5 lessons on frameworks, investing and networking with Ed Hooper (Co-founder & CEO - GXE) | Ep175
Key takeaways from Episode 175 of The Startup Playbook Podcast
Hello everyone 👋
Welcome to The Startup Playbook Newsletter where I share details from the latest podcast episodes as well as diving deeper into some of the topics, themes and insights discussed on the podcast.
This week’s guest is experienced entrepreneur & investor Ed Hooper.
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A little history on Ed Hooper
Ed launched his first idea, a farm management system called Soak, which was a university project between 3 friends as part of Microsoft’s Imagine Cup competition.
Soak would go on to win the national and global prizes leading to winning time a trip to Silicon Valley to pitch to VCs and get a taste of the silicon valley startup scene.
After spending time as the first hire at Rome2Rio and being part of the Groupon team that grew from 30 to 300 people in 9 months, Ed launched Omny Studio, an audio management platform used by media companies and podcasters to grow their audience, reduce production costs and monetise their platform.
They initially launched a viral product called Sound Gecko before eventually turning that off to focus on the larger platform play. Omny was later acquired by Triton Digital.
Ed then went on to launch Cardinia Ventures, a Venture Capital fund that invests in hardware and software startups from pre-seed to Series A stage and counts companies such as Chornosphere, Edrolo and SpiceAi in its porfolio.
He is now the Co-founder & CEO of GXE, which is an all-in-one platform for Investment Funds, Family Offices and Syndicates.
Ed is one of the early tech startup founders in Australia and has a tonne of lessons and insights from this journey that he shares in this podcast.
Here are X key lessons from Ed on his journey so far!
1. How to validate your startup idea
The initial excitement when you get the spark of an idea is undeniable, but is it a viable idea that you should pursue?
In this clip from the podcast, Ed shares how the Omny team came together, the framework he used to assess whether it was an idea worth pursuing and even how they landed their first investor!
2. Lessons learnt from shutting down a viral feature
As a founder of a company, you’re constantly making decisions with limited data points.
Sometimes those decisions pay off and other times they don’t, but often times, those stories don’t get shared publicly.
In this episode, Ed shared some of those decisions that didn’t go to plan, including how they launched a feature, Sound Gecko, that went viral!
The product wasn’t in line with their initial plans however and they decided to shut this feature down thinking they could replicate it’s success with a much bigger product…
3. The risk of SAFE notes
When you’re fundraising at the start of your startup, one of the potential disagreements you can have with investors is on the valuation of the company, often when there’s no revenue or large amount of historical data to go off.
An easy (and popular) way of overcoming this is by using SAFEs (Simple Agreement for Future Equity). This structure allows you to defer the valuation to a later date, but provides some structure in place to incentivise your early backers by having a valuation cap and/or a percentage discount against the future valuation of the company.
Sounds like a simple solution where both sides win right? Unfortunately this can become an extremely unhappy situation for the company, particularly if you stack multiples SAFEs on top of each other over an extended time period, meaning the company would dilute a significant portion of their shares.
It’s something Ed faced with Omny Studio and in this clip he shares how they solved for this problem!
4. How to network your way to an acquisition
It takes a village to build a startup. Whether it’s potential customers, investors or team members, having a strong network can be the difference between the success and failure of your company.
Ed took this one step further, by building strategic networks with potential acquirers of his company, something that eventually helped him sell Omny Studio to Triton Digital
5. The value of having strategic investors on your cap table
Speaking of building relationships, one way to get buy-in from strategically important people and organisations in your industry is by adding them to the cap table.
Having strategically relevant angel investors can help you accelerate industry insight and customer acquisitions/partnerships but also having experienced angel investors in your corner can help you navigate the challenges that come from operating a startup.
Bonus: Launch of the Playbook Ventures Rolling Fund on GXE!
As mentioned during this interview, about 18 months ago, I officially launched an investment syndicate, Playbook Ventures, to invest into pre-seed and seed stage deals.
Our goal is to be the best performing early stage investor into high growth startups that I believe will be the next unicorns from the region.
So far the investors in the syndicate have been many of the guests that you would have heard on the podcast over the last 7.5 years as well as a select group of people from my broader network.
To date, out of the 7 companies in our portfolio we have already seen some great traction with the acquisition of the first company we invested in, another company (Kismet who you would have seen on the podcast recently) who we invested in at the Pre-seed round 12 months ago and just this week announced their 12.5M Seed funding round which we also participated in as well as winning allocation into highly competitive rounds such as one recently where we won allocation into a deal that had 3 times the amount of committed interest for the amount they were raising.
I am excited to announce that we are raising a Rolling Fund on the GXE platform to double down our focus on investing in exceptional founders going after ambitious opportunities at the earliest stage.
If you are a founder currently raising your pre-seed round and would like to speak to us about your business Or if you are a sophisticated investor, wanting to invest into great early stage opportunities you can apply to invest directly with us. To get in touch, head over to playbookventures.com.au or you can reach out directly below
This information is shared for information purposes only and the opportunity to invest is currently only available to sophisticated investors. Investing in this space is high risk and as always you should do your own due diligence before making any investments!
The rest of this interview is jam packed with even more insights and lessons from Ed on his experience both as a founder and investor.
You can find the full podcast episode on all of your favourite podcasting apps by searching for “The Startup Playbook Podcast” or you can find all of the links here:
YouTube (video) - full episode below!
Full episode:
Thank you for reading The Startup Playbook Newsletter!
Keep an eye out for Episode 176 with Luke Anear, the Founder & CEO of SafetyCulture on his journey to building a $2.7B company.
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