Rob Vickery, Managing Partner at Hillfarrance Venture Capital
A childhood fascination with dinosaurs that has morphed into a career enabling people with big ideas to change dinosaur industries and processes, we caught up with Rob Vickery, General Partner at Hillfarrance Venture Capital to hear about his journey into venture capital as well as his take on the New Zealand startup ecosystem.
Rob has spent the last decade living and working in Los Angeles before deciding to come and help supercharge kiwi entrepreneurs. Thanks for sharing your story, Rob.
How would you explain to a five year old what you do?
I give other people some help with making their wildest dreams come true.
“Ever since a very young age through to today, I have been obsessed with dinosaurs, which meant that I dreamt of being a paleontologist.”
And for the adults, what does a day-in-the-life of a Managing Partner at Hillfarrance Venture Capital look like?
My day is split between a number of standing agenda items and time that is reserved for reflection and strategic thinking. The standing items are; receiving pitches from founders and running due diligence; working with our portfolio companies on solving any tactical and strategic challenges and opportunities; syncing with our super-connector LPs (our investors); and the general day-to-day activities of running a multi-million dollar financial institution.
My reflection time is often spent thinking about how Hillfarrance can become the best source of capital for founders; researching new markets and verticals that we should be considering for future investment; writing content; and devising ways in which we can further develop the New Zealand entrepreneurial ecosystem.
“I came to New Zealand in 2019 and saw a market that was full of innovation and yet was starved of connected capital that could help a startup grow.”
What did you dream of doing when you were younger and how did you end up at founding Hillfarrance?
Ever since a very young age through to today, I have been obsessed with dinosaurs, which meant that I dreamt of being a paleontologist. I thought long and hard about what it would take to build a career in this regard and started studying some of the subjects to get me there but I came to a realisation that it was best left to being a hobby. I think this early fascination into discovering new things subconsciously led me into my VC career.
Hillfarrance is the culmination of almost a decade of working in the Californian startup venture capital market, where I founded and launched my first venture capital firm, Stage Venture Partners. Stage has progressed onto raising multiple funds and has invested in over 30 portfolio companies from across the globe since its inception and become a top global performing fund within other similar firms within it’s vintage year.
On a personal level, after living in Los Angeles for almost 10 years, I was keen to return to the Commonwealth to build a venture capital firm that reflected my personal and professional values when it comes to investing in exceptional people solving hard problems that matter.
I came to New Zealand in 2019 and saw a market that was full of innovation and yet was starved of connected capital that could help a startup grow. Hence, Hillfarrance was born to fill this need.
Can you tell us a little bit about Hillfarrance and what makes what you do unique to others in the space?
At its heart, Hillfarrance Venture Capital, is a fund that exists to serve it’s portfolio company founders with ego-free, transformative capital. Let’s break that apart a little bit. When we say we say we “serve our founders” we are referring to how our firm is structured and focused on providing connections, services and advice to our founders that will help them smash through their milestones and build a business that is sustainable, innovative and world-class.
“Ego-free” capital is testament to our mission to break-down the traditional ivory towers of venture capital firms and to make it easy for; founders to contact us and apply for funding; to demystify venture capital; and to democratise the fundraising process. We are also one of only three funds in the world to share the returns of our fund (our carried interest) with our founders, making them in turn investors in each other and able to contribute to everyone’s success.
Finally, we are the first venture capital fund in New Zealand to launch a venture scout programme, which provides resources and capital to connected and motivated individuals who want to start building a career as a VC.
We currently have twelve scouts across the country who are talking to founders that are just starting out on the startup journey and investing our capital on our behalf into companies that are outside of our usual focus and at an earlier stage than what we usually invest at. So far we have made four scout investments and expect to have over 50 scout companies by the end of 2024.
“For graduates, in the very least, they should look at startup experience as an equivalent to earning a PHD or a Masters in entrepreneurship. ”
What gets you excited about the New Zealand tech ecosystem and why should more people be considering it as a career path?
I have seen New Zealand’s entrepreneurial community and startup economy move into fifth gear in the last 18 months. Our strategy with handling COVID-19 has only amplified the excitement within our country and has caught the attention of many overseas investors. The Kiwis who are returning from living outside the country are coming back with new ideas and modes of thinking that are a breath of fresh air for Aotearoa New Zealand.
Kiwi founders are also starting to reveal what makes a New Zealand startup unique. Whether that be the holistic perspective from Māori founders who are building thousand year business models or entrepreneurs coming from our regions with new food-tech ideas, we are discovering we do not need to mimic Silicon Valley but are able to strike out on our own.
I think that anyone who has the opportunity to work within a startup should jump at the chance. There is no better way to experience and attain the skills of excelling under pressure, creative problem solving, sales excellence, and the confidence to lead others. For graduates, in the very least, they should look at startup experience as an equivalent to earning a PHD or a Masters in entrepreneurship.
“Finally, and perhaps a little bizarre for an investor to say, I am not especially interested in founders who are building a company with a primary goal of selling it via IPO or M&A.”
What are the key things you look for when investing in a company and how can that apply to people deciding where they might like to work?
As the companies we are investing in are often very early in our lifecycle, we focus on the founder and his/her maniacal obsession with the problem they are solving.
At a ten thousand feet level, I look for three big strategic things in a potential portfolio company founder:
Why You? I want to understand why you are the most credible and logical person(s) to build your company. What is your unique ‘superpower’ that will help catapult your company to meteoric success? If this question is not being answered satisfactorily it leads me to have concerns about the defensibility of your business model and your ability to attract the best talent to your team.
Why Now? Why is now the right time for your business to exist, TODAY? This is where we explore the nature of your business and its product(s) to understand why no one else has already built a similar concept. As we focus on startups that are at the frontiers of technology, this quickly distinguishes those that are building the “Uber for this” (i.e. something that is mimicking another company that was built over 10 years ago) from those who are building something that has not been seen in the world before.
Why Us? This question gets to the reason as to why we might be the best investor for you. I want to invest in entrepreneurs who are building businesses within markets or verticals that I understand and know well so that I can be useful and offer the transformative capital that we discussed previously.
At a ten feet level, I am excited to meet founders who show the following traits and characteristics:
The courage to ship a product that barely works. I admire people who are able to build an early product, which may not look beautiful but is innovative enough to deliver value to a customer who is willing to pay for it. The reverse of this are founders who have spent three years building what they think is a perfect product without even presenting it to a customer to understand if it is truly what they want.
The ability to convince exceptional people to join their team. To attract people with remarkable CV’s to come and help you realise your company vision, often at a salary than is much lower than the market rate, is a rare skill and testament to the persuasion skills of the founder.
The ability to sell a product to a paying customer at a logical price. All too often Founders underprice or offer their MVP’s for free to gain traction, however if a product or service offers real value to a customer they should be willing to pay a healthy, margin-earning premium for it. I seek out founders who have the enough conviction behind their product that they are willing to charge a fair price for it.
Finally, and perhaps a little bizarre for an investor to say, I am not especially interested in founders who are building a company with a primary goal of selling it via IPO or M&A. In my experience, the best founders are those who are more focused on building a team to solve a set of problems not those who are doing something to get rich. Getting rich in the process is a happy byproduct for the types of founders that I like to fund.
Lastly, why should our brightest talent be looking towards our startup ecosystem instead of the more trodden corporate path?
I have walked both the corporate and startup path and the value of the latter over the former is almost incomprehensible. The ability to have a level of autonomy to make decisions that directly determine the future of a business is invaluable, unique and life-changing.
Corporate roles certainly teach you about internal politics and how big businesses make decisions (a vital lesson if you want to build a startup that sells to them), both of which are valuable lessons. However, working as a small cog in a giant machine can mean that the end value of your input may not be easily determinable and, as a result, be demotivating.
If you are at the beginning of your career and have an eye on building your own startup, my recommendation is that you gain a couple of years in a major corporate to learn the vital skills and build a financial nest egg that will cushion you in the early years of your business. If this still is not a good fit for you then go and join or build a startup but make sure they it is capitalised enough to pay you for at least 12 months.