Get a virtual seat at Knight’s Round Table - a place where you can get insights from the partners of Knight Capital. We hope to bring you a closer look into the VC world and the human elements of investments.
To premiere this new format, we have brought Marco Joosten, an associate at Knight Capital to share his story of working at Knight, and how his financial background led him down this path.
As an Associate with Knight, Marco is involved in sourcing and analyzing new leads, has a role in new investments, and helps existing portfolio companies to develop. Without further ado, here’s the interview with Marco, a key member of our team.
Question: Hi, Marco. Great to have you, I was wondering, can you maybe share something about how you got in Knight Capital. How did you tap into the venture capital world?
Marco Joosten: My start in venture capital was in July 2020. I got in contact with Knight Capital in May 2020. At that time, I was still studying in Lisbon at Nova School of Business and Economics.
During that time, I completed a few courses in venture capital, which got me very excited about the startup scene. Moreover, it seemed logical as it was also connected to my background in finance and prior work experience. During my employment at YES Corporate Finance, I got involved in growing tech startups, where I assisted those fast-growing companies in arranging financing and other capital raisings. So for me, it was a very clear next step to join a VC. From that moment onwards, I got in contact with the Knight Capital, read a bit into the background of the people working here, the fund, and the scope of the fund itself. I very much liked the fact that the fund is more internationally oriented. Considering my background of having lived in four countries in the last seven years, this was very important to me. Furthermore, I also found the investment thesis very interesting and the hands-on mentality of the people I spoke to within the first few interviews. As former entrepreneurs, the team cares about decisiveness and providing the opportunity for you to initiate. It was great to see that we were on the same page about this and only a bit later I was happy to be part of the Knight team.
Q: You mentioned shortly that at YES Corporate Finance that you were involved with startups. Can you maybe briefly share a bit with us what your experiences were and also what you liked about them?¨
Marco Joosten: At YES Corporate Finance, we did three kinds of services for fast-growing startups and other companies.
Firstly, there were acquisitions of both startups and more mature companies. Oftentimes, for startups, this included sell mandates to (corporate) venture capital or other early-stage investors.
The second service we provided was fundraising, so simply going to banks, and to a lesser extent, other alternative financing opportunities. This was very hands-on support of selecting the appropriate financiers and preparing the company at the best for it.
And the third service we had was CFO as a service, where we actively assisted these companies in their, monthly or sometimes weekly, financial performance. So providing liquidity monitoring, cash management, and assistance for reporting. Companies appreciated this as we brought in the expertise required as CFO, while not being needed for a fulltime basis.
At the tasks for later service, I have learned a lot about the many dynamics and sometimes restrictions that revolve around a young company. I was deeply involved in the cash management, budgeting, and new business cases for these companies, and as such strategy was important too.
At the other end of the spectrum, I was also involved in more transactional projects of approaching the investors and discussing prospects, investing memoranda, pitch books, etc. Altogether, it has been a great variety of tasks that now enables me to carry over this advice to portfolio companies.
Q: And were any of these experiences, particularly that you said, that you feel have helped you to become a better venture capitalist today?
Marco Joosten: Yeah. Generally speaking, you can only really experience the dynamics of a startup when you've actually been in there. So I've had the luck to be part of a few startup experiences.
During my studies, I've been working part-time for a startup in their accounts-payable department. It was my first time experiencing these dynamics and the entrepreneurial vibe that often circulates in a startup. And this continued, then, at YES Corporate Finance, which itself was a startup, but also I was working with startups again. So I had plenty of opportunities to work hands-on on these projects. So what made me better as a VC is the opportunity to work within these kinds of organizations and the way of thinking that you can create a true impact.
I've also worked in a corporate for a year, and I think the biggest contrast of (working in) a corporate and a startup for me was the fact that in a corporate, certain processes are just the way they are and they won't change and you won't be able to change it. In a startup, though, everyone can change these things and contribute to better performance. Generally, ownership of tasks and accountability is much more in place.
I think, as a VC, it's very important to understand those kinds of processes, to have your impact on them. Being exposed to multiple company cultures and taking on ownership of work, makes you more understanding as a VC when it comes to contributing to the operational performance of portfolio companies and even understanding new business models.
Q: Nowadays, you're involved with the ventures from Knight VC, how do you help them forward?
M.J.: Basically from the start, half a year ago, I have been involved in deal sourcing and working towards closing deals. On the other hand, simultaneously, I've also been involved in assisting the existing companies in their performance.
As I mentioned before, operational experience and exposure to strategic projects have made me more understanding of business processes. For portfolio management, I try to challenge companies on their current performance as I have experience with this. Moreover, as a VC, you come across a wide range of companies which broadens your understanding of various go-to-market strategies so this is something that I feel we act as an active partner for companies. It is important to challenge the counterparty without limiting their entrepreneurial space. As our team at Knight largely consists of ex entrepreneurs, we understand this situation better than anyone.
Q: We forgot to discuss this initially, can you maybe describe your main responsibilities within the firm?
M.J.: Perhaps, it’s good to mention that Knight Capital has a slightly different approach than traditional VCs for deal sourcing. A lot of VCs rely extensively on inbound leads they get, but we also believe that, as a starting VC, it is important to actively approach the startups ourselves, which would help us ahead of the competition within the venture capital industry.
So we actively scout a lot of companies. I'm involved in, scouting and analyzing companies. The analyzing parts range from competition and market analysis to financial analysis to team analysis. I would say all aspects of a company that contributes to the performance and the potential of the company.
With regards to our existing portfolio companies, I'm involved in reporting and portfolio management. These are monthly and quarterly performances of the companies, we analyze as investors. Afterward, we have a catch-up call with the company to discuss the performance and to brainstorm about the strategy execution going forward.
I have also been involved in include marketing initiatives, writing articles, and branding Knight Capital.
Knight Capital is a young organization, so a lot of processes, have to be built up from scratch. And this is something that I've been working on for the last two months. Most notable, I have been very active in efficiency improvements, brainstorming about ways how we can enrich our database of startups and improve our processes.
I think even within Knight Capital, there's a great chance for entrepreneurship too, and this is very much encouraged, and I think that's something I've been engaged in from the beginning as well. So it's a lot of analyzing, but at the same time, there's also an opportunity to get started with things that you think you can add value to.
Q: When you evaluate a company, what are just some of the aspects that you look for in a company? Are there some, I would say, special “Marco features” that you look for?
M.J.: I think, generally speaking, every VC tries to distinguish themselves from the competition, but I think essentially every VC looks at the same parts. So it is very much “is the market big enough?”, “Is it a red ocean or a blue ocean market?”, “How's the team doing?”. But I think, even as a VC, everyone has their primary points they pay attention to and they're particularly interested in. For me, a personal fit with the founder regarding expectations and vision is very important. But this is often hard to identify at first analysis.
I do have a certain order for myself which I apply for a first analysis. First of all, as a series A investor, it is very important to identify the actual pain point. So there has to be a certain pain within the industry or pain within even the global economy, which has to be solved. If there is no such pain, the product becomes much harder to sell. So for me, this pain has to be clear and obvious.
Secondly, I think what's very important is certain traction. As a Series A investor, there has to be some commercial traction already. Financial health is also very important. This is often indicated by metrics and, I think, growth, gross margins, customer acquisition costs, and viability of the business case should shed some light on this.
As a third point, the team is also very important. The business case might be perfect, there might already be some traction, but do we think, as an investor, that the current CEO or the current entrepreneur can capitalize on this opportunity as well?
And lastly, I think the market is also one of the more important factors because, obviously as a VC, you'll need to have certain returns, and oftentimes it is easier to scale up in a large market than a niche market where opportunities might be more scarce... So those kinds of points are the ones I address first.
Q: Maybe you can also share a bit about this: How did your international experiences help you to look at companies?
M.J.: During my bachelor's, I did an internship of six months in London. This was a financial administration company that I worked for, and this triggered my interest in working in international organizations or international-oriented industries.
Afterward, I started studying in Lisbon, in Portugal, so I studied and stayed there for one and a half years and also topped it up with an exchange in New Zealand for half a year. So I've been working and living in quite some countries.
I've been exposed, in the Netherlands to mainly Dutch culture, in the UK to mainly UK culture, but in Portugal, I studied with so many international students. I studied with Germans, Italians, Spanish, and even Brazilians and other South American students. Each person has his approach which is often driven by culture. Being exposed to so many cultures, allows you to understand different approaches and this helps me in the dynamic sphere of venture capital. It supports you in problem-solving but also creativity. And lastly, on the personal level which is also important as VC, being more open-minded enriches your soft skills too. Above all, international experiences are just a lot of fun!
With this, we have to conclude our first interview, a premiere inside look into the team of Knight. We want to continue doing these so if you enjoyed you can show appreciation through a reaction & comment on Linkedin / clap on Medium or you can subscribe to our newsletter and we will keep you up to speed.