?
The tech space is quite obviously an exciting space, as every industry is being transformed with resulting winners and losers.  Disrupt or be disrupted.  Bailador is positioned to take full advantage of that. There’s an enormous amount of opportunity and, right now, it’s more exciting than anything I’ve encountered in my career over the last 25 years.

What aspects of Bailador keep you motivated?
Other than the tech aspect of Bailador, I’m motivated daily by working with a fantastic bunch of smart, driven people. We’re very well positioned to take full advantage of the tech space, and six years ago we intentionally positioned ourselves to focus on the expansion stage of accelerating businesses. We don’t invest in start-ups with a high rate of failure and we don’t invest in mature companies where the valuations mean a lot of the upside may already have been harvested. We stand firmly in the middle.

Bailador focuses on businesses that have proven their model and proven their teams, generally have several million dollars of revenue, and are usually already achieving success in international markets. Bailador helps these companies recruit great people and execute their strategy to become very large successful companies. It’s exciting to be involved in companies at such a crucial stage where the entrepreneurs have already established their business, and proven that they can do it, but are looking for some capital and help to take it to the next level. We get to be involved with some high calibre people, not just local champions but world champions in their particular niche.

I can't think of a more exciting place to be than exactly where we are at Bailador.

What is Bailador hoping to achieve of the next couple of years?
It's all about execution and it's the same for our underlying portfolio companies. We’re constantly scanning the horizon for trends and with things moving and changing so quickly, we want to make sure we execute well in the short term. For Bailador specifically, that means realizing the value in some of the investments we've made.

Bailador has 10 fantastic companies in our portfolio, with one of them heading for IPO next year. There could be a variety of cash realisation events across the portfolio during 2018.  We’re focusing on executing, to demonstrate that there is substantial upside above the valuations we’re holding these companies at, and paying some dividends to our investors. We’ve got our eyes firmly on the road in the next couple of years to achieve that.

How does Bailador’s investment approach differ from that of other VC funds?

Bailador are exclusively focused on the expansion stage, whereas some others might invest pre-revenue or at the very early stage, we believe that represents a different risk profile to the expansion stage where we get involved.

We also favour, primarily, business-to-business models. Business-to-consumer tends to have a different profile and they require a greater marketing investment and spend. Business-to-business models can be a bit less glamorous but the fundamental economics can be exceptionally attractive and bring a level of predictability and certainty that we find very attractive to invest in.

You’ve got an impressive investment background. How have your views changed over the years and what are some of the key lessons you've learned?
The importance of partnering with the right people has become an abundantly clear priority of mine. I would like to think that over the course of the last 20 years, my judgement on what makes the right partner to invest with has improved immensely.

I’ve had the opportunity to be involved with some fantastic successes and note the consistent characteristics across those. I've been fortunate enough to look at literally thousands of opportunities, some of which I invested in, most of which I didn't, then follow their successes and failures and use that real-world data to refine my own investment process.

Being actively involved on the board of companies like SiteMinder, Stackla and Straker, do you find a lot of the issues and learnings overlap?

Very much so. We are absolutely able to share the knowledge learned from one business to another. Sometimes that means literally sharing people who solve a particular problem.  Given that we’ve had our businesses expand into international markets on a number of occasions, many of the lessons are definitely transferable.

Is there a motto or mantra you live by?
It’s not a mantra I suppose, but I just try to be honest with people and treat them how I would like to be treated, regardless of position or reputation.  I think it's the right thing to do, but it has also led to all sorts of relationships established over a long period of time contributing in very positive and unexpected ways to what we are doing today at Bailador.

Summer is here and the word is you're a champion surf boater, will you be competing this summer and do you have any tips to be a surf boat pro?
It’s true that we've had some success with a couple of medals over the last couple of summers in surf boats for Bronte. If I could align it with investing, I would say that hard work and preparation give you the best chance of success, but it still helps to have a little luck when a wave breaks your way.