Raw Transcript_I3 Equity Partners

I would just maybe like you to start a little bit with your professional background and maybe a little bit of an introduction about yourself, and we can start off with that.

We, at i3, invest in what we call super earlystage deep tech startups. That means that we invest in pre-seed and seed stage ideas. We look for very strong teams that have specific, relevant experience in the market that they are going to try to revolutionize. We look for ideas that have a significant amount of IP in them, meaning patents and other ways to protect an invention. And of course, ideas that target significant market opportunities and mean that the technology or the product that comes out of the technology can make a significant impact on a market that is significant enough so that the disruption will be worth it.

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What challenges did you face in having i3 Equity Partners, and how did you mitigate it? You could shed some light on that aspect.

At the end of the day, the startup ecosystem in which we operate is very competitive. There is definitely a very significant number of ideas and new starts, a new entrant. We first per year we see 200 to 400 startups. And I think the number one challenge that we face is to decide which ones are the ones that we can say no to very quickly without wasting anyone's time, simply because they are not a good fit for what we are looking for. And then take those that are a good fit and be very efficient in the way that we do the due diligence in order to make a decision on whether or not it's a deal that we would like to make while making the process the due diligence process. And something that adds value to the startup regardless of our final answer. But that creates a relationship between us and the entrepreneurs where they value the interaction with us regardless of the outcome. And we respect them. We learn a lot from them. And at the end of the day, we add value whether we end up investing or not.

If you could give me an idea of a specific initiative at i3 Equity Partners that you spearheaded. Maybe if you could throw some light on that.

We can talk about a company that is still evolving, and we can talk about past exits. One that is still evolving is a company in the consumer space. The name of the company is Tulu. Tulu's business is in building micro rental retail points for large buildings where people can basically go down to the retail point and rent important equipment for their daily lives, whether it be a scooter to get around, a vacuum cleaner to clean the house, or an entertainment device such as maybe a TV projector or a PlayStation. And by staying very close to those consumers, using advanced technology to predict their needs and understand their usage patterns in a way that helps the company bring the maximum value to consumers, to the building management companies, and also to the manufacturers of the equipment so that the products continuously get better. We bring the right products to the right users and bring value to building management because the building has an amenity that is very important to the residents.

The company was started around five years ago, and it is now active in more than 300 buildings in Western Europe and the US, serving close to 150,000 users in almost 50 cities, and is growing basically double in all parameters in the last 12 months.

With that, I would like to shift a little bit towards maybe a new approach or a new technology, which you feel you are excited about, specifically in this startup ecosystem. If there is some new technology or maybe any new approach that's coming up and excites you, you could talk about that too.

The biggest revolution that I think defines the current decade is AI, and how can AI be used to improve people's lives? How can AI be used to improve businesses? And one of the companies that I recently invested in is called HDFI. And HDFI helps manufacturers hedge and basically stabilize their P&L by removing the risk of commodity price fluctuation. If you are a cookie manufacturer or a builder, you are dependent on the price of sugar, palm oil, wheat, or aluminum. And those fluctuate from the time that you need to buy the materials until the time that you sell your product for, typically for a preed price. The idea is that there are financial institutions that are willing to absorb that risk. Sometimes they win, sometimes they lose, but at the end of the day, what you get is a stabilized P&L

Many large organizations do it: Cargill, Nestle, and those very, very big corporations and companies that are smaller and sometimes have billions of dollars of revenue have not done it for a variety of reasons. The main one is that the business involves a lot of manual analysis that can be replaced by today's AI. So Edify uses advanced AI technologies, advanced models that can help organizations build the right hedging approach. In order to stabilize their P&L and increase their top and bottom lines.

As we almost come to the end of the interview, I would just like to know if you have any advice for budding entrepreneurs in this startup ecosystem. Because you have been there in this ecosystem for some time now, if you have any advice, we could end the interview on that.

I don't think there's any one single piece of advice that can help people succeed, and building a new venture is a very complex and risky adventure. But if there's one thing that, for me, is the core focus of the journey that I am passionate about, the journey from ideation to product-market fit, and my focus with companies that I help fund and companies that I am very grateful to be a part of their journey, my advice is, or the thing that we very often come back to, is to not be tempted to go to premature growth before there is enough product-market fit. So the temptation sometimes by investors to invest more money and run, run very quickly, to add more customers is something that can derail companies, can hurt the management team's focus on first making sure that they are building a product that customers must have, that customers depend on for their day-to-day activities, products that bring value and will bring value more and more the more they're used and the more they are deployed

Sometimes you can identify network effects; sometimes you can identify other additional factors. And as long as you are very disciplined about taking the right steps at the right time and do not rush too quickly to add more customers before the product and the company are ready for it, you have a much higher chances of success.