Elliot Moss
That was the big sound of Aretha Franklin with Think. Good morning this is Jazz Shapers, I’m Elliot Moss, thank you very much for joining. Jazz Shapers is where you get to hear the very best of the people who are shaping the world of jazz, blues and soul and right alongside them we bring someone in who is shaping the world of business. We like to call them Business Shapers. My Business Shaper today is Frederic Court and he is the Founder and Managing Director at Felix Capital. They are a venture capital firm, they are the people behind many big businesses, they invest very wisely generally, and you will be hearing lots from Frederic about his investments in Deliveroo, in Goop, in Peanut and in Farfetched to name but a few. In addition to hearing from Frederic you will also be hearing our new feature called the News Sessions, it’s where Paddy O’Connell will be discussing GDPR with a couple of Mishcon de Reya lawyers and they will be getting under the skin of that topic. And as well as all of that of course you’ll be hearing some brilliant music from the shapers of jazz, blues and soul including Chet Baker, Van Morrison, Ray Charles and this from Bill Withers.
That was Bill Withers with Ain’t No Sunshine, iconic, and you are going to be hearing some more icon music with the brilliant line-up as you heard earlier. This is Jazz Shapers as I said and my Business Shaper today, I am very pleased to say, is Frederic Court, Founder and Managing Partner at Felix Capital. They are a venture capital firm and we haven’t many venture capital people on and it’s really nice to have you. Bonjour, I should say firstly.
Frederic Court
Enchanté.
Elliot Moss
Frederic is French but has been in London, you’ve been in London for how many years now?
Frederic Court
It doesn’t sound like it but I’ve been in mostly in London since 1994.
Elliot Moss
So, tell me Frederic how a person like you becomes someone who ends up as an investor because I have many, many people on the programme who start as they, they create a business and then they might seek investment from someone like you. You’ve obviously set your own business up but investing is a specific thing. How did Frederic get into that?
Frederic Court
Now that’s a good question. I am an investor because I love doing what I do and it’s really what suits me well and I think I haven’t been too bad at it and I just intend to keep on doing this for the rest of my working life. I ended up becoming an investor through two kind of path before starting making investments we started in 2001 in London. I first came to London in the mid-nineties to become investment banker so I work with Lazard for close to five years where I was doing advisory M&A essentially in the TMT space so that Telecommunication, Media and Technology and increasingly focused on the rise of the internet so I saw that emergence of the first wave of internet disruption and transformation and business opportunities which was absolutely fascinating and that led me to start my own company in 1999 where I left the plush world of Lazard and at the time I moved to New York which was a lot of fun but also a lot of hard work because it was a time when I was in my late twenties and I thought well let’s, why not have a go at starting something and I started with a partner, an online market place for the textile industry where we were basically trying to use the internet to transform the way that the industry was working, an industry with lots of participants, globalisation, many trends changing the industry such as fast fashion and the need for new tools and we started in 1999 and we started working with venture capitalist so that’s how we, I first put my own money into this business and then started to raise capital and worked on the board that we had with a couple of venture firms and that’s how I first got exposed to venture capital.
Elliot Moss
And for you, the connection between money and passion is very important because it’s one thing being able to find the fund it’s another thing being able to place the funds with somebody who you really think has a vision and has a mission and is pushing to do something special. How do you spot those people?
Frederic Court
That’s a good question and I would say it’s two different, two different questions almost because one is first defining passion as a key trait of the kind of people we are looking for and then how to find them. Over the years what I have seen, having been an investor now for almost eighteen years is that it’s never a straight line, every, every entrepreneur we work is trying to do something that is very difficult, almost impossible, you have to be usually a contrarian and try to do something that’s not obvious and it’s, unless you are motivated by enormous both passion and ambition it’s very difficult to do. If you just there for the money it’s not going to work. You need to have something much bigger at stake to make it. So we are looking for those people who are, who have got that vision that need and where that kind of, that becomes almost like a cause that makes their key, that is a key part of their life and that’s at the centre of the business proposition and then the investment proposition for us.
Elliot Moss
And we’re going to hold it right there because I want to bring you some music and also I want to explore this point particular in a moment. Right now this is Chet Baker and The More I See You.
Another big Jazz Shaper there that was Chet Baker with The More I See You. And my Business Shaper today, Frederic Court, Founder and Managing Partner of Felix Capital, the interesting and complicated sometimes world of investments. We were talking earlier Frederic about the search from your perspective for passion and then ensuring that that person also, I imagine, on top of that understands what they want to do with that passion. Let’s just go back a little bit so for you passion is important. Does it matter what they are passionate about?
Frederic Court
Well it matters to us in the sense of who we are only going after specific areas. So we position the Felix Capital at the intersection of technology and creativity. I have been an investor in a different firm before it was more generalist and I felt that at the time when technology is changing everything in our life today and probably you know most of the listeners will have their mobile phone in their hand or not far away and doing, you know, many different things with that tool, so technology is changing every aspect of our personal and business life and it’s becoming increasingly difficulty to be a generalist investor. So we felt there was an opportunity to build a new venture firm that would focus on opportunities that would relate to specific consumer segments, lifestyle segments and where there is an element of creativity involved. We and three of the companies we backed, started as little kind of side project with a very simple blog and in fact more like a decade ago and over a decade built a community, built and audience and built, start to build a business and that’s where we typically we approach these entrepreneurs we don’t just wait for them to come and knock at the door, we obviously want more of that because that makes our life easier but we, we very specifically go after people who are doing something that we find interesting and we explain to them why we are knocking at that door and that’s how we become relevant to them and potentially win their trust and become a partner in the business.
Elliot Moss
Now when you set this business up was there a burning, apart from wanting to leave Lazard, was there a burning desire to just be your own boss?
Frederic Court
So, when I, so I’ve been an entrepreneur twice. First when I started my company in the nineties and now…
Elliot Moss
Now this.
Frederic Court
…now with Felix, so in both cases I wanted to have the flexibility to be in charge and to choose my battles and it comes with a lot of responsibility but it also great because I can decide to today now spend an hour with you and talk about what we do as opposed to having a boss telling me where I should be spending my time. So that’s sort of a luxury that I have been able to earn and it’s I think it’s also at the centre of the life choices that most entrepreneurs make where they decide to put their job at the centre of their life and it’s much easier to do if that’s a passion.
Elliot Moss
And what about the confidence, I mean I meet lots of people outside of this place, this programme, who have got great ideas but haven’t got the confidence to pursue them. What do you think gave you the confidence to say ‘I’m Frederic, I’m going to make my own thing happen’. Why did you not doubt that you could do it?
Frederic Court
I didn’t say I didn’t doubt I could do it. And I, of course I had questions especially starting Felix where lots of the bigger firm at Felix was basically on my shoulder and was based on my original idea but also track record. In fact, for the anecdote when before launching Felix I was, I wasn’t minded to launch it as we did with such a small team but I was looking for partners to join and it was not easy to convince many people to join at the time starting a new venture capital firm based in Europe more thematic and a lot of people told me actually that it would not be possible but I thought well let’s have a go, if it doesn’t work the worst case, you know, I can do enough get a job somewhere else which I had a number of opportunities around but if it works I can then shape something that is exactly what I want to do. And I was fortunate that it worked and to some extent worked better than we expected as we underestimated the level of demand from investors for what we do and we vastly underestimated the level of demand from entrepreneurs to have a sort of trusted partner next to them who understands their, the battle they are fighting and also their domain.
Elliot Moss
Stay with me to find out much more from my Business Shaper today, that’s Frederic Court and he is the Founder and Managing Partner of Felix Capital, they are investors and clever ones too. Right now though we’ve got something new from Jazz Shapers, it’s called the New Sessions, you may have caught it last week, it’s with Paddy O’Connell, he’s in conversation with a couple of Mishcon de Reya lawyers getting under the skin of an important issue. The important issue right now for most of you out there in some form, business or personal, is GDPR.
You are listening to Jazz Shapers with me Elliot Moss. Every Saturday I meet someone who is shaping the world of business doing amazing things. In this case today it’s Frederic Court and he is an investor in amazing companies and he himself is an amazing company. If you’ve missed any of the previous guests I should note for you, go into iTunes put in the words ‘Jazz’ and ‘Shapers’ it’s also the place you will find the latest podcast, the longer version, of the New Sessions of which you have just heard a snippet.
Frederic we were talking about passion and we were talking about focussing on a theme, a thematic as you called it which is in your case technology and I think fashion is kind of, it’s been connected in there.
Frederic Court
The creative industry.
Elliot Moss
The creative industry, that’s right. Farfetch is a really big one that many people I know use and it’s kind of become one of those ubiquitous brands. Tell me about your journey with Farfetch.
Frederic Court
So, in 2009 I was rethinking about where I should be spending my time and what kind of companies I wanted to back and it was one thing that struck me is that Europe had seen the birth of some of the most impressive and influential digital fashion and commerce companies in the world. ASOS kind of pioneered a model for young female customers with fashion, Net-a-Porter created a model mixing content and commerce and really opened up the way for online luxury. VenTribe in France created the flash sale model so a lot of innovation in the online fashion market started from Europe so I was thinking about what would be the next thing coming after that and as I mentioned earlier I started in the market place before in the textile industry so that gave me a good sense of how the industry worked. And that led me to Farfetch in October 2009 to be precise, a year after the company had started. I first subscribed to the newsletter in 2008 and then ended up reaching out to Jose and meeting him, Jose the investor founder of Farfetch, not really having a sense of what the business was about I didn’t quite understand it from the outside and I remember having that first meeting where I was struck by just how both humble and smart Jose was and I felt that he was really onto something. He had something he had created as a fashion insider, owned a couple of boutiques, a little network almost like a community co-operative of boutiques that together were pulling their inventory giving him products that he was then selling taking a commission. So he was creating an online retail model with no inventory which was really interesting as taking an inventory in retail is always a big challenge and he was doing this, he was working quite badly because for customers it was a pain but there was already evidence of enormous customer love, there were people from all over the world trying to shop those beautiful products that were sitting on the shelves of boutiques in Paris, in London or Rome or Capri or other places like these, there were around forty boutiques. But it was like a ten/fifteen man band, it was doing a few hundred K of dollars of volume of transaction every month. So there was something but it was really early and I felt Jose had that kind of spark and potential to bring something much greater so I managed to convince my partners to back Farfetch with a first investment of £3 million that we closed early 2010.
Elliot Moss
This thing about you knowing is what intrigues me because your background is a finance guy. But it sounds like you have become a student of these different worlds. If you can go and just you said oh casually I just picked up the phone to Jose, it was 2009 then, it wasn’t a big deal. Where does, is this knowledge self-taught because no-one sat there and said ‘right Frederic here is the key to the new world of digital, here is the key to the creative industries’. How have you learnt? Because people listening will go how did it become the Frederic with the guy with his finger on the pulse?
Frederic Court
This is a very good question because I basically decided that I joined an investment firm that was very technology-centric and I am not an engineer. I started cultivating investments that were more in telecommunications, equipment companies and semi-connector and I was saying a really love the impact that technology has on the world but I am never going to make it, I just don’t understand it. So I started to focus areas where, which I understood and also increasingly where I had an angle or even an interest for. I am a man who likes shopping.
Elliot Moss
He is dressed beautifully by the way. Obviously Frederic has a wonderful accent but also he has great clothes of which I am quite jealous. I wanted to tell you that.
Frederic Court
Well, thank you very much. I was, and then I basically started to go after areas that I was interested in. I started meeting people, building and understanding and that’s today when I talk to my team, that’s very much what I tell them to do. It’s… our business is all about conviction and you have to build your conviction through a number of things – being knowledgeable about a space is important but having an interest for these, a passion for these areas is very important. This is how we connect to people but also we can convince them that we are the right partners. So it’s a journey and what’s fascinating about what we do is that we never stop learning. I listen to podcasts all the time, I read a lot, I and we are looking at opportunities especially investing in the consumer world that can be in front of us at any point in time. I learn a lot for instance from my daughters just understanding, I’ve got two teenage daughters of now fourteen and eleven years old and seeing the way they engage with technology, the way they consume content, the way they connect with their friends, the way they are inspired for their own purchase is fascinating and we are constantly learning.
Elliot Moss
Stay with me for more from my Business Shaper. That’s Frederic Court, Founder and Managing Partner at Felix Capital. Time for some more music. It’s another big shaper, Van Morrison with Moon Dance.
That was Van Morrison with Moon Dance. I am with Frederic Court as I said earlier and we have been talking about learning and curiosity. Your business which is obviously you are able to raise amounts, huge amounts of money because people trust you and institutional investors, proper long-term capital saying this is a good way to hedge as it were to take a slightly shorter-term view and so on. You’ve got and I don’t know if this is unusual in the money world but you have a really interesting manifesto where you talk about, and you mentioned it earlier Frederic about people seeing that you really are, you really dig what they are doing, that you really are on their wavelength and you talk about in your manifesto and I advise anyone just to go on the Felix Capital website and look at this because I think it’s really interesting, any business should have one of these. A venture firm for the creative class you talk about, everything we do is with entrepreneurs in mind. You mentioned earlier we are a conviction driven firm. Work hard, be nice to people, I mean that’s a simple and lovely thing. Every investment counts, there’s never a pound or a dollar or a euro that isn’t important. We know what we are looking for and I love this, we offer differentiated capital and so on. Where did this come from? These things because they are really well written, they are dead simple. Someone like me who is not in this world understands them because I am interested in kind of companies that are obviously well run. What’s, what’s this about?
Frederic Court
It’s basically about why we are doing Felix and the world doesn’t need another venture capital firm. We, I got to a point where I felt there was an opportunity to do something different and that was also, and also I was at a point where I felt it was important for me to start something that would probably define my life as well, that my children would be proud about and that would give me a fantastic platform to combine work and passion. And this, I didn’t sort of come up with this just overnight saying okay I have been doing this before and here is the next. There was a journey of probably, I don’t know maybe two, three maybe four years where this kind of grew in me and at some point it was, there was a kind of urge to do things and I did write that manifesto very fast, pretty much in one night just before launching Felix where we, that was I really had to do it at that point and but it was important to state out there why we had created Felix and what it was about and what would define both our culture and our investment strategy and I think the vision is to build a venture firm for the creative class. The mission is to be a good partner to entrepreneurs and these are the two pillars on which we are building Felix and this is, we are getting great feedback from this manifesto and I think the reason is that it’s very authentic. We are in the same way we are looking for authentic brands, we are looking for founders who are doing something that they really believe in which is not just about making quick money but it’s about having an impact on the world so this is our way of saying what we have an impact on the world, a positive impact on the world and it’s also a good guideline as we are building both our portfolio and our team. We want people to believe in this.
Elliot Moss
And indeed one of the people you have invested in is Michelle Kennedy who was on this programme, she is a Founder of Peanut. Final chat coming up with Frederic a bit later, plus we are playing a track from Ray Charles that’s in just a moment.
That was the final shaper line-up here before we go to the choice of Frederic which we will be doing in a bit and that was Ray Charles of course with Georgia on My Mind. Frederic Court my Business Shaper just for a few more minutes. You mention in there the second part of the equation as it were about your people that you are investing in seeing you as a partner, seeing you as someone who understands and has their if you like their mindset and can relate. What is it that they relate to in you personally do you think Frederic? What is it when they look you in the eyes and they see beyond the money that you can bring them, what else are they buying?
Frederic Court
They are I think many of the entrepreneurs we work with don’t quite realise this this early at the beginning because it is something we build over time. We love to invest in companies and work with founders that we get to know a few years before so then it works both ways we get to know them, they get to know us. And what we bring it’s obviously capital that’s a key part of the equation but it’s domain knowledge, it’s a network and it’s an experience of having been in that situation. Most entrepreneurs have… will let’s say on their 23.25 two companies, sometimes just one, sometimes it’s three or four, you know the most prolific ones but they do that with a very small number of opportunities. We have, I have been working with now a few dozens of companies so we have seen things go well, we’ve seen things go wrong, so we have a sort of a box full of case studies in our mind that we can share with them and explain and we are here not to tell them what to do but to approach them in a positive way to give them our take and to, and not that we will always do what he wants to do, that’s why we are less focussed on, or less have control through a tight agreement, and we will always get quite a lot of rights as an investor but as soon as you have to look at the contract it means you have a problem so it’s very important to be able to earn the trust and what has been great for us is to see entrepreneurs come to us and ask us to get even more of our time, even the example of a company I invested in earlier which is Goop in the US, the lifestyle brand started by Gwyneth Paltrow where I first invested alongside, we first invested alongside NEA, a very large US fund, first I was an observer on the Board and then there was a next round I was asked by the Founder to become a Director of the company. So when it’s that kind of relationship that’s great so we are not forcing ourselves on the Board but it’s more the entrepreneur asking us actually can you give us more time.
Elliot Moss
You look like you enjoy yourself without a doubt and it’s nice when things, you know, you have your, the fact that you are into your fashion and the fact that you are working with Farfetch and with Goop and Gwyneth and so on, it’s no coincidence. Is there a best bit or are you always in a state of ecstasy?
Frederic Court
No, they are things at any point in time they are, everything is going well, there are things going less well. We, I could say that there is relatively little in my sort of daily life that I don’t really enjoy so some of it sometimes is a bit painful when you are maybe you know stuck in a meeting where you feel you shouldn’t be but overall we are very, very fortunate. It’s hard work, it’s very hard work and that’s where there is, there is a side where we talk about all the things that are going well but also a lot of things that are not necessarily going so well and that we are trying to be very consistent with when things are not going so well to be there to potentially help a company that is not scaling you know find a home, to be to help a Founder that’s not really scaling to bring people on board or find someone to replace him. We are trying so and these things usually the company is doing very, very well don’t end up taking so much of your time.
Elliot Moss
No. And just really quickly because we are going to run out of time before I ask you your song choice. If ten out of ten is every investment returns what you want it to return, what’s the truthful answer from your perspective in your last five/ten years or so? Where ten is perfect, what’s the percentage of the ten as it were that you have achieved success on?
Frederic Court
The, it’s, the key for us to have some investments where we end up, we are building a portfolio so it’s at the end the average will matter but we need to have companies which are not ten out of ten which are more like twenty out of ten. The likes of Farfetch. So that’s what I keep on mentioning to our team, we need to find more companies like this.
Elliot Moss
Twenty out of ten is fine, you’ll have a couple of fives or even twos but that’s okay.
Frederic Court
Yes of course.
Elliot Moss
It’s life. Listen, thank you, thank you for your honesty, it’s been lovely hearing from the other side of the table and I am sure that you are going to get lots of people connecting with you saying hello Frederic I think I need your help and your money and your contacts and all the other things that you bring and the wisdom. Just before I let you go, firstly thank you for spending time with me. What’s your song choice and why have you chosen it?
Frederic Court
Just also to mention people can contact me on Twitter on @fcourt that’s another way to contact me directly. The song choice is Canterloop from Us3. It’s a song that’s really important in my life at the point where I became, I built a sort of a late passion for music so in my early twenties, so that album in 1993 was a key album, I have seen them a few times in concert in different cities, in London, in Milan and it’s I just love this song and I listen to it very regularly.
Elliot Moss
Here it is, just for you.
That was the song choice of my Business Shaper today, Frederic Court. Talked about entrepreneurs needing to be contrarians, that they usually are contrarians. That they have to do things that are almost impossible and that from his perspective to be useful to entrepreneurs he never stops learning about what it is that they are involved in. Above everything else what I really took out of Frederic was, you need to be passionate. Really, really good stuff. Do join me again, same time, same place for another edition of Jazz Shapers, that’s next Saturday here on Jazz FM from 9.00am sharp. I do hope you’ve enjoyed the programme today.