Fintech Institute partnered with Fintech District and Level 39 in the creation of a new course called How to Invest in Early-stage Startups. Together they created a course that explains how to invest in the best early-stage startups, choosing the new entrepreneurs that will lead the future of money. Gianluca Guerra, General Partner at Purple Hat Capital will be a professor and gives advice and insights on angel syndicate.
To kick this off, could you please give us a brief introduction about yourself and tell us where are you coming from?
My name is Gianluca, I’m Italian but I spend half of my time in London, and other places all over the world, to find startups and help my investors (Family Offices, Private Fund, VC funds, Corporations) as a Venture Capital advisor.
I came from traditional finance, I’m also a co-founder of an alternative investment boutique, where, obviously, I manage venture capital investments.I have been involved in startups since 2010, thanks to my role in Italian Young Enterpreneurs Association, “Confindustria Giovani”.I studied Information technology and finance so, I decided to work in Venture Capital.
What is and how does it work Purple Hat Capital?
Purple Hat Capital is a growing community of business angel investors based in London, with a focus on finding the best fintech and blockchain startups from around the world, while, at the same time helping people who want to invest in startups.
Altogether we identify between 10-20 startups each year which are ideal for investors. These startups need seed capital, and we analyze and evaluate these startups to ensure we have identified the very best.
Ours is a community of smart money focused on investing with other capital and venture firms focused on what will be the next big thing. Our expertise helps investors make the best choices available among many investment opportunities. Once we pick the best opportunities, we enter in the seed round and wait to find new investors in series A or look for a profitable exit after 24-36 months.
Where top VCs are investing in fintech?
We work closely with Level 39 in London and the Founder Institute in Silicon Valley.
I think London is the Fintech Capital. Most important VCs all over the world come to keep the best opportunities, thanks to the presence of the most important banks of the world and in Canary Wharf.
There are many interesting startups around the world but, if you’d like to be deep inside Fintech, you must be in London. If you are a Founder, you should have a “Dual Company”, to develop your project in your country and move the headquarters to London and in the rounds ahead in Silicon Valley.
Brexit could be a great opportunity to move your company to the UK. London will become the most important Fintech district of the world, it is very attractive for the entire startups ecosystem because the capital market is amazing. It’s the country on the European continent closest to Silicon Valley mindset.
What to watch for in fintech in 2020?
2020 could be the year of massive adoption for Fintech, many startups are the biggest. They receive millions of investments, in some cases billions.Also, I think next year could be the year of Blockchain; Security Tokens will change the market and literally disrupt some financial services.
The real frontier should be DeFi, Decentralized Finance, a really young industry with a huge potential growth.
What are the skills a business angel that want to invest in the fintech space should have?
In all investments, you must be focused and concentrated. Understand the market and the trends of the market. The common things about that market.
If you’d like to invest in startups, in angel investing, you must have all the skills and information because these are not public companies and you can’t find information about them on Google.
You must be an insider.
You must talk every single week with the founder and the genius of the company, be involved in the events, summits, and committees, to understand what startups are doing.
It’s a huge amount of work for a single investor.
That’s why it’s very important to be part of a syndicate where you can share skills, information and find a company that can help you in every single phase of investment from beginning to exit.
Can you tell us about what sort of companies you are investing in?
I can’t disclosure my investments outside Purple Hat members network.
It wouldn’t be correct for those who pay membership fee and actively participate in our angel syndicate. What I can say, is that we are involved in 3 sectors that are growing rapidly: FinTech, Blockchain and DeFi. We just had an exit and one startup grew +420% in 7 months.
At the same time, I’m personally very interested in Cell Tech startups and Algorithms startups. I trust in these industries. They are trying to solve many important problems in human life.
If you don't want to miss the opportunity to meet and know more about Gianluca and his activity, remember to register and subscribe to the How to Invest in Early-stage Startups course, deadline is Mar 6, 2020.