1 00:00:05,300 --> 00:00:08,700 Hello and welcome to the first ever Sherbrooke podcast. 2 00:00:09,200 --> 00:00:12,300 I am your host, Nicholas, never Ling, the editor of Real Deals 3 00:00:12,300 --> 00:00:15,200 magazine. And on today's program, we will 4 00:00:15,200 --> 00:00:20,100 be talking European Venture debt at first glance taking on debt, 5 00:00:20,100 --> 00:00:22,900 may seem like an odd thing for startups that are cash, flow 6 00:00:22,900 --> 00:00:26,200 negative to consider. But the creation of a venture 7 00:00:26,200 --> 00:00:30,600 debt Community has been identified as a crucial Tone of 8 00:00:30,600 --> 00:00:35,400 any thriving startup ecosystem. Indeed in her eponymous and 9 00:00:35,400 --> 00:00:39,200 landmark study on the state of the UK startup scene serial 10 00:00:39,200 --> 00:00:42,900 entrepreneur chirico to listed the creation of a thriving 11 00:00:42,900 --> 00:00:46,900 Venture debt Market as a key enabler of Rapid company growth, 12 00:00:47,600 --> 00:00:50,800 the numbers, tell the story in the established u.s. 13 00:00:50,800 --> 00:00:54,100 Venture market around a fifth of us companies, take on Venture 14 00:00:54,100 --> 00:00:58,100 debt in the UK, the figures less than 10%. 15 00:00:58,800 --> 00:01:02,000 To help understand how ventured it supports companies in scale 16 00:01:02,000 --> 00:01:05,400 up mode and dig into why sponsors and Entrepreneurship, 17 00:01:05,400 --> 00:01:09,400 seriously consider taking it on. I'm joined by two guests. 18 00:01:10,400 --> 00:01:13,200 Will Chapel is the head of growth capital and Venture AT 19 00:01:13,200 --> 00:01:16,500 schulberg bank and as Finance growth in technology businesses 20 00:01:16,500 --> 00:01:19,200 for more than a decade. He was one of the founding 21 00:01:19,200 --> 00:01:23,200 members of the Barclays Venture debt team later joining HSBC, as 22 00:01:23,200 --> 00:01:25,700 a director and Lead Banker in the bank's technology. 23 00:01:25,700 --> 00:01:30,300 Team Chapel has overseen a number of Deals and provided 24 00:01:30,300 --> 00:01:33,400 Finance for the likes of Music. Discovery platform Shazam. 25 00:01:33,800 --> 00:01:37,800 Apartment rental provider, one find stay and more recently data 26 00:01:37,800 --> 00:01:40,800 firm. Do you do well Chapel, you have 27 00:01:40,800 --> 00:01:43,500 been in the Venture dead Market from pretty much the beginning. 28 00:01:43,500 --> 00:01:45,700 What would you say are the biggest changes to the market? 29 00:01:45,700 --> 00:01:48,100 You have observed over the last 10 years. 30 00:01:48,300 --> 00:01:51,000 Good question. I think I'm pretty start with 31 00:01:51,000 --> 00:01:53,200 the fact that there's more competition than there was. 32 00:01:53,200 --> 00:01:56,400 Certainly a few years ago, which only shows the fact of the 33 00:01:56,400 --> 00:02:00,700 market has expanded and grown Alongside that we probably up 34 00:02:00,700 --> 00:02:04,600 greater amounts of funding the amount of interest in certainly 35 00:02:05,000 --> 00:02:08,000 things areas such as software as a service technology as a whole 36 00:02:08,000 --> 00:02:10,000 has meant that. There's been a few more bidding 37 00:02:10,000 --> 00:02:12,100 wars than maybe there were a few years ago. 38 00:02:12,700 --> 00:02:15,000 And pricing ultimately is coming a little as well. 39 00:02:15,000 --> 00:02:17,200 So it's a little bit cheaper to get Venture debt. 40 00:02:17,200 --> 00:02:21,400 Not saying it's cheap but it is cheaper and perhaps a little 41 00:02:21,400 --> 00:02:24,200 less warrant Reliant and weren't driven as well. 42 00:02:24,600 --> 00:02:28,200 So there are a few more creative organizations in the market that 43 00:02:28,200 --> 00:02:30,700 are At it from maybe a different angle which I'm sure we can 44 00:02:30,700 --> 00:02:35,500 explore later on CFOs and Venture Capital firms in 45 00:02:35,500 --> 00:02:37,300 general. The now exploring this is an 46 00:02:37,308 --> 00:02:40,500 option that the funding round as opposed to venture debt 47 00:02:40,500 --> 00:02:43,000 potentially being really discussed as a, you know, as a 48 00:02:43,000 --> 00:02:47,200 sort of bridging bridging facility and I think ultimately 49 00:02:47,500 --> 00:02:50,400 as a product it's matured to attract. 50 00:02:50,400 --> 00:02:53,900 Also clearinghouses, who are now obviously opening Venture debt 51 00:02:53,900 --> 00:02:55,600 products and launching from there. 52 00:02:55,600 --> 00:02:58,700 So I think, you know, I think from a market perspective Last 53 00:02:58,700 --> 00:03:00,800 few years, some of the last ten years, the landscape has changed 54 00:03:00,800 --> 00:03:03,000 dramatically. It's a, it's a, it's a 55 00:03:03,000 --> 00:03:05,500 recognized products. Now, not just the sort of Niche 56 00:03:05,500 --> 00:03:09,100 offering, and I think from a comparison back then, when it 57 00:03:09,100 --> 00:03:12,600 was mainly a sort of American Products, it's very much UK 58 00:03:12,600 --> 00:03:14,100 Centre now. Okay, great. 59 00:03:14,100 --> 00:03:16,300 Well, thank you, a really good overview and I think, plenty, 60 00:03:16,300 --> 00:03:19,900 that will jump onto later. I'm also joined by Josh Hawkins, 61 00:03:19,900 --> 00:03:22,300 who's a partner too, often a schvitz with specialist 62 00:03:22,300 --> 00:03:24,900 expertise. In Venture Capital Giles has 63 00:03:24,900 --> 00:03:26,900 worked on a number of intracapsular and Venture debt 64 00:03:26,900 --> 00:03:28,500 deals and his Client List includes. 65 00:03:28,600 --> 00:03:32,600 Is the likes of local Globe, Mobius, Motors Cleo and Capone. 66 00:03:32,600 --> 00:03:34,900 Yo, among many others. You will have a, you know, very 67 00:03:34,900 --> 00:03:37,100 detailed overview of the Venture debt scene. 68 00:03:37,600 --> 00:03:39,900 And you know how many credible players would you say are now 69 00:03:39,900 --> 00:03:44,300 established in the space who are they, and is there room for four 70 00:03:44,300 --> 00:03:46,700 more providers to come in? I know if you look at the UK 71 00:03:46,700 --> 00:03:49,500 Market, there's only really handle of lenders. 72 00:03:50,200 --> 00:03:52,100 Historically you know, that they were the big to which were 73 00:03:52,100 --> 00:03:55,500 Silicon Valley Bank and grills capital and going way back when 74 00:03:55,500 --> 00:03:59,100 yeah, there's ETV and Noble who've seen Since dropped out of 75 00:03:59,108 --> 00:04:03,200 the market. But as we mentioned, the market 76 00:04:03,200 --> 00:04:07,600 has matured and there are several other funds and banks of 77 00:04:07,600 --> 00:04:10,000 intend to Market. So, as well as they can make 78 00:04:10,000 --> 00:04:14,400 bank and cross, you have now have a designated funds, like 79 00:04:14,500 --> 00:04:18,500 Colombia Lake, frog, boost, and then some banks, like yeah, like 80 00:04:18,500 --> 00:04:21,700 Sherbrooke itself Clydesdale and yeah, what I can gather 81 00:04:21,700 --> 00:04:24,400 listening to the market. Other other people are looking 82 00:04:24,400 --> 00:04:27,200 to internet entering the market on top of that, then you have 83 00:04:27,200 --> 00:04:30,000 u.s. providers. Like Triple point or Hercules 84 00:04:30,000 --> 00:04:34,000 who dabble in the UK, their remit is pretty narrow. 85 00:04:34,200 --> 00:04:36,200 So there's a limit to what they can actually do in the UK and 86 00:04:36,200 --> 00:04:39,400 also, you know, the us such a big Market that the summer, when 87 00:04:39,400 --> 00:04:41,900 it's so much low-hanging fruit there, then why my command of 88 00:04:41,900 --> 00:04:43,500 honed? And we had true trying to look 89 00:04:43,500 --> 00:04:46,800 at the UK Market. What will be interesting is 90 00:04:47,000 --> 00:04:49,200 looking at develops in the u.s. you've got some clear blue 91 00:04:49,200 --> 00:04:53,200 Ventures which is even more short-term debt a bit more like 92 00:04:53,200 --> 00:04:55,600 discount factoring. It'd be interesting to see what 93 00:04:55,600 --> 00:04:57,200 they do in the UK Market of anything. 94 00:04:57,500 --> 00:04:59,400 Okay. I was really interesting and 95 00:04:59,400 --> 00:05:02,000 clearly this is this is a market that is that is thriving and 96 00:05:02,000 --> 00:05:04,600 growing really quickly, what we've had the overview and I 97 00:05:04,600 --> 00:05:08,100 think we've set the scene, but the first question I really 98 00:05:08,100 --> 00:05:13,100 wanted to dig into in more detail is how exactly taking on 99 00:05:13,100 --> 00:05:17,700 debt can can benefit a start-up, I suppose, my assumption would 100 00:05:17,700 --> 00:05:20,900 be that that sponsors and entrepreneurs wouldn't really 101 00:05:20,900 --> 00:05:23,100 want to worry about, you know, servicing debt. 102 00:05:23,100 --> 00:05:26,500 When the focus is on marketing, developing technology, grain 103 00:05:26,500 --> 00:05:30,100 market, share green teams, Etc Giles. 104 00:05:30,500 --> 00:05:34,200 Perhaps if I can put this one to you, what can a company that has 105 00:05:34,200 --> 00:05:37,000 taken on its first series? A do with Venture debt? 106 00:05:37,000 --> 00:05:39,900 That that maybe it couldn't do. If it didn't take on this 107 00:05:39,900 --> 00:05:45,400 financing, a good question and I think the first thing to say is 108 00:05:45,500 --> 00:05:46,800 just like Venture Capital Venture. 109 00:05:46,800 --> 00:05:49,600 Debt isn't very company and just like Venture Capital. 110 00:05:49,600 --> 00:05:53,900 There are risks and drawbacks on taking on benched at that said, 111 00:05:54,000 --> 00:05:58,000 the internet can has some real advantages and used alongside 112 00:05:58,000 --> 00:06:00,900 venture Really accelerated company's growth with minimal 113 00:06:00,900 --> 00:06:04,300 did dilution to to ownership. So when you look at sort of how 114 00:06:04,300 --> 00:06:06,400 can we say using it and how they can really accelerate their 115 00:06:06,400 --> 00:06:10,000 growth, yeah that they're using Venture debts to supposed to 116 00:06:10,008 --> 00:06:13,800 taking Equity from but feces they are growing their rounds or 117 00:06:13,800 --> 00:06:17,400 increasing their rounds getting more money in using that debt to 118 00:06:17,400 --> 00:06:20,100 then really accelerate growth. But again take a minimal minimal 119 00:06:20,100 --> 00:06:24,000 delusion we're also seeing companies which will take on 120 00:06:24,000 --> 00:06:26,700 debt in order to extend the runway that so they're looking 121 00:06:26,700 --> 00:06:29,000 to hit some Milestones. They want to Kris value. 122 00:06:29,000 --> 00:06:31,300 But then, at that point in time, now that doesn't make sense to 123 00:06:31,308 --> 00:06:35,400 take Equity make sense to take that, prove the valuation and 124 00:06:35,400 --> 00:06:38,100 then go out and raise money at a far greater valuation, but what 125 00:06:38,100 --> 00:06:40,900 you don't see with ventured out. Yeah, it's not a product where 126 00:06:41,000 --> 00:06:44,100 the company is at risk or in difficulties. 127 00:06:44,100 --> 00:06:45,500 That's not a good time to take the internet. 128 00:06:45,500 --> 00:06:48,900 It really is there to complement and accelerate Venture Capital. 129 00:06:48,900 --> 00:06:52,200 The other thing that is interesting with ventured out, 130 00:06:52,200 --> 00:06:56,200 is it enhances investor returns. Why a lot of VCS, like using 131 00:06:56,200 --> 00:06:58,400 Venture debt is the fact that yeah, forever. 132 00:06:58,600 --> 00:07:00,400 And they put in the next fifteen percent. 133 00:07:00,800 --> 00:07:04,600 Now if that putting a pound in through Venture debt, that 134 00:07:04,600 --> 00:07:06,800 doesn't impact their their solution that doesn't impact 135 00:07:06,800 --> 00:07:09,100 their ownership. To the end of the day, they only 136 00:07:09,100 --> 00:07:13,700 make money when the committee of sold or IPO, and they can 137 00:07:13,700 --> 00:07:16,100 accelerate the kind of growth, it can grow a company far 138 00:07:16,100 --> 00:07:20,400 quicker, far easier at no impact, all the on their dollar, 139 00:07:20,800 --> 00:07:23,000 which is, you know, it really enhances their returns roll. 140 00:07:23,300 --> 00:07:25,200 Some really interesting points as Charles mentioned there, what 141 00:07:25,200 --> 00:07:27,600 is your take? If, you know, when you get that? 142 00:07:27,600 --> 00:07:31,100 That question and And what do you sense that your clients are 143 00:07:31,600 --> 00:07:34,000 wanting from from the product Union and service? 144 00:07:34,000 --> 00:07:36,300 You're providing technical support, jobs is points. 145 00:07:36,300 --> 00:07:39,400 There a spot on, I think just to quickly reiterate. 146 00:07:39,400 --> 00:07:42,300 So few, those bullet points, I guess that I'll sort of expand 147 00:07:42,300 --> 00:07:44,800 on, non dilution of shareholding. 148 00:07:45,500 --> 00:07:48,800 Will ultimately create a more ultimately create more control 149 00:07:48,800 --> 00:07:51,800 for the entrepreneur. Obviously, the extra cash Runway 150 00:07:52,200 --> 00:07:54,200 is something that can really benefit. 151 00:07:54,200 --> 00:07:57,300 It's also having an extra Finance partner companies taking 152 00:07:57,300 --> 00:08:00,100 deaths at an earlier stage. Certainly, that is the norm in 153 00:08:00,100 --> 00:08:01,600 the market. We know relatively speaking 154 00:08:01,600 --> 00:08:05,300 versus clearinghouses and corporate loans shows 155 00:08:05,300 --> 00:08:07,200 discipline. It shows a real statement to the 156 00:08:07,200 --> 00:08:09,400 market. If you are a fast growing 157 00:08:09,400 --> 00:08:12,100 company and you go out to Market and say look, we've also raised 158 00:08:12,100 --> 00:08:14,800 debt. It really makes people look. 159 00:08:15,100 --> 00:08:17,700 I think it's key. Also, to note, that Venture debt 160 00:08:17,700 --> 00:08:20,100 isn't for everyone, as Giles said, but the key sort of 161 00:08:20,100 --> 00:08:23,000 parameters around that I think are, it doesn't suit startups. 162 00:08:23,000 --> 00:08:25,100 It doesn't suit pre-revenue companies. 163 00:08:25,400 --> 00:08:27,800 And death in itself, still has to be repaid. 164 00:08:28,500 --> 00:08:31,700 I'm a venture debt partner alongside a venture capital 165 00:08:31,700 --> 00:08:34,900 provider creates a sort of bit more of a hand holding approach. 166 00:08:34,900 --> 00:08:37,500 If there is a problem, we got more people to whilst it could 167 00:08:37,500 --> 00:08:40,799 be more complicated to think of why we got so many people 168 00:08:40,799 --> 00:08:45,200 involved actually an extra angle can often be very, very handy 169 00:08:45,500 --> 00:08:48,800 and from a VC point of view, I think often instead of having to 170 00:08:48,808 --> 00:08:51,000 maybe share the burden with another Equity provider, having 171 00:08:51,000 --> 00:08:55,300 a, having a debt provider could unlock more money later on. 172 00:08:55,900 --> 00:09:00,000 I think, I think also ensuring The market understands that 173 00:09:00,000 --> 00:09:04,100 Venture debt is not a bridge, whilst it could be thought of as 174 00:09:04,100 --> 00:09:07,500 something that gets you from A, to, B quicker, which it is, it's 175 00:09:07,500 --> 00:09:10,500 not as Giles into that. It's not a, it's not something 176 00:09:10,500 --> 00:09:13,100 to come in when the company's potentially having a difficult 177 00:09:13,100 --> 00:09:16,800 time because ultimately, the last thing you want, when you're 178 00:09:16,800 --> 00:09:19,400 struggling, is to find that, you've got another person who 179 00:09:19,400 --> 00:09:23,800 may be lending or investing this, a need that money back. 180 00:09:23,800 --> 00:09:27,500 So, I think key is, if it's, if it's used correctly, it can be 181 00:09:27,500 --> 00:09:32,600 extremely Beneficial and lending alongside investors is the key 182 00:09:32,600 --> 00:09:35,800 sort of parameter jars. How important then is the 183 00:09:35,800 --> 00:09:40,700 sponsor as the, I guess the deciding factor, that that, that 184 00:09:40,700 --> 00:09:43,900 would get the lenders on board. And also is this effectively is 185 00:09:43,900 --> 00:09:47,800 the series, a sort of The Benchmark for when a company can 186 00:09:47,800 --> 00:09:52,300 start looking at taking on the product doing this. 187 00:09:52,300 --> 00:09:53,500 Second, part of a question, that's all. 188 00:09:53,500 --> 00:09:57,800 First is series, a The Benchmark and then stuff is pretty know. 189 00:09:58,500 --> 00:10:01,700 So, you know, sort of Silicon Valley Bank doubled at one stage 190 00:10:01,700 --> 00:10:04,600 with a seed product, so you know, perform an institution 191 00:10:04,600 --> 00:10:06,400 around, some cake. Some companies won't be ready 192 00:10:06,400 --> 00:10:09,100 for Venture debt and series, a sum becomes may not be ready for 193 00:10:09,100 --> 00:10:12,800 Senate adjourn until Thursday. So you see so really comes down 194 00:10:12,800 --> 00:10:16,900 to the company itself. Its growth trajectory its plans, 195 00:10:16,900 --> 00:10:20,200 its business model as to whether it makes sense to leverage it or 196 00:10:20,200 --> 00:10:24,800 not looking at as to doesn't matter who the sponsor is, who 197 00:10:24,800 --> 00:10:27,700 the investor is. Yes, it's very important. 198 00:10:28,400 --> 00:10:30,400 Certain. Yeah, I mentioned earlier about 199 00:10:30,400 --> 00:10:34,000 some us funds, so u.s. men like triple points its remit is that 200 00:10:34,000 --> 00:10:37,700 if it goes into Europe it can only invest in Venture backed 201 00:10:37,700 --> 00:10:41,300 companies within a certain band. So looking at the the indexes, 202 00:10:41,300 --> 00:10:45,100 the axles, the world, it wouldn't be able to lend to any 203 00:10:45,100 --> 00:10:48,100 is or a small seed fund and I'm sure we're well for a risk 204 00:10:48,100 --> 00:10:50,000 profile when he's looking to company. 205 00:10:50,200 --> 00:10:53,400 If there are some top tier of UCS, it changes, the mr. 206 00:10:53,400 --> 00:10:57,200 Mannix they've done the DD, they are investment professionals, 207 00:10:57,400 --> 00:11:00,600 they know the market, They've done the investment that lawyers 208 00:11:00,600 --> 00:11:02,900 have been all over its, they've done the commercial DD and that 209 00:11:02,900 --> 00:11:06,100 changes the risk profile quite dramatically, which means that 210 00:11:06,100 --> 00:11:09,400 sort of any debt provider, some knows that opportunity. 211 00:11:09,500 --> 00:11:12,500 Exhale have done that work. They know what they're doing and 212 00:11:12,500 --> 00:11:14,500 yes, I could do my own ddiweddar get comfortable. 213 00:11:14,500 --> 00:11:18,200 I'll get this to a risk but we can actually piggyback off the 214 00:11:18,200 --> 00:11:23,100 work and the commitment that a top-tier fun has made really 215 00:11:23,100 --> 00:11:25,200 interesting Johnson will is a lender's. 216 00:11:25,600 --> 00:11:28,400 How do you, you know, what sort of parameters? 217 00:11:28,600 --> 00:11:33,500 You sit with respect to what round the financing or what 218 00:11:33,500 --> 00:11:38,100 round that the company is in and also how important is the 219 00:11:38,100 --> 00:11:42,700 sponsor in your decision on whether to to do a lend or not. 220 00:11:42,900 --> 00:11:47,200 So around the sponsor a lot of organizations in this market 221 00:11:47,200 --> 00:11:53,200 have a sort of whitelist or a panel of feces or sponsors that 222 00:11:53,400 --> 00:11:56,300 they will lend alongside we here at Sherbrooke. 223 00:11:56,300 --> 00:11:59,300 Have a policy where we look at every deal and Its own Merit 224 00:11:59,300 --> 00:12:02,300 that said we don't necessarily go with every single 225 00:12:02,500 --> 00:12:04,100 transaction. We look at from a sponsor 226 00:12:04,100 --> 00:12:05,500 perspective. We need to get comfortable with 227 00:12:05,500 --> 00:12:08,300 that sponsor and the, I guess, the approach that they're taking 228 00:12:08,300 --> 00:12:11,800 with the business. I think when it comes down to 229 00:12:12,500 --> 00:12:14,800 looking at that a lot of its really, how long does this 230 00:12:15,000 --> 00:12:17,500 sponsor or investor want to be part of the Journey of this 231 00:12:17,500 --> 00:12:19,400 business? Are they looking to get out of 232 00:12:19,408 --> 00:12:21,300 the next round? What we want is to lend 233 00:12:21,300 --> 00:12:23,800 alongside people that are in it for the long run. 234 00:12:23,800 --> 00:12:26,600 We need to be able to if there's a problem be able to find them 235 00:12:26,600 --> 00:12:29,300 up and say is everything, okay? Just like the For now I would 236 00:12:29,600 --> 00:12:33,200 would one would expect wish to phone up a VC or a p house 237 00:12:33,200 --> 00:12:35,900 that's investing in them to ensure that they're aware of 238 00:12:35,900 --> 00:12:38,500 any, you know, potential, a choppy water down the road. 239 00:12:38,600 --> 00:12:41,300 So it's very important to ensure that there is an understanding I 240 00:12:41,308 --> 00:12:44,100 think between sponsor and lender just like there is between 241 00:12:44,100 --> 00:12:49,200 sponsor and borrow so investee. So I think it's, you know, I'm 242 00:12:49,200 --> 00:12:51,300 happy to come to sort of things like, the structure of what we 243 00:12:51,300 --> 00:12:53,400 would do and how we would do it shortly as well. 244 00:12:53,400 --> 00:12:55,000 Yeah, well I think let's move on to that. 245 00:12:55,000 --> 00:12:58,400 I'm, you know, I suppose we've we've gone through how start, 246 00:12:58,500 --> 00:13:02,000 Sup can benefits and we've just touched on the points about 247 00:13:02,000 --> 00:13:04,500 structure their will. So, you know, as a lender, how 248 00:13:04,500 --> 00:13:07,700 do you get comfortable with with lending to a business that may 249 00:13:07,700 --> 00:13:11,000 not be profitable yet and you know, how are you structuring 250 00:13:11,000 --> 00:13:14,700 your loans? And maybe a bit more detail 251 00:13:14,700 --> 00:13:17,400 about what you're looking for in a counterparty and that you've 252 00:13:17,400 --> 00:13:19,300 sort of touched on some of those points now. 253 00:13:19,600 --> 00:13:22,200 But perhaps, if you could just elaborate, absolutely. 254 00:13:22,200 --> 00:13:26,800 So I think it's very, very important to establish a 255 00:13:26,808 --> 00:13:28,400 difference between the debt and equity. 256 00:13:28,600 --> 00:13:32,600 Part in this sort of instances. So normally a venture debt 257 00:13:32,600 --> 00:13:34,500 provider and I'm talking about the whole Market here. 258 00:13:34,500 --> 00:13:37,800 Would probably come in and around 33% of, maybe what the 259 00:13:37,800 --> 00:13:40,500 equity provider is putting in simple maths. 260 00:13:40,500 --> 00:13:42,600 If somebody's coming in with three million pounds from next 261 00:13:42,600 --> 00:13:45,500 to perspective, the Lander would look at roughly around a million 262 00:13:45,900 --> 00:13:50,500 as a sort of, Max sort of blend. So we look at it along that. 263 00:13:50,500 --> 00:13:53,700 So those sort of lines, we don't want to land for longer than 264 00:13:53,700 --> 00:13:55,900 about three years. I think Venture debt in itself 265 00:13:56,300 --> 00:14:00,100 by definition is relatively At term, we look at companies that 266 00:14:00,100 --> 00:14:03,400 have good strong Revenue base. So around a million Revenue 267 00:14:03,400 --> 00:14:06,700 route, come. We hope to have the, an element 268 00:14:06,700 --> 00:14:09,900 of recurring contracts in that million when it comes to whether 269 00:14:09,900 --> 00:14:13,100 it's series a or series, b. As Joel said earlier on, I think 270 00:14:13,100 --> 00:14:16,100 it totally depends on the, on the framework, the business 271 00:14:16,100 --> 00:14:18,800 already has and the stage that they're at. 272 00:14:19,000 --> 00:14:23,300 We have lent at series a, but we probably see the majority of 273 00:14:23,300 --> 00:14:25,500 transactions coming at around the series. 274 00:14:25,500 --> 00:14:28,400 B level. We look at some lending along. 275 00:14:28,500 --> 00:14:30,900 Ending with potential covenants, potential warrants. 276 00:14:30,900 --> 00:14:34,600 I mean, from our side we would like to keep an eye on how the 277 00:14:34,600 --> 00:14:37,100 business is is doing by covenants. 278 00:14:37,100 --> 00:14:40,300 I think we'd like to really call the monitors to ensure that the 279 00:14:40,308 --> 00:14:43,900 company is not going vastly off track its budget with that in 280 00:14:43,900 --> 00:14:45,700 mind. We look at maybe it's ebitda 281 00:14:45,700 --> 00:14:50,700 position and its cash held or cash burn, but equally, we can 282 00:14:50,700 --> 00:14:54,700 potentially go in with a less covenanted or monitor position 283 00:14:55,000 --> 00:14:57,100 and take a take a small warrant as well. 284 00:14:57,600 --> 00:14:59,300 And I think what we Talking about earlier at how, the 285 00:14:59,300 --> 00:15:03,700 markets developed, I think pricing has come in, you know, 286 00:15:03,700 --> 00:15:07,000 an awful lot since, since this product sort of came around 287 00:15:07,400 --> 00:15:08,500 through a mixture of competition. 288 00:15:08,500 --> 00:15:10,900 But I think also fairness I think entrepreneurs now can 289 00:15:10,900 --> 00:15:13,000 actually look for a good transaction. 290 00:15:13,000 --> 00:15:15,800 I think, what, what I've set up here at Sherbrooke, I think is, 291 00:15:15,900 --> 00:15:19,400 is commercially very attractive to entrepreneurs and I think 292 00:15:19,400 --> 00:15:21,400 also VCS are waking up to that too. 293 00:15:22,400 --> 00:15:26,000 And as I said, also around the sponsors, we don't have to, we 294 00:15:26,000 --> 00:15:28,000 don't have a specific panelist sponsors. 295 00:15:28,000 --> 00:15:30,900 We learned along. Side, and we do like looking at. 296 00:15:31,000 --> 00:15:34,300 Maybe the PE firms and feces that maybe haven't normally 297 00:15:34,300 --> 00:15:37,700 traditionally sought Venture debt for their portfolio 298 00:15:37,700 --> 00:15:40,100 companies. Because we'd like, you know, 299 00:15:40,100 --> 00:15:42,400 we're open for business and we like to see what's out there. 300 00:15:42,600 --> 00:15:44,700 Okay, really interesting. Well, I mean Giles, will put 301 00:15:44,900 --> 00:15:46,800 some of your observations be I suppose you. 302 00:15:46,800 --> 00:15:52,000 You see the whole markets and what structures are and lending 303 00:15:52,000 --> 00:15:54,200 criteria. Do do You observe as it is a 304 00:15:54,200 --> 00:15:57,000 relatively standard and boilerplate? 305 00:15:57,000 --> 00:15:59,900 Or are we in a Market. Now, with a lot of the spoke 306 00:15:59,900 --> 00:16:03,800 structures and lenders are quite differentiated in that respect 307 00:16:03,800 --> 00:16:05,700 there. I think, when you look at the 308 00:16:06,300 --> 00:16:09,900 market as a whole, that there aren't different products so 309 00:16:09,900 --> 00:16:12,100 that, you know, straight facilities, working capital 310 00:16:12,100 --> 00:16:17,300 lines, some sub mares financing. So there's a real Adventure as a 311 00:16:17,308 --> 00:16:19,400 product is pretty flexible and different providers will have 312 00:16:19,400 --> 00:16:21,900 different products which will appeal to different types of 313 00:16:21,908 --> 00:16:24,100 companies. So that that's becoming more and 314 00:16:24,100 --> 00:16:26,300 more interesting. And again, looking at the u.s. 315 00:16:26,600 --> 00:16:29,800 we're going to see sort of new models, Well that's yeah they 316 00:16:30,100 --> 00:16:33,800 some providers are providing you just marketing spend. 317 00:16:33,800 --> 00:16:37,300 So you know they're giving you a limited facility just for Google 318 00:16:37,300 --> 00:16:40,500 ads and some of my Facebook ads and that's it and no doubt will 319 00:16:40,500 --> 00:16:43,400 come to UK before long. So you know that the product of 320 00:16:43,400 --> 00:16:46,300 Olives as these companies with their different business models 321 00:16:46,300 --> 00:16:47,600 of old. So that that's that's really 322 00:16:47,600 --> 00:16:49,800 interesting but when it comes down to it, you know, 323 00:16:50,300 --> 00:16:54,100 essentially look the market its, it tends to be either covenants 324 00:16:54,100 --> 00:16:58,100 with no warrants or warrants and their covenants and that tends 325 00:16:58,100 --> 00:17:00,900 to be be the deciding factor with a lot of these companies. 326 00:17:01,800 --> 00:17:03,900 I mentioned earlier that, you know, and we'll do this. 327 00:17:03,900 --> 00:17:06,500 Well, that's one of the benefits of a venture debt is at. 328 00:17:06,500 --> 00:17:10,700 Yeah, it minimizes dilution but with a warrant yeah, that that 329 00:17:10,700 --> 00:17:14,700 does yeah, Trent dilution minimal, but dilution, so it 330 00:17:14,708 --> 00:17:16,099 really does come down to question is, do you? 331 00:17:16,300 --> 00:17:20,200 Do you want to have that? That loan is very light but you 332 00:17:20,208 --> 00:17:24,000 know, whether that ongoing monitoring from a provider or do 333 00:17:24,000 --> 00:17:26,700 you want something a little bit, lighter touch and, but yeah, 334 00:17:26,700 --> 00:17:30,700 that, that delete see further. One further thing to add just a, 335 00:17:30,800 --> 00:17:32,900 just a, the question as well. When you're looking at. 336 00:17:32,900 --> 00:17:35,000 So Partners a bit like the relationship between the 337 00:17:35,000 --> 00:17:39,300 entrepreneur and the BC is of a marriage and absolutely a 338 00:17:39,300 --> 00:17:43,200 partnership the same. It really is the same goes to 339 00:17:43,200 --> 00:17:47,800 the, The Venture debt provider and the VC both want to know how 340 00:17:47,900 --> 00:17:49,800 the other person is an act when it all goes wrong which is 341 00:17:49,800 --> 00:17:51,400 really, really key. Yeah. 342 00:17:51,400 --> 00:17:54,200 So well and his team want to know that you have will the 343 00:17:54,200 --> 00:17:56,600 investiture and by that company and guy that can play through 344 00:17:56,600 --> 00:17:59,900 the bad times just to be You see we want will another bench top 345 00:17:59,900 --> 00:18:02,500 providers to know they have the support of their of their 346 00:18:02,900 --> 00:18:04,300 lender? And so that's really important 347 00:18:04,300 --> 00:18:08,800 and Trust throughout the entire VCB ecosystem is Biz key, I 348 00:18:08,800 --> 00:18:10,000 think Behavior. Absolutely. 349 00:18:10,000 --> 00:18:11,900 His jail cell behavior is so crucial. 350 00:18:11,900 --> 00:18:15,200 If you ensure that you can provide a strong rational 351 00:18:15,200 --> 00:18:18,800 approach when things are going badly just as you can, when 352 00:18:18,800 --> 00:18:21,000 things are going well and as Joel said that you know the 353 00:18:21,000 --> 00:18:24,200 ecosystem remembers, it just quickly jars just following up 354 00:18:24,200 --> 00:18:26,500 on that. Is that has the market matured 355 00:18:26,500 --> 00:18:30,200 enough to go through a cycle? Where the sponsors and the 356 00:18:30,200 --> 00:18:35,000 lenders can tell who behaves and how they behave or is that still 357 00:18:35,000 --> 00:18:36,900 to be revealed? I think still to be revealed. 358 00:18:37,100 --> 00:18:39,600 So there are certain. Yeah, it's like muddy Bank. 359 00:18:39,600 --> 00:18:42,800 Curry asked, they've gone through several Cycles. 360 00:18:43,800 --> 00:18:46,500 Yes, of sending money back home. So you got the back license. 361 00:18:46,500 --> 00:18:49,100 Really don't leave sort of recently, but we're lending into 362 00:18:49,100 --> 00:18:52,600 Europe for yeah, for a couple of decades 30s. 363 00:18:53,100 --> 00:18:55,700 Yeah, exactly. Exactly, same, but on the new 364 00:18:55,700 --> 00:18:59,300 wave of Jerusalem out and we will I'll need to see how some 365 00:18:59,300 --> 00:19:02,100 of these providers act when things go wrong with the next 366 00:19:02,100 --> 00:19:04,300 downturn, which they will. How much does it come down to 367 00:19:04,300 --> 00:19:06,200 individuals? Will because I suppose you've 368 00:19:06,200 --> 00:19:07,400 been in the market for a long time. 369 00:19:07,400 --> 00:19:10,300 So even though you with a different organization, it's 370 00:19:10,300 --> 00:19:13,100 still the relationship with yourself that I guess people 371 00:19:13,100 --> 00:19:16,800 rely on as much as they do the, the brand, absolutely, at people 372 00:19:16,800 --> 00:19:18,200 in so many Industries. It's the same. 373 00:19:18,200 --> 00:19:21,100 Its people by people and I think also, there's an understanding 374 00:19:21,100 --> 00:19:23,000 and Trust for it some time in jail so many many years. 375 00:19:23,000 --> 00:19:26,300 And, you know, I don't mean like to say we trust each other. 376 00:19:26,400 --> 00:19:31,200 I think in terms of the The market as a whole, I would hope 377 00:19:31,200 --> 00:19:33,400 that people remember me from transactions, a few years back. 378 00:19:33,400 --> 00:19:36,200 And I've certainly seen that in the year that I've since I've 379 00:19:36,200 --> 00:19:38,300 launched the shore break product, people have got in 380 00:19:38,300 --> 00:19:41,900 touch and said, well remember you from this and and vice versa 381 00:19:41,900 --> 00:19:44,600 also with some of the VCS and P houses and and also 382 00:19:44,600 --> 00:19:48,600 entrepreneurs that maybe of sold companies that they may be 383 00:19:48,600 --> 00:19:50,800 working with me on four, five years ago and they come back in 384 00:19:50,900 --> 00:19:53,500 with new one. So I think I think that the 385 00:19:53,500 --> 00:19:56,600 people the people side is absolutely crucial hinted 386 00:19:56,600 --> 00:20:00,500 earlier also that management. Team in companies is super 387 00:20:00,500 --> 00:20:03,200 important, just like the management team is in the 388 00:20:03,200 --> 00:20:07,600 Landers and the VCS themselves. So as long as you believe that 389 00:20:08,100 --> 00:20:10,800 you can work with that person, I mean it's all about trust that 390 00:20:10,800 --> 00:20:15,000 the end really wanted to move on to a question about about the 391 00:20:15,000 --> 00:20:18,300 awareness and provision of venture debts. 392 00:20:18,800 --> 00:20:22,900 Giles, and know you mentioned earlier that the ecosystem has 393 00:20:22,900 --> 00:20:25,900 developed and evolved and a lot more providers, the products lot 394 00:20:25,900 --> 00:20:29,500 more sophisticated, but how educated would you Ivy c-czar 395 00:20:30,200 --> 00:20:33,600 and indeed of entrepreneurs, are that Venture debt? 396 00:20:33,600 --> 00:20:36,600 You know, are they familiar with what it is? 397 00:20:36,700 --> 00:20:41,100 Who's providing it, how to get hold of it and also I suppose 398 00:20:41,100 --> 00:20:43,900 how it can benefit them on their journey. 399 00:20:44,700 --> 00:20:50,500 I think on the PC side, the top tier or the Silicon Valley style 400 00:20:50,500 --> 00:20:51,900 be seized. Yep. 401 00:20:52,000 --> 00:20:54,900 Understand. And use ventured out on a 402 00:20:54,908 --> 00:20:57,100 regular basis. I think, looking at the tier 403 00:20:57,100 --> 00:20:58,700 below becomes a bit warmer. Mix. 404 00:20:58,900 --> 00:21:04,100 And what is interesting is that because of change the tax breaks 405 00:21:04,200 --> 00:21:07,400 and although some regulatory issues, what we're seeing is 406 00:21:07,400 --> 00:21:09,900 more competition or money, more money flowing into. 407 00:21:09,900 --> 00:21:13,700 These are the tech space from non-traditional tech fans. 408 00:21:14,600 --> 00:21:18,300 And those funds aren't that Savvy on the use of internet and 409 00:21:18,300 --> 00:21:21,600 yes of I know Wilson has spoken with a number of them are but 410 00:21:21,600 --> 00:21:24,100 I'll begin to realize here that the benefits of using it. 411 00:21:24,100 --> 00:21:26,700 So you've got these new people coming in from the bottom, so 412 00:21:26,700 --> 00:21:28,200 smaller funds. Yep, you speak. 413 00:21:28,600 --> 00:21:30,700 Agnostic. But now looking more technology. 414 00:21:31,300 --> 00:21:33,600 And then you're also looking at more sort of, yes, of low end PE 415 00:21:33,600 --> 00:21:37,200 funds, which have their own sort of lending providers 416 00:21:37,200 --> 00:21:40,100 historically. But now I begin to understand 417 00:21:40,100 --> 00:21:43,100 and realize the benefits of using Venture debt so it's 418 00:21:43,100 --> 00:21:45,000 evolving. I think. 419 00:21:45,000 --> 00:21:47,300 Yeah, sort of the top and the market is well catered For and 420 00:21:47,300 --> 00:21:50,300 has been for some while and known user punched out at the 421 00:21:50,300 --> 00:21:53,400 bottom and it's changing with entrepreneurs. 422 00:21:53,500 --> 00:21:58,100 Debt has a bad name in in Europe compared. 423 00:21:58,100 --> 00:21:59,300 Yeah. Which is, which is wrong. 424 00:21:59,700 --> 00:22:04,700 Yeah, so used like anything yet used improperly or unwisely, it 425 00:22:04,700 --> 00:22:11,800 can damage or destroy value, but use well and he's properly. 426 00:22:11,800 --> 00:22:15,000 It can really slow if you have increased value and looking at 427 00:22:15,000 --> 00:22:16,700 the u.s. a lot of entrepreneurs over there. 428 00:22:16,700 --> 00:22:21,200 Again, it's a far more mature ecosystem, far, happier to some 429 00:22:21,200 --> 00:22:26,400 use debt as leverage as opposed to a lot of Europeans and save 430 00:22:26,400 --> 00:22:28,100 Europe Ian's. This still is still this very 431 00:22:28,100 --> 00:22:30,400 much. His mindset that is bad and if 432 00:22:30,400 --> 00:22:32,400 I'm taking debt, I'm doing something wrong or the company's 433 00:22:32,400 --> 00:22:34,700 going downhill. Now, that isn't the case is all 434 00:22:34,700 --> 00:22:37,500 about managing resources and it's far cheaper and might find 435 00:22:37,500 --> 00:22:39,500 more Capital efficient for some companies to take on debt than 436 00:22:39,500 --> 00:22:42,400 others. An entrepreneur's are beginning 437 00:22:42,400 --> 00:22:45,800 to understand this, but again, it's probably more of a mindset 438 00:22:45,800 --> 00:22:48,000 issue, more than one other thing else, okay? 439 00:22:48,000 --> 00:22:50,300 Really interesting. Love well, I mean, how do you, 440 00:22:50,300 --> 00:22:53,100 how do you see it from from from the provider side? 441 00:22:53,200 --> 00:22:58,200 And are most of the people, you you get in front of familiar. 442 00:22:58,300 --> 00:23:03,300 About about what you're about or is there an education that you 443 00:23:03,308 --> 00:23:04,400 have to sort of take them through? 444 00:23:04,600 --> 00:23:08,000 There's definitely less education required than a few 445 00:23:08,000 --> 00:23:10,100 years ago. Even a year ago, I mean, I do 446 00:23:10,100 --> 00:23:12,800 have the occasional phone call where I have to explain, what 447 00:23:12,800 --> 00:23:15,700 Venture debt is certainly certainly I'd say to to the 448 00:23:15,700 --> 00:23:18,800 corporate finance Market that's certainly waking up to this. 449 00:23:18,800 --> 00:23:20,500 Best example. I think in terms of the markets 450 00:23:20,500 --> 00:23:22,600 developed is that the existence now. 451 00:23:22,600 --> 00:23:24,900 Brokers, there are brokers in the Venture debt space, which 452 00:23:24,900 --> 00:23:29,100 shows that when, when companies looking to borrow, There's 453 00:23:29,100 --> 00:23:30,800 somebody out there that will help them package it and take it 454 00:23:30,800 --> 00:23:33,200 to Providers, which certainly wasn't the case a couple of 455 00:23:33,200 --> 00:23:35,300 years ago. I think also that sponsors are 456 00:23:35,300 --> 00:23:39,500 now going in. Also to two companies saying, 457 00:23:39,700 --> 00:23:41,700 we'd like to put x amount since your business. 458 00:23:41,700 --> 00:23:44,700 And by the way, we also think that the following Venture debt 459 00:23:44,700 --> 00:23:49,100 provider can come in with us. So, a lot of sponsors are going 460 00:23:49,100 --> 00:23:52,600 in with a venture debt provider, almost not pre-approved. 461 00:23:52,600 --> 00:23:56,600 But the discussions have been had already as opposed to really 462 00:23:56,600 --> 00:23:59,300 historically, where Maybe A entrepreneur was thinking well, 463 00:23:59,300 --> 00:24:01,500 we just raised some money. I'd rather not sell any more 464 00:24:01,500 --> 00:24:03,200 shares. Let's let's go on Google and see 465 00:24:03,200 --> 00:24:06,700 if anybody will end to us and it has actually really changed now, 466 00:24:06,700 --> 00:24:10,100 where it is much more of a is much more of a sort of live 467 00:24:10,100 --> 00:24:13,600 system, where and also CFOs talk to other CFOs, the amounts of 468 00:24:13,600 --> 00:24:16,900 CFO networks that I've come across where see if I have one 469 00:24:16,900 --> 00:24:20,300 company is recommended another CFO to me and just said, let you 470 00:24:20,300 --> 00:24:22,900 speak. So well, he did this for us and 471 00:24:23,100 --> 00:24:26,200 and Word of Mouth does get around and I think, you know, 472 00:24:26,200 --> 00:24:29,500 from that side of things, the In the knowledge base out there is 473 00:24:29,500 --> 00:24:33,400 better than ever and especially in sort of relatively turbulent 474 00:24:33,400 --> 00:24:35,800 times. I think it will continue 475 00:24:35,800 --> 00:24:37,500 growing. You know, I think so. 476 00:24:37,500 --> 00:24:40,100 Just a sec. Okay something will also then on 477 00:24:40,200 --> 00:24:43,900 children times that the message, we're getting from, a lot of 478 00:24:43,908 --> 00:24:45,600 people in the market is that? Yeah, we don't know what will 479 00:24:45,600 --> 00:24:49,300 happen the next year, 12 years time and yeah, we are being to 480 00:24:49,300 --> 00:24:51,300 see an uptick in people looking at. 481 00:24:51,300 --> 00:24:53,400 Then you start thinking, I don't raise money now because the 482 00:24:53,408 --> 00:24:56,000 valuation isn't there. I don't know where I'd be able 483 00:24:56,000 --> 00:24:58,100 to raise money in 12 months, six months time. 484 00:24:58,300 --> 00:25:00,600 So again coming back to this point about extending the runway 485 00:25:01,700 --> 00:25:04,300 but take advantage that now eating out growing the company 486 00:25:04,300 --> 00:25:05,800 for the next 18 months and then yep. 487 00:25:05,800 --> 00:25:09,600 Hopefully weathering what will be will be and then took going 488 00:25:09,600 --> 00:25:11,300 out there and in some two years time to raise. 489 00:25:12,200 --> 00:25:15,200 So yeah, we are sort of seeing more of a venture to as a safety 490 00:25:15,200 --> 00:25:17,600 barrier which is which is interesting. 491 00:25:17,600 --> 00:25:20,300 It's really good. And I think that leads us on to 492 00:25:20,400 --> 00:25:23,400 the final question. I wanted to put you to you both 493 00:25:23,400 --> 00:25:25,800 and I was just skiing for what your sensors are, what your 494 00:25:25,800 --> 00:25:30,900 outlook is for the future of Venture debt provision in Europe 495 00:25:31,200 --> 00:25:36,400 and also perhaps how, how the market will evolve and how 496 00:25:36,400 --> 00:25:39,800 lenders will differentiate as a Zagros. 497 00:25:39,800 --> 00:25:42,800 Indeed, as it has done, over the last few years and Charles. 498 00:25:42,800 --> 00:25:46,600 Maybe if I could come to you first on that one, I think you 499 00:25:46,600 --> 00:25:50,100 will see a conversion to between some of the fintech companies 500 00:25:50,100 --> 00:25:52,100 and the Venture debt providers people like, world can have 501 00:25:52,100 --> 00:25:55,800 instant access on a daily basis to cash flow is running through 502 00:25:55,800 --> 00:25:58,100 these companies. So as the technology becomes, 503 00:25:58,200 --> 00:26:01,800 More sophisticated as AI becomes more sophisticated, you will see 504 00:26:01,808 --> 00:26:04,500 that's a blend between Fender understand and fintech. 505 00:26:04,600 --> 00:26:08,400 Short-term lending is already, is already there in the US will 506 00:26:08,400 --> 00:26:10,400 see more of that over here in the UK. 507 00:26:10,400 --> 00:26:13,400 Overall the the sector will change from traditional banking. 508 00:26:13,400 --> 00:26:17,100 It will take on cues from what we're seeing in terms of retail 509 00:26:17,100 --> 00:26:20,100 fintech will be then applying to the corporate space. 510 00:26:20,900 --> 00:26:22,600 Well, what is what is your outlook? 511 00:26:22,600 --> 00:26:25,500 Where do you see the Mark again? Well, it's buoyant it's growing 512 00:26:25,500 --> 00:26:27,700 and I would say that but it really it really is. 513 00:26:27,700 --> 00:26:30,600 I think Charles is points of spot on on the fintech side 514 00:26:31,000 --> 00:26:36,000 disruption is completely all over this Market anyway and will 515 00:26:36,000 --> 00:26:38,600 continue to be. I think there's certainly an 516 00:26:38,600 --> 00:26:41,700 opportunity for growth in Europe in the coming years. 517 00:26:41,700 --> 00:26:43,700 I think. Flexibility in terms of offering 518 00:26:43,700 --> 00:26:46,800 is key. I think we've hinted a lot in 519 00:26:46,800 --> 00:26:50,300 this in this in sort of session around providers in the Venture 520 00:26:50,300 --> 00:26:52,900 debt space saying warrants or all covenants. 521 00:26:52,900 --> 00:26:56,100 And I think having a the ability to be able to sort of move and 522 00:26:56,100 --> 00:26:58,900 shift between both of those sort of areas is Is is going to be 523 00:26:58,900 --> 00:27:01,700 very important. I think also improved execution 524 00:27:01,800 --> 00:27:04,300 delivery and reliability in the market. 525 00:27:04,300 --> 00:27:07,200 I think there's been a, there's been a lot said, over the last 526 00:27:07,200 --> 00:27:08,400 few years. Certainly the Venture that space 527 00:27:08,400 --> 00:27:10,300 around how long it takes to get something done. 528 00:27:10,700 --> 00:27:12,900 I think it's vital to be able to act quickly. 529 00:27:12,900 --> 00:27:16,100 These companies don't want to sit there with Reams and 530 00:27:16,100 --> 00:27:18,500 massive, huge documents full of paperwork. 531 00:27:18,500 --> 00:27:20,700 They have to complete, they wanted to be quite slick. 532 00:27:20,900 --> 00:27:23,000 And I think that's something that certainly gonna have to 533 00:27:23,000 --> 00:27:25,900 improve. And has improved jobs hinted 534 00:27:25,900 --> 00:27:28,100 around the zero thing. I think data scraping and 535 00:27:28,300 --> 00:27:32,300 General is certainly helping. I think companies that are able 536 00:27:32,300 --> 00:27:37,200 to make that execution part quicker in terms of sort of data 537 00:27:37,600 --> 00:27:40,400 and Dee Dee that's going to be a very important part. 538 00:27:40,700 --> 00:27:43,300 I think look I think in terms of an overlooked overview in 539 00:27:43,300 --> 00:27:47,000 general, this is a growing Market that continues to grow 540 00:27:47,000 --> 00:27:49,300 and I think we'd London being relatively speaking, you wash 541 00:27:49,300 --> 00:27:51,500 with cash still certainly in the VC side. 542 00:27:52,200 --> 00:27:55,500 There is a real real demand for this product and I think it's 543 00:27:55,500 --> 00:27:58,600 only going to go one way, right? And I think on that note will 544 00:27:58,600 --> 00:28:01,200 Chapel Charles Hawkins. Thank you very much. 545 00:28:01,200 --> 00:28:02,200 Thank you. Goodbye.