EP03 - Empowering Entrepreneurs: Insights from Henrique at Draper Startup House

EP03 - Empowering Entrepreneurs: Insights from Henrique at Draper Startup House

Imagine stepping into a space where hospitality, education, and investment all come together to nurture creative minds. That's exactly what Henrique, from Drapers Startup House, brings to the table. As part of a global network spanning 25 cities, Henrique offers a fresh perspective on how co-working and co-living spaces can cultivate a vibrant community for entrepreneurs on the move. He talks about the unique model of Drapers Startup House, their $2 million micro VC fund and how their acceleration programs are not just about financial backing, but also building a platform for growth for early-stage founders.

Ever wondered how a global spread micro VC fund operates? We take a fascinating ride with Henrique, as he opens up about the distinctive investment approach at Drapers Startup House. With 23 investments in just one and a half years, the fund is making waves in startup hubs across the world. But it's not just about funding. Henrique talks about the priceless value of connecting startups to a network of 24 funds, mentors, and potential clients. His insights from his own experiences in business administration and innovation are a treasure trove for anyone stepping into the world of startups.

Henrique's wisdom doesn't stop there. He shares invaluable advice for first-time founders, stressing the importance of a clear core value proposition and the role of customer feedback. He also gives us a peek into the flourishing tech startup scene in Portugal, highlighting the kind of startups they invest in. Wrapping up, Henrik emphasizes the power of mentorship in challenging tunnel vision and offering diverse perspectives, thereby empowering founders to grow stronger. So, whether you're a first-time founder or a seasoned entrepreneur, there's a wealth of insights waiting for you in this episode. Tune in and let Henrik guide you through the exciting world of start-ups and venture capital.

Transcript

Stewart Noakes: 0:46

All right and welcome to the next edition of Investors Circle. And here we have . All the way live from Lisbon. Wonderful to have you here. Mate, thanks for doing this. Please tell everybody a little bit about what you're doing Draper Startup House, sure sure.

Henrique Pereira: 0:59

Thank you for having us too. It's really awesome to be here with you, since my entrepreneurship journey started, also in your events. I love doing this this type of stuff with canopy and review specifically. But, yeah, my name is . Yeah, I Draper Startup House.

Henrique Pereira: 1:16

Drey for Startup House is not only a venture fund or a micro-BC, as you are going to know a little bit more about the fund but we also do weather stuff. So we actually started by being a network of co-leading spaces for founders and entrepreneurs. So basically, if you were traveling the world as a founder and you wanted to be in a place where you could meet other founders, investors, like-minded people, you could come to a Drey for Startup House. So that started in Asia. We grew for five countries in Asia, including India, the Philippines as well and right now we have spaces in 25 cities around the world, and now this can be co-leading or co-working spaces. So that's one side of the business. As we were meeting a lot of founders and startups throughout these spaces, we then created a micro-BC for early stage founders. So basically, to help these co-community of startups that were working with us, and we are giving them smart money. We call them smart money, which is basically small tickets for them to start their endeavor as a startup founder In an Excel Drey for Startup House.

Henrique Pereira: 2:41

It's a network of spaces for entrepreneurs and founders. We have a venture fund. We also run acceleration programs, and that's something that I'm really focused right now. Actually, in Europe is running the acceleration programs for early stage startups. So right now, we are running two types of programs, one more short-term and one more long-term, and all of these things actually align and we have a synergy around these three pillars in our business, which is the hospitality, the education and the investment, because if we collect the founders in the hospitality, we get to know them. Then we can know which type of help and assistance they need and then they can go to our programs or maybe we can invest in them directly if they are investment ready. So it's a really cool ecosystem and it's global, which I like and do you find people move between the different places.

Stewart Noakes: 3:34

Yes, so you get somebody in India that turns up in Lisbon, and how does it work?

Henrique Pereira: 3:38

Yes, that actually happens a lot, so I get a lot of context of people that stay in India, in Singapore, in our spaces. They really like the ecosystem there. The old environment of the house was amazing for them and actually we have both people that were already traveling to Portugal and I stayed in the Drapers startup house. I will connect with the founder there and see if I can pass by or you can sleep there. And we have the other double people that actually go to our website and decide their next destination based on where Drapers startup houses are around the world. So those are the hardcore Drapers, I would say.

Stewart Noakes: 4:18

But yes, and what's the pitch level for this? Is this like frat house stuff? Is this like hostel stuff? Is this like boutique hotel stuff? Where does it sit?

Henrique Pereira: 4:27

Yeah. So I would say that in every country there's a different value proposition, also because of the target. So, for example, in our space in Bali, it's very digital, nomad oriented and also remote workers and, of course, startup founders. But you would get a really chilled vibe like a co-living or a hostel like Celine or something like that, while in Singapore it would be a little bit more I would say serious, because a lot of the trips are more like two, three weeks to find investment or go to a specific event or something like that. But I would say never high price. So we are not a boutique hotel or something like that. In Lisbon, for example, we were a hostel with private rooms, so we tried to get the private room. So of course, we know there are people that prefer that privacy. We also had some shared rooms as well, but affordable prices. So I would say more into like a top-notch hostel, I would say.

Stewart Noakes: 5:28

So I guess maybe you can explain a little bit more about the pieces of the fund, but it sounds like the knowing the entrepreneur is a key part of it. You're getting to know people and they're moving around between places where you've got this kind of footprint of understanding. But how does it work?

Henrique Pereira: 5:42

Yeah, so the pieces of our funds it's a really broad piece is actually because, first, we are a global remote fund, so that's already. We don't have a specific region or country that we invest on. We try to invest in globally, basically, and what allows that is the fact that we have these spaces around the world. We have fetch points around the globe which help us have access to better deals. So that's the first thing. We have in-reaks everywhere. Basically, going to events, there's only one at Reek.

Henrique Pereira: 6:17

I know that there's only one at Reek, going to events, screening deals, having these acceleration programs as well. So that's the way we find the startups, as I mentioned a little bit before. So agnostic or not buying it to one region. We call ourselves the global remote micro VC, also an agnostic in-sector, so we don't have one specific sector that we invest in. Of course, we focus on growth in the industries and sectors that are kind of booming. So, for example, we got 23 investments in these first funds and we see a tendency for blockchain, ad tech, healthcare, fintech, but also, as I was saying, agnostic in sector. We are a micro VC, so really, early stage precedes funds. We do tickets from 25K to 150K, but I would say our sweet spot is on the 50K tickets. So really, really-.

Stewart Noakes: 7:22

Thomas, you're a shackles. What is it?

Henrique Pereira: 7:27

So small tickets for early stage startups when we look into a company and now the thesis is more first, meeting the founders. So knowing the founders is really important for us and we are able to do that with all of these ecosystem that I mentioned before. Second, as I said, growth industry. So it has to be in an industry that we think that will give us a return on investment in the future. Of course. And the third, and this is an important one, it's a proof of concept. We call it traction, but don't get it as traction, because we know that we are talking about early stage startups, so we are not expecting huge numbers in revenue or even clients. But when you say traction, it can be a proof of concept, can be pilots, can be one or two initial clients, so that we know that you have an MVP in place, that you have a problem that needs to be solved, so you have these first or two clients, that you are building partnerships. So it's that type of traction that we are looking for.

Henrique Pereira: 8:34

So, proof points. Proof points.

Henrique Pereira: 8:35

That is the proof points Exactly, so I would say that. So an MVP in place, it's a little bit something that we look for as well. So we try to basically connect all of these dots being connected to our ecosystem, being in an industry that we like and then having these first MVP in place, and that's a little bit the thesis of our fund. I know it's a little bit broad, but also, as we are working with different spaces, a lot of startup founders, acceleration programs that are not binding to a sector as well we also try to be broad with these first tickets.

Stewart Noakes: 9:17

So I mean, every investor is different and every fund is different in terms of the way it wants to participate after the investment. So what's the JPEG startup house approach? Do you guys jump into a board? Do you give guidance? Do you observe, Do you take data? What do you do?

Henrique Pereira: 9:31

Yeah, usually we don't jump into a board, since we have also our tickets. Like, we have a lot of investments. So, for example, in this first fund, it's a micro VCs, a $2 million fund with one LP so really small funds and we we 23 investments in one year and a half. That's a high amount of investments. We don't have the bandwidth or the personnel to be on the board or even helping In that level the startups.

Henrique Pereira: 10:06

What we do and what we do with all of the startups, we try to use our strengths to help them. And what's our strengths? It's our network, it's the connection that we have. We are inside I didn't mention this, but we are inside a venture network of 24 funds called the DRIPPER Venture Network. Basically, and being inside this network, we can connect the startup to weather investors for phone investments as well. By being this international network, we can connect them with a lot of partners, potential clients, mentoring personnel that can help them in their journey as well. And, of course, being connected with Team DRIPPER, you also get access to some companies and to some personas that can help you in your journey.

Henrique Pereira: 10:57

So I would say that our role as investors we don't invest and run, we invest and try to be there and also be following up with you to see what you need. And we try to help you with what you need. And that's mainly and we see the experience with our startups, its connections, its connections, its mentoring as well and it's trying to find the right partners and the right first clients, big clients, for you, and we do that. We don't have a seat on the board, also because our deals are spread out throughout the globe, so it's also difficult for us to be super involved and present in one specific deal.

Stewart Noakes: 11:54

Okay, super cool. I mean, you must have such a lens looking at so many different things at any one time. I don't know how you process it. I mean, for people who don't know you at all, what's your background? What makes you great at this stuff?

Henrique Pereira: 12:06

Sure, actually. So my background is business administration. That was my bachelor, super broad as well. You were Catholic, right, yeah, yeah, yeah, yeah, it was in Catholic in Lisbon, so broad as well, because when I was in my high school senior year, I didn't know what to do. So it was that common problem of a teenager that I don't know what you do in a company as well, because I didn't want to be a doctor or a lawyer or an engineer and those are the ones that you kind of know what they do on the business side. I don't know. Maybe, of course I did an internship in a consultancy company and you kind of know what they do on the audit side or the consultancy side.

Henrique Pereira: 12:48

But when I was 18, I never thought about going to an entrepreneurship or startup. So my master's was actually in innovation in the Netherlands. So that was kind of I was narrowing it down so because I already knew I wanted to be in part with with the innovation, part of stuff and kind of things that move the world, but actually the master itself was really theoretical. So a lot of articles, hypotheses, so I was more expecting, like working with companies and innovations, and it wasn't that at all but actually gave me a lot of not only strengths but also some expertise on some fields that I was not expecting, and I think that's kind of shape a little bit the first path for me of knowing that I wanted to be involved with innovation and companies that were disruptive, because we studied about the continuous innovation and the disruptive one, so, for example, the move to iPhone and then the continuous would be iPhone 2 and iPhone 3. So the interest by radical innovation started there.

Henrique Pereira: 14:03

After that I changed, so I didn't follow that path. I went to a sales company in San Francisco, a software sales company. That was really good for me because I think to have the sales job as your first job is really good. You grow a lot, not only talking with clients but reaching your quotas and being able to communicate not in your first language, because I'm Portuguese and that was really good.

Henrique Pereira: 14:34

And then, yes, I got into DRIPPER startup house after the sales job, actually because of a recommendation of friends, because they were planning on opening a location in Portugal. We tried theory prior DRIPPER startup house we rebranded was tribe theory, and then it's history. And then we opened a Portuguese location as the co-leading space. So more focus on the operation side on that part. Then we opened the VC fund, so working on operations and startups, we were doing a lot of events, pitch days and mentoring sessions so getting to know a lot of startups and founders as well. Then we opened the education part, so the exploration programs. That's where I am right now, five years later, it's more on the startup scouting in the exploration programs in Europe. So that's a little bit of my background.

Stewart Noakes: 15:29

I remember our first meeting in IdeaSpaces when everything was also very new for DRIPPER and Lisbon and stuff. It seems like a million years ago now, but of course there's a COVID in between, so we met just before that and all the disruption that went. I guess a question I should ask you at this point is what sort of things are you seeing come to you right now? Is everything AI? Is that the buzz that you're hearing, or is there other stuff in the world other than that right now?

Henrique Pereira: 15:54

Yeah, so on the pitch deck, I'm going to tell you a little bit more about my recent experience. So we had an exploration program four months ago and we had a lot of applications where we would get the pitch decks and AI is always there. Even if your company doesn't do AI, it's always there that they are powered by AI or they are solving something with AI. We actually don't like that catchphrase, because you can be an AI company and that's awesome, but if your focus is not the AI side and you're just putting the AI there to be catchy, for us it's not basically, but a lot of things that I'm seeing actually it's in the last one, a lot into the healthcare side a lot of companies trying to solve mental health problems and issues being that we're making more accessible the contact with doctors, having a half with AI that does this following. A really interesting one actually was the one that kind of won our acceleration program five months ago and went to the United States to be the following acceleration with Draper University in Silicon Valley was a journaling app, and that one is using AI and large language models. A journaling app. So journaling a diary that you write every day and the AI would actually study you and sing like maybe maybe you are facing like a burnout because you are following this. You are saying this and this and this, and the last three months you are more matching this, so maybe book an appointment here. So basically analyze what you are saying and give recommendations about it. So that was cool.

Henrique Pereira: 17:47

A lot of education platforms as well.

Henrique Pereira: 17:49

I think that came with COVID so a lot of the remote thing of having education accessible to not only to everyone, but in platforms or at the distance.

Henrique Pereira: 18:02

So we are still getting a lot of those startups and actually, as we are a very education oriented company, we actually invest a lot on net tech startups. So that's the majority of our percentage of our portfolio is at tech startups, because that's also a field that we feel that we can help with, because a lot of the people in our company or build a startup in that field or no, or we are a startup in that field as well, so we can help them with that as well. But also, of course, a lot of AI startups AI to write articles or soccer news we have one of that as well and marketplaces they are still out there and we actually had the second place was a marketplace to find specifically for restaurants in Portugal, because that's a problem to find waiters, chefs so they are a marketplace specifically for that and they are actually doing a lot of partnerships and after our program they found their first clients and they are open, going right now super smoothly. So some marketplaces as well.

Stewart Noakes: 19:20

Amazing. You cover such ground. It's just incredible how many different things you are talking about there in one little segment. Just before I get to the last question of today's stuff, I wanted to say thank you so much for the reverse pitches you've done at the Canopy events. I don't know how you feel about them. Actually it's a good thing to get out there, but for me the stuff you've presented has been so good. But how does it feel to do this kind of reverse pitch stuff?

Henrique Pereira: 19:42

It's super cool because I'm always on the other side. So, even if I'm a judge on a big session or and just on the other side of the classes or we seem to be entrepreneurs, I'm always on the other side and actually like also to present. It's something that I've been liking doing in the last years. So I really like to be on the founder side and actually presenting. It's not my company, but I kind of see it as my company as well. So I really like to be on the other side and try to expose can I help the community?

Henrique Pereira: 20:17

Because that's something that we have and I think you feel that in Portugal, in Inuy, is when the ecosystem is super collaborative and not competitive. So we always try to do these events and teach sessions to help not only the startup founders but even people that maybe they don't have a startup now but they are thinking about it, or even in pastors, and try to get this community together. And yeah, I love to be on the other side because then it's so much easy for the interactions, because people already know what I do, because it's not that easy to explain that you are a fund with a hostel, with a university, so it takes time to be.

Stewart Noakes: 20:53

It's not a straight line story, right?

Henrique Pereira: 20:55

Exactly so it takes time in a networking event to explain to you what I do and then we can see the synergies there. So it's much easier if I do a reverse pitch and then we have the networking session with the PISA, the canopy ones, and then people approach me because they exactly know what I do and how can I help them. So that makes it easier. So yeah, in a nutshell, I love doing the reverse pitches.

Stewart Noakes: 21:19

Yeah, and it's fun because many of the reverse pitches are really ugly, partly because the investors aren't used to giving these kinds of things, but you always make it look real good, brother, he's come up pretty well Very well, thanks for that.

Stewart Noakes: 21:33

So the final question today they're just you see so much and particularly early stage ideas. I just wonder if you could share with people what your top tip is for a first time. Founder watching this today, who's going to be raising funds for the first time Maybe come into a micro VC like Draper. What advice do you give them?

Henrique Pereira: 21:51

So that's a very common question and my answer changed and I can be honest about it it changed when I went to the education part, so the acceleration part. So my top I will give one or two, but my top advice would be to focus on your core value of proposition. So a lot of the founders that come through our programs they think or they try to solve the world's problems or they think that by telling us that they want to serve a huge market, they are actually like it's more interesting for us because there are more clients there. So I'll give a really practical example a startup that's at an app to solve mental health problems. And which problems do they want to solve? And they said all of them because they think if we solve all of the problems, we have much more clients to serve and it's even better.

Henrique Pereira: 22:46

So it's burnout, it's Kaiser Free and it's ADHD Okay, perfect. And our advice is only focus on one. So focus on burnout now. Be really specific on that. Study your value proposition for burnout, see your 10-some song and focus on that, because then to find your ideal customer will be easier, the partnerships there to really be good on something, and then you can do burnout and ADHD. And then you can do burnout and ADHD and something else, but excel in something niche to start, because it will be much easier to find your first customers, iterate with them. So that goes aligns with the second thing, which is evaluating your idea. So and startup founders a lot of times do that being a sole founder or with the co-founder, they get super in depth to be their idea because it's their baby. So they just work on their idea and think about it because they think they know better. So they don't talk with potential customers and get that feedback loop from the customers, which is really important. And then the first initial customers, because you need to understand who's gonna buy your products or service. So the other thing that I would say the first, of course, it's narrow it down, don't try to go too big. Narrow it down to a core value proposition and try to excel in it. And then, of course, if you are successful, you can expand.

Henrique Pereira: 24:21

And the second one we use to validate your idea with potential customers initial, like that, the initial customers are really important and there's always a story that I tell that I heard in a podcast of Airbnb that they usually went to the house owners, the first house owners in San Francisco and asked for feedback. What were they doing? Well, what they think they could do better. And there was actually a client, so an house owner that had a Bible like an Airbnb Bible with a lot of recommendations, and think that because he was super into the idea and there are actually a lot of things that are in their platform now that came from that client. So a lot of times, clients your initial customers they know what the product needs, or something like that. So listen to your initial customers, iterate with them and get that feedback.

Henrique Pereira: 25:15

Well, and the last one would be seek for mentorship and advice. I think that's important. There are a lot of good mentors out there and it can be a startup on, it could be an investor. But people that gives you different perspectives, because maybe some of them already went through the road walks and the pain points that you are going. Maybe some of them have a different perspective that gets you out of the tunnel vision that you are going right now. And we see that a lot in our programs and I'm not saying we as a mentors, because we always call different people to be mentors and that's the third thing and having a mentor or seeking for advice. It doesn't make you weaker as a founder when we make you stronger. So I would focus on these three Narrow it down, validate your business idea and seek for advice.

Stewart Noakes: 26:07

Amazing. Thank you so much. I guess we call that a wrap on today's interview, but thank you for sharing all your thoughts and insights, particularly with the spectrum of things you'll see, and that's incredibly valuable to everybody. Appreciate it. I look forward to seeing you for Web Summit and next time I'm in Lisbon That'd be fantastic.

Henrique Pereira: 26:21

Thank you so much. The IIT was full by this time. It was a pleasure to be here and, yeah, I'm really excited to see you in person.