US trip: learnings & insights by Tim

I’d like to preface that the following is solely my personal perspective on my experiences.

We felt like we needed a breath of fresh air to recharge, gather inspiration, and come back to our members with new ideas and renewed energy after deciding to put our in-house product on hold in March. We also wanted to break out of our local bubble, as operating within the relatively small Nordics & Baltics market could potentially lead to bias without a broader perspective. Since we also see great potential in the late stage secondary market, we thought the US would be the perfect place to explore. Additionally, we had a new, ambitious idea that we wanted to validate as soon as possible, and since it pertained to the US market, it was the perfect timing for our trip.

To put our goals in a bullet-like format, they were:

Allow me briefly cover all of those in depth below.

Living and doing business here, I've noticed that things are done differently on the other side of the ocean. Processes differ, operations are built alternatively, and people communicate in another manner. However, during my time in SF and the Silicon Valley, attending the events of Salesforce Alumnis, LP events of local funds, and spending time with GPs, I realized that the difference is not that big. People use the same business models, build the same processes, and communicate in the same way (most of them using American-English).

What is different is the speed, and even more importantly, the volume of things. Of course, a lot of this comes from the high density of tech people in SF and the Valley, but even considering this - it is impressive. During the time we spent in Stanford (kudos to our member Yegor Denisov-Blanch), we heard some stories about people raising rounds without leaving the library, how newborn companies with zero traction can raise a $2m round in several days, how YC companies close their rounds on insane valuations even before the Demo Day took place, how funds are fighting competition to get the best founders, and how founders are doing all they can to fail as fast as possible not to waste time (or succeed).

When it comes to practices, my main learning was that business is transactional. You need to offer something if you expect anything in return. Life dynamic is so fast that there is no time for one-way business relationships in the US. It might sound bad, but is it really?

Finally, on this topic, I would also add that the US is a capitalist country for a reason. Compared to the EU and our local market specifically, US investors and culture is all about making money. While we try to consider and, in many cases, prioritize positive impact while investing, the US market is counting $ multiples as a priority. I am not saying they do not care about, let's say, climate, they do. But if there is a choice, there will be no second-guessing - $ is the priority.

We have done two secondary deals with our members before, Bolt and Katana. We also feel that, during the slow market, top secondaries might be a good way to diversify.

In Silicon Valley, we met with several people who actually have a good portfolio of secondary deals. Among others, we had great sessions with GPs of Practical Venture Capital and TMT Investments. By the way, the latter one was one of the very early investors in Pipedrive and Bolt. They love Estonia over there!

As a result, we now feel like we have access to US top secondaries, with a decent discount to beat the market offering. To give you an idea about the quality, we are talking about SpaceX, Stripe, Miro, Canva, Careerist, and others. We are currently arranging follow-up sessions to learn more and understand the best way to deliver those to our members and see if there is any interest.

In case of interest, we can potentially talk about participating as an LP through the fff.vc SPV in several late-stage funds, which are focusing on secondaries. The last part is simply thinking out loud.

In the previous section, I mentioned that US funds invested in Bolt and Pipedrive, which made them a fortune. This is something we have been exploring further. We have seen some interest from US funds and angel networks in our deal flow, although it's moderate at this point. We have identified two segments of potential investors:

Our aim was to identify and get acquainted with potential investors and put the ball in motion. We have achieved this as we are now talking to about five organizations that have expressed interest in European deal flow and could potentially assist us in aiming for higher allocations or simply present more value to our founders. Over 70% of local companies will be looking towards the US at some point anyway, so why not get them early with our help.

Since day one of fff.vc, we have been looking at building our own product. We are always seeing a problem, drafting a solution, and doing our best (which is common to US culture, as I mentioned before) to fail fast. This mindset has allowed us to quickly realize if an idea might fly or not.

Our latest idea came from Akim's experience managing US-based family offices - a digital trust management solution. I did not have to think twice once I heard of it as my legal background got instantly interested.

To put it simply, trust is an arrangement whereby a person (a trustee) holds property as its nominal owner for the good of one or more beneficiaries. It is a common way to optimize taxes as holding assets in trusts allows you to avoid certain taxes. However, the whole concept is so old and outdated that as things stand, there are big problems with:

To get clarity and validate our hypothesis, we attended the Nevada Trust Conference and spent two super-packed days validating. We were able to network with the biggest names in the industry and got access to top attorneys. It was a great (and heavy) experience.

Since not much time has passed since we got back, we have not done a retrospective or made any decisions yet. We will keep you in the loop. I am also happy to address any questions you might have.

Aside from work, we spent a good time with local people, learning the culture, and enjoying deep conversations. We traveled in a van through Big Sur - wow. We spent a night in a proper Motel in Nevada on the way to Vegas and bought new phones because Akim lost his while taking a ride in Six Flags amusement park, and mine started showing clear signs of tiredness - damn this price difference with Estonia, wow.