Investing in Mutinex has been a joyful, 19 month journey since first meeting Henry, Matt and the team. Mutinex is a tier 1 company with all the hallmarks of a generational early-stage technology business.
Take that as read. After all, Mutinex is one of the 7 investments we made in FY23 out of some thousands of opportunities we reviewed. Whilst we could detail a myriad reasons why we chose to invest, these all pale in consequence when compared to the unique process and relationship that EVP has built with the business. So, to save you from another breathless write up from an excitable investor about their take on the future (and in the spirit of transparency), instead I thought I’d share a few “inside baseball moments” from our investment process over the last 18 months.
Meeting Mutinex
- I “stole” the tip from Matt de Boer. Matt and Lach Keefe were visiting Charlie Gearside (founder of EUC) at their offices and Charlie mentioned a few prospective startups he was tracking closely. Matt shared the list with me and I just reached out to the founders via LinkedIn. Anyone that Charlie recommends deserves a cold outreach… Cold outreach continues to be my best performing origination channel. It took Henry around 3 mins to call me back.
- The pitch was slick. But truthfully, Henry’s passion was a little unnerving. When he called me at 6am three Saturday mornings in a row, I was unsure if this was someone I could work with or not. Seeing Henry and Matt build the organisation over the year and a half, and listening to the team’s feedback on their leaders, convinced us that this was a business we simply had to work with. Henry’s charisma and style is 100% genuine. Complete commitment to the cause. Unwavering ambition, and absolute conviction as to where the company is heading.
Team, Customer and Market signals amplify diligence
Investing in early stage technology companies is as much about searching for leading signals as it is looking at historical data, or playing futurist. The leading signal with Mutinex was clearly “bench strength” and quality of team. It is a signal that I have learned to pay far closer attention to before making an investment. By spending meaningful time with the people employed at prospective companies, we effectively 10x our due diligence capability, not just by volume, but often by quality as well.
For example, if a company is able to easily attract development talent, it is likely a strong signal that the product/tech is novel and innovative. If it is easy to hire AE’s, then it is likely that an incoming salesperson either believes they can hit their quota or has heard in market that other sales reps are likely to “make bank”. Strong c-suite hires perform their own rigorous diligence before betting their career on a change. We would be silly not to leverage the work they have already done and to incorporate it into our frameworks. A recent c-suite hire at one of our companies spoke to over 30 independent references, met dozens of team members, pre-sold the product multiple times and performed exhaustive financial diligence before joining. All akin to the work EVP performs, but from a different and arguably more considered perspective. After all, a decision to change employers is likely more consequential than a decision by EVP to add company number 46 to the portfolio.
For Mutinex, the team related signals were genuinely breaking the scales. Henry and Matt are not only exceptional in their own rights, but they have added exceptional people, all of whom have taken the leap of faith to join Mutinex, despite the risk profile that comes with any early stage venture. This was one of those special investments driven by the quality of the team and their execution rather than an overworked thesis on the future of marketing. We found comfort from insiders smarter than us, who validated that the problem was real and that the business was pointed in the right direction.
Closing the Transaction
- During our IC process (think 16 people in a room) Henry (think wearing boardies and thongs) turned to a poor, unsuspecting EVP staff member and bellowed into his face, “look into the whites of my eyes and see if I’m here to f$&% around”. True story. The crisp diction of the swear word lingered for an eternity! From memory the question was simply around market size…
- Allen went spear fishing with Henry as part of DD. Not sure who was testing who at this point. AZ was clearly a little shaken, and very bloody sunburnt after the ordeal.
- Mutinex had originally tried to raise a competitive round. Most funds liked the business, but wanted to see more customer validation. Including EVP. See Henry’s excellent review here. This time around, there wasn’t another fund at the table. Both sides had formed the view that a partnership approach (and landing on a fair valuation) was the best way forward, with the company sacrificing the chance for a Dutch auction and maximum pricing for the benefit of speed and a known partner. We now have to live up to the promises we made to the team and Board. An obligation we don’t take lightly. Non-competitive, proprietary deals have always been our best performers.
- The old framework of “cake-level engagement” from our Hnry investment was applied in full force with the Mutinex diligence process. Customers and industry insiders we spoke to gave us the same smoke signals to suggest the product was genuinely reshaping their day to day function. When we heard a customer talk about the idea of gifts for the Mutinex team, diligence was complete…
- Momentum is just as important in fundraising as it is part of early stage company building. I’ve spoken to Hen every day since September. I think we took a break the first week of Jan, but we chat daily, normally around 7pm. Hen speaks to Allen every day too. Normally Allen gives me the heads up as to what Hen’s thinking about so I can craft a thoughtful response to the issue of the day. Thanks AZ.
Henry is a masterful communicator. Building trust, comms and momentum with your target (Allen and I) is a real thing. And momentum in an early stage company is everything. This type of over communication, while confronting at first, speaks to a level of operational intensity and pace that is needed to build a world class business.
- On that topic of momentum: industry tailwinds continue to be the strongest predictor of success for our investments. At EVP we have developed a range of heuristics and signals that have become markers of our best investments. The notion of “industry insiders”. “Mission critical” software solutions. Amongst others. But market trends towards particular solutions or in a specific direction can be immovable, powerful forces. MUCH better to be playing with the wind. This continues to be a personal formula for allocation decisions and with Mutinex the tailwinds are clear: Any marketing organisation without a data-led approach to their channel mix decisions is being left behind.
- We have been flexible where needed. The company has received multiple term sheets from a range of funds over the past year or so. Often the parties have been divergent over immaterial concepts and/or trivial numbers. This has been our good fortune. To get a deal done with a business that is this “hot” without them chatting to a potential VC competitor, one needs to be flexible on structure, investment amounts, valuation (within reason) and terms. It is always surprising to see an investor lose a deal over a technicality with a company that has grown by 50% during the period in which the negotiation is taking place…
- Oh, and when we signed in wet ink, in front of the Mutinex team at the EVP offices (very fun), we then shredded the pages and loaded the agreements into Docusign.
There were dozens of reasons why we invested in Mutinex, from their customer affinity, their metrics, the tailwinds behind the proposition, the wide open market opportunity, amongst many others. But it was ultimately the trust and conviction we have built via the strength of relationship with Henry and Matt that led to: why we invested in Mutinex.
Investing in Mutinex has been a joyful, 19 month journey since first meeting Henry, Matt and the team. Mutinex is a tier 1 company with all the hallmarks of a generational early-stage technology business.
Take that as read. After all, Mutinex is one of the 7 investments we made in FY23 out of some thousands of opportunities we reviewed. Whilst we could detail a myriad reasons why we chose to invest, these all pale in consequence when compared to the unique process and relationship that EVP has built with the business. So, to save you from another breathless write up from an excitable investor about their take on the future (and in the spirit of transparency), instead I thought I’d share a few “inside baseball moments” from our investment process over the last 18 months.
Meeting Mutinex
- I “stole” the tip from Matt de Boer. Matt and Lach Keefe were visiting Charlie Gearside (founder of EUC) at their offices and Charlie mentioned a few prospective startups he was tracking closely. Matt shared the list with me and I just reached out to the founders via LinkedIn. Anyone that Charlie recommends deserves a cold outreach… Cold outreach continues to be my best performing origination channel. It took Henry around 3 mins to call me back.
- The pitch was slick. But truthfully, Henry’s passion was a little unnerving. When he called me at 6am three Saturday mornings in a row, I was unsure if this was someone I could work with or not. Seeing Henry and Matt build the organisation over the year and a half, and listening to the team’s feedback on their leaders, convinced us that this was a business we simply had to work with. Henry’s charisma and style is 100% genuine. Complete commitment to the cause. Unwavering ambition, and absolute conviction as to where the company is heading.
Team, Customer and Market signals amplify diligence
Investing in early stage technology companies is as much about searching for leading signals as it is looking at historical data, or playing futurist. The leading signal with Mutinex was clearly “bench strength” and quality of team. It is a signal that I have learned to pay far closer attention to before making an investment. By spending meaningful time with the people employed at prospective companies, we effectively 10x our due diligence capability, not just by volume, but often by quality as well.
For example, if a company is able to easily attract development talent, it is likely a strong signal that the product/tech is novel and innovative. If it is easy to hire AE’s, then it is likely that an incoming salesperson either believes they can hit their quota or has heard in market that other sales reps are likely to “make bank”. Strong c-suite hires perform their own rigorous diligence before betting their career on a change. We would be silly not to leverage the work they have already done and to incorporate it into our frameworks. A recent c-suite hire at one of our companies spoke to over 30 independent references, met dozens of team members, pre-sold the product multiple times and performed exhaustive financial diligence before joining. All akin to the work EVP performs, but from a different and arguably more considered perspective. After all, a decision to change employers is likely more consequential than a decision by EVP to add company number 46 to the portfolio.
For Mutinex, the team related signals were genuinely breaking the scales. Henry and Matt are not only exceptional in their own rights, but they have added exceptional people, all of whom have taken the leap of faith to join Mutinex, despite the risk profile that comes with any early stage venture. This was one of those special investments driven by the quality of the team and their execution rather than an overworked thesis on the future of marketing. We found comfort from insiders smarter than us, who validated that the problem was real and that the business was pointed in the right direction.
Closing the Transaction
- During our IC process (think 16 people in a room) Henry (think wearing boardies and thongs) turned to a poor, unsuspecting EVP staff member and bellowed into his face, “look into the whites of my eyes and see if I’m here to f$&% around”. True story. The crisp diction of the swear word lingered for an eternity! From memory the question was simply around market size…
- Allen went spear fishing with Henry as part of DD. Not sure who was testing who at this point. AZ was clearly a little shaken, and very bloody sunburnt after the ordeal.
- Mutinex had originally tried to raise a competitive round. Most funds liked the business, but wanted to see more customer validation. Including EVP. See Henry’s excellent review here. This time around, there wasn’t another fund at the table. Both sides had formed the view that a partnership approach (and landing on a fair valuation) was the best way forward, with the company sacrificing the chance for a Dutch auction and maximum pricing for the benefit of speed and a known partner. We now have to live up to the promises we made to the team and Board. An obligation we don’t take lightly. Non-competitive, proprietary deals have always been our best performers.
- The old framework of “cake-level engagement” from our Hnry investment was applied in full force with the Mutinex diligence process. Customers and industry insiders we spoke to gave us the same smoke signals to suggest the product was genuinely reshaping their day to day function. When we heard a customer talk about the idea of gifts for the Mutinex team, diligence was complete…
- Momentum is just as important in fundraising as it is part of early stage company building. I’ve spoken to Hen every day since September. I think we took a break the first week of Jan, but we chat daily, normally around 7pm. Hen speaks to Allen every day too. Normally Allen gives me the heads up as to what Hen’s thinking about so I can craft a thoughtful response to the issue of the day. Thanks AZ.
Henry is a masterful communicator. Building trust, comms and momentum with your target (Allen and I) is a real thing. And momentum in an early stage company is everything. This type of over communication, while confronting at first, speaks to a level of operational intensity and pace that is needed to build a world class business.
- On that topic of momentum: industry tailwinds continue to be the strongest predictor of success for our investments. At EVP we have developed a range of heuristics and signals that have become markers of our best investments. The notion of “industry insiders”. “Mission critical” software solutions. Amongst others. But market trends towards particular solutions or in a specific direction can be immovable, powerful forces. MUCH better to be playing with the wind. This continues to be a personal formula for allocation decisions and with Mutinex the tailwinds are clear: Any marketing organisation without a data-led approach to their channel mix decisions is being left behind.
- We have been flexible where needed. The company has received multiple term sheets from a range of funds over the past year or so. Often the parties have been divergent over immaterial concepts and/or trivial numbers. This has been our good fortune. To get a deal done with a business that is this “hot” without them chatting to a potential VC competitor, one needs to be flexible on structure, investment amounts, valuation (within reason) and terms. It is always surprising to see an investor lose a deal over a technicality with a company that has grown by 50% during the period in which the negotiation is taking place…
- Oh, and when we signed in wet ink, in front of the Mutinex team at the EVP offices (very fun), we then shredded the pages and loaded the agreements into Docusign.
There were dozens of reasons why we invested in Mutinex, from their customer affinity, their metrics, the tailwinds behind the proposition, the wide open market opportunity, amongst many others. But it was ultimately the trust and conviction we have built via the strength of relationship with Henry and Matt that led to: why we invested in Mutinex.