I for Investing: Merging Tech and Investing

Matt Warcholiński

I know that this is really difficult in your business, working in MNAs, doing the exits. It's a lot of meeting, a lot of pressure out of time, spending with the clients on the buyer and selling side. You have pretty good background, I would say. Like, I read that you were involved in more than 60 transactions with an overall value of above, like 35 billions of euro, which is huge. And what is the most interesting part for me, you are involved mostly, mostly in a technology type of sector, which is my point of interest. So currently you are focused on TMP, so technology, media and telecom area at Saxon Hammond. And I'm here to hear more. Like, are those industries somehow related to each other? Therefore you connected this in one basket. Or how why is it so?

dr Nicholas Hanser

Yeah, first of all, thank you. I'm really flattered, but it adds up when you work a long time in the industry. I started out 18 years ago, right. In banking at that time at then very renowned place, Credit Suisse, First Boston. We're focusing a lot on tech transactions at that time. Then worked at Jefferies and BNB Piper, spent around eight years down in London, which I really enjoyed. And yeah. And then for personal family reasons and so on, families here from Munich. I came back around six years ago to my native Munich. That's why welcome. Always happy. It's really only later in my career I really had the opportunity to work in Munich, because when you look back in Munich and I grew up here, could have probably made a lot more money if I had just invested in real estate and just went surfing on the easer. Would have been probably a bit easier than all these hard work in M and A and corporate finance. But it developed very nicely. And now it's really a hub of, as you said, of technology companies and a lot of investors also here in the space.

dr Nicholas Hanser

And yeah, as you said, rightly, Maximilian Shaza, where we are, I mean, a lot of investors are just nearby. So it's very nice. And then around four years ago, Christian, who's the founder of our boutique, he came to me and said, hey, we want to open like a tech practice. Do you want to build it up? And I thought it was a great opportunity in a company where they basically are not focused on more. The German traditional mid market, right? I mean, sometimes people who don't want to be a bit me call it a bit boring, but the German mid market, I mean, like combustion engines, real estate, industrial companies and heart of Germany, that's a bit the stuff that the colleagues are often working on. And these, I think, are super interesting things. But it is a bit different when you work with technology and younger companies and growth companies especially. And for that reason we basically said, look, let's open a Munich office and a small London office and let's focus, have a team focus purely on these kind of transactions. And yeah, TMT, I mean, as you already mentioned, it's a big sector, right?

dr Nicholas Hanser

TMT and the T, technology and media, telecommunications right at the end. I mean, it's a sector where you have a lot of growing sector that's already great. Some parts, for example, in the automotive industry, unfortunately they are shrinking TMT. There's always something going on, either telecoms or the technology part. So it's a pretty wide sector. My title set of technology, we're focusing mostly on the first T. Nevertheless, there's lots of stuff happening. I mean, there's lots of innovation as well in the sector, as you know. I mean, here you see it with podcasts and also with companies who are coming out of nowhere and suddenly shaking up industries, established players. There's always something going on. It's also a sector where a lot of younger people work. It's not as established as like when you look at old Germany, when you look 20 years back, you had the Ziemens, you had the buyer, the hooks, whatever it was, this old Germany. Now you have a lot of companies that you hadn't probably heard of three years ago and suddenly they raise hundreds of millions and soon to IPO on Nasdaq or be it Euronext or Deutsche Gaza.

dr Nicholas Hanser

So it's quite an interesting sector from that perspective. Also in this sector there's a lot of impact, right? I mean the products, when you look at the products that are basically done in technology, it's something that everybody uses. I mean, we both have obviously iPhones, nearly everybody except people use Samsung phones. But I mean, nowadays it's not like you hail a cap anymore. You go on, you're on your app, check into a flight book hotel and this will be more and more now with technologies, and I think we're going to talk later about that emerging technologies that are coming out of all this. There's always a huge impact in our daily lives and about billions of people. And obviously the economic significance we talked about at the beginning about Munich, and it's not only Munich, I think it's many cities. When you look at Berlin 30 years ago, when I studied there 20 years ago, it used to be a very cheap city, now it's very expensive city and there's a lot of stuff going on, a lot of startups, a lot of change and a lot of young companies and a lot of entrepreneurial energy.

dr Nicholas Hanser

And it's just an economic significance which is more and more valued also by the states. And they try to have an ecosystem where stuff works. So that's why I think the TNT industry is so interesting. I mean, it's basically a bit related in the sense that technology, right? What we're mostly focusing on, obviously is modern development and production of technology products and services, right? Hardware, software, and especially now, big sector cloud computing and media. I mean media as a podcast. We're doing media right now, right? All forms of content creation, news, entertainment, advertising. So it's a big thing. And telecommunications, obviously is the infrastructure behind all that. That basically helps the media via the technology to go to the end customers. So that's how they're all a bit interdependent and that's why it actually makes sense to have it in one sector. But TMT is basically what it was always called back in the 90s when he had the Dodge Telecom go public. Then he had the TMT departments. Now it's mostly technology. Same thing. Just sounds more fancy.

Matt Warcholiński

Okay, thanks for the detail explanation. Now I understand a bit better and you mentioned your role as a head of technology. I am wondering what are your responsibilities related to this role?

dr Nicholas Hanser

Probably let me quickly explain our setup. Our firm, we're basically around 35 40 people in total. Head office, as mentioned, is Berlin. Then we have a Frankfurt office and a Munich and a small London office. I'm leading the Munich and London offices. Our team here focus on technology and gold companies is around ten people in total. We work a lot across the different offices together with the Berlin guys, with the Frankfurt guys. Nowadays it's easy, right? You have a team chat, you're always reachable. You can used to be slack, now it's teams. Really. You can always hop on a call. People call you all the time on teams, whatever. So it works very well across the offices. And my job is basically to find opportunities in the technology sector to work with relevant companies on the M and A or fundraising side. So meaning that you are a very successful facial recognition company or basically been around since 20 years. People want to retire. We recently at that case, they say, okay, we want to now partly retire. Some people say, okay, we want a different challenge. Then it's our aim to sell that company and basically prepare the companies, the documents, prepare data rooms, prepare financial models and prepare the company just to be ready to be looked at by investors and then find the relevant investors or buyers.

dr Nicholas Hanser

In that case, we sold it to a strategic in Spain who do access management in gyms and airports and so on. So very complementary. And for us, it's also important to find the best match for the company, not only the price, but also do these guys want to keep the employees? What is their plan with them? Obviously you have different agendas, right? When you have strategic buyers, they're often a bit more natural to a couple of startups because strategics are often there to more respect for the people. Often financial buyers can also be the case, but sometimes you also have financial buyers who are just as they have to make a return and they're not from the industry. They look a bit different at some things and challenge a bit more the status quo and tend to be a bit more focused on sometimes cost cutting and so on. So our job really is to find money, be it for minority positions, which we then call a capital increase or fundraising or just sell companies in total. And I'm helped to oversee this team of around ten people, really focused on tech and growth companies in the wider sense.

Matt Warcholiński

Okay, thanks. And regarding all the stuff that is happening around the technology, are there any particular subsection stores in the tech that are interesting for you and you see that they have changed over the last years? Any trends that you see here?

dr Nicholas Hanser

That's a really good question. And I mean, the point is really we talk a lot to different investors because as you said, we are very close to the heart of the investor community. Also in Berlin, there's lots also in Frankfurt, and we have a lot of update calls with these guys and they ask us about do you have a company in this, in this space? So we get a bit of sense right at the end. Technology M and A is a bit like fashion, right? Sometimes people want like red color, they want green color, they want short skirts, they want long skirts. I can tell, only tell you what's the fashion at the moment, it shifted very quickly. It used to be a lot of ecommerce, for example, happening during the Pandemic, right? Ecommerce was one of the sectors that were super profiting from people staying at home. And that's why we also had a lot of supply chain problems. So also another thing was supply chain software, which was really much in favor. Right now it's changing again. And what we really see, what's a big thing currently with all of these discussion and we quickly checked on it like artificial intelligence, right?

dr Nicholas Hanser

I mean, Chat, GPT, that's a big move. Now Google is coming into that as well in this game. And I think that could be really the breakthrough moment for artificial intelligence used to be around for a very long time, but a lot of companies were trying it, but not really with success. And now you see really companies which are on the breakthrough. We basically recently worked with an international company called Kio Technologies in the UK. And we had a Boston fund investing there called Wave Equity. And they are basically focused on artificial intelligence, sustainability, supporting energy savings inside companies, especially energy intensive industries. So I think the idea to basically use artificial intelligence and combine it with good things which are making an impact on an ESG level for the environment and the climate. And so that's obviously great and I think there's more to come. When you look at the power of things like Jet GPT. People first like the power, but then they're a bit worried if they still have a job in three years, if that continues. So let's see, that's definitely the big theme, and investors are very open to companies in that segment.

dr Nicholas Hanser

Another thing, obviously that has to do with also the conflict in the Ukraine, cybersecurity. You probably heard that, I mean, at some stage Lufthansa, there was a complete blockage for some reason. No one knows what it was, I don't know. But at the end, cybersecurity people want to be protected. Are the account safe? Is my data safe? Can anybody access everything? What we're chatting here on teams from the competitive cybersecurity, it's becoming more and more important. And that's something where there's a lot of interesting companies. We're currently working, for example, on a buy side in Israel. And yeah, it's just a very interesting sector where there's a lot of high quality companies. But yeah, valuations tend to be high very quickly. Another sector is cloud computing. Cloud computing is something that also came up recently before you had everything on site. Now with cloud computing in the most recent years, it's just a huge demand for cloud infrastructure and services and it's a huge sector for investors. We have very predictable revenues, very thriving, and there's a lot of companies who focus on that where private equity and investors in general are looking very closely in general.

dr Nicholas Hanser

I mean, I now touched a lot on these things. One other sector, which I just quickly want to mention is also this whole impact. Investing became more and more important. I already mentioned ESG. I think there has a positive impact on society and the environment. People really appreciate these days. It used to be like 20 years ago, people didn't care so much, probably a bit. But now everything has to be really ESG focused in order to resonate with younger people, especially when you think about Fridays and future and stuff. And it's very important for a lot of people. So energy transition, everything has to do also, people appreciate energy a bit more. Before, it used to be, okay, it's coming out of somewhere. We don't know where exactly it's coming from, but it's there and it's cheap. But now there's a lot of discussions around newer companies. We recently worked, for example, with Vega Tech, which is a company that we raised 10 million from Strategic Investor, from Gota. It's an insurance company here in Germany. And these guys are basically a one stop shop for solar on your roof, meaning that you have a house and you say, hey, I want to be energy self sufficient.

dr Nicholas Hanser

Basically, they organize that you have these solar roofs on your house and then can save energy and probably even distribute it to your neighbors. And also, we recently, that is a while ago, already two years. We work with next wave. It's a company which basically in Germany the wavers used to be produced here and now it's all shifted to Asia, which is a bit of a concern. And here with Farnhover Institute they have this company where they basically said, hey, we're going to create more efficient waivers by that having more energy that we can create with the same surface and that's next wave, very interesting company. Zoria Hamco, one of the shareholders there who also brought us into this transaction, very interesting. Another thing that we're currently working on is also a hydrogen company. That's a big theme. There's a lot of stuff going on in the sector. You just need to find the right companies in general, what we see in this current climate, which is obviously not an easy one with all the tormentors going on there, you see clearly a focus on investors, more on investing more in established companies, right. Proven business models and recurring revenue streams.

dr Nicholas Hanser

That's what people like these days and it's just becoming a bit more conservative and instead of like basically saying we just focus all our money on some ecommerce business that was probably good the last couple of years, still is still going. We recently sold a company for beauty products. Soon going to be announced. Very successful company that's still going. But all of these guys, they have a bit of a problem that the demand has basically slowed a bit down. So I think what we're seeing right now in the market is just bit more focused, bit more mature look at technology companies and I think these days it's very hard to just on the basis of a PowerPoint to raise 10 million, but probably was a couple of years ago. Probably still possible.

Matt Warcholiński

You mentioned a really good point, of course, despite all the trends, which are really interesting. But I have one question that I wanted to ask you a bit later on, but I think now it's a good time to ask you. So the recent like ten years, the capital was and the money was pretty cheap and we saw plenty of maybe even 20 years because we saw plenty of startups burning cash like crazy like Uber or the Feudora and the Rocket Internet. They put a lot of money into those startups and they failed fast sometimes or they somehow said they have a success. But at this point where we enter the recession and the capital is pretty expensive. I am just wondering how this changed the outlook for investors. I mean, it's super difficult to start a company like Food or Uber today because nobody wants to give money on that, right. They are really consume a lot of.

dr Nicholas Hanser

Unless it's in the artificial intelligence. But nevertheless yeah, you're absolutely right. Look, I think what we saw also with the obviously I think what people also I'm over 40 already, unfortunately. But that also gives you the advantage of looking back and seeing all these trends and you clearly see that the last 20 years there were a lot of ups and downs but I mean someone who's a bit younger, they often only seen like trend going upwards, cheap money, low interest rates. I think what we're seeing right now is a bit of a normalization in the sense of interest rates which in turn obviously creates a lot of difficulties for more established players, even banks. But on the other hand you see that investors shying a bit away from basically debt heavy companies where profitability is far, far out. I think right now investors, what we're seeing and when we talk to them and when we see, when we come with proposals of companies to them, you see clearly that they are more risk aware and they really prioritize sustainable business models. Even during the pandemic that has a bit accelerated because pandemic was not an easy time for many companies and it was a bit of a washout in the sense.

dr Nicholas Hanser

Obviously people got a low state at in Germany and Europe in general but it was a bit of a washout of having only like strong balance sheet companies being there to weather the storm and just to a better position. And right now it's a continued focus on profitability and a clear path to profitability because right now in this environment investors are just seeking to minimize the risk because obviously the alternative is just especially in the US where interest rates are still higher, you just put your money on a bank account and it grows automatically. So they want to minimize risk by still maximize returns. So that's not an easy thing. So it definitely be a bit of a shift from a negative interest rate scenario. I mean there was a time, let's not forget this, where people had to pay once they had a lot of money and there's a lot of people having a lot of money on their accounts and they were just like happy to put it anywhere. Now always say hey just leave it on my account and it grows nicely by 5% per year which is a lot of money still.

dr Nicholas Hanser

And basically I think what we see currently is investors are looking for recurring revenues and because interest rates get more and more expensive it's just important that you have also the means out of the cash flow of the company to finance these interest rates and a couple of typical same factors which are still consistent. You just need a large and growing customer base competitive advantage, right? And I think it needs to be something in a long term trend. Right? As I mentioned, I mentioned artificial intelligence many times, machine learning, internet of things. These are kind of the things that investors are currently looking for. Just a couple of sectors which are really in focus right now. So as you mentioned, Fedora and Uber, I think these typical B, two C businesses, there's a bit of a downer but nevertheless, I mean these companies are still there and if you're big enough, you will also still got your funding. But it's very hard for younger companies to still compete in that market.

Matt Warcholiński

Makes sense. And from your perspective, Saxon Hammer conducting the MNA process or the due diligence of the technology company, it must be super difficult thing. And those topics, especially from a technology perspective, are very difficult because the financials or the legal part, let's say it's something that from the sector to sector could be kind of structuralized. In a structuralized approach you already know how to do it. But from the technology side, I'm just wondering your approach to how do you evaluate those companies, how do you check the technology? Is it on a buyer's type more or do you have a partner who is dealing with that?

dr Nicholas Hanser

Yeah, that's a good point. Look, I mean, the beauty of our business is we see a lot of companies and basically we talk to a lot of companies. And for us, the more you see I don't want to say you get immune, but you see a lot of people talking a lot and without any substance and it's very hard for us, obviously, it's a very tricky and it's one of the most important things to choose the right companies you want to work with. And it's super important that we have a good view if that's a company that we want to work with, where we see that we can raise money for investors, that we can sell this company. And the quality of the company is just in general high. I mean, what we do and sometimes we work with senior advisors. We have big stack of senior advisors that we work with that we bring in when it's super specialized. But I mean, we're technology teams so we know our ins and outs a bit in the sector. So we look very closely, first of all of the technology stack, right, we evaluate the technology of that company.

dr Nicholas Hanser

We see how their products and services are built and what technologies are really used there. Look at the software development process, the programming languages and the development tools and the infrastructure. Are these guys just using third party stuff, developing their own? What is the technology behind this? A high quality CTO is a part time guy who doesn't you don't realize very quickly these guys are serious or it's just like basically a couple of business guys who want to be tech bank, tech entrepreneurs. But nevertheless, I mean, it can also work. But that's one of the factors we look at. Also intellectual property, right? I mean you can have a very nice product, but if it's not protected, that's super crucial that you have the relevant IP protections in place and also patents, trademark and copyrights that can also identify that you identify potential legal risks very quickly. Also that when you want to sell a company, you acquire especially on strategic side, they look very closely and say, what is actually protected here? What are we buying? Because no one wants to buy anything that you can actually easily replicate. And everybody knows that with a lot of money and a lot of time, you can probably replicate nearly everything.

dr Nicholas Hanser

But nevertheless, that's one of the factors. Also, the team, right? Team we look at, can people present? I mean, how are they together? Is it a complementary team? Is it a diverse team? Do they have good company leadership, development, key personnel and stuff? That's super important because we work very intensively with these guys, and we want to work with people that we like because life is too short to work with people that we don't like. And luckily, in our position, we can really choose who we work with. And we only work with people where we're really convinced and who we really want to help. And normally projects, they take a long time, sometimes up to like nine months, sometimes shorter, three, six months. But we only work with people who say, hey, I'm not getting a headache, a heart attack or a headache when someone calls me on the phone. You know, Germany, there's a lot of tricky people around often. Nevertheless, financials are also, I think, a very important factor. You mentioned financials. It's not the only criteria, but the financial health of the company, the revenues, how the expense and profitability, that's super important and also drives down into valuation.

dr Nicholas Hanser

We need a certain valuation in order to make our services worthwhile, needs to be a company which is at least worth 15, 20 million when we want to sell it, or the transaction size needs to be at least this amount. And so we look very closely if that's the case, especially in that the growth and we see area valuation is often a bit more an art than a science because a lot of the revenues and the profitability will only come later. So it's very important to judge that. That's why the market opportunity in general, what kind of market opportunity is that? You mentioned food ora and Uber, right? I mean, those things there's a huge market opportunity. That's why they also were able to raise these amounts of money, because when you look at the potential growth opportunity was actually what a company can achieve. It's super important. That's why energy transition, for example. I mean, there's huge growth opportunity still, renewable energy, and so there's lots of stuff still to be done. That's why the future revenue growth is super important, especially for investors. So we look very similarly as an investor would also.

dr Nicholas Hanser

I mean, coming back again to Cybersecurity, is the company protected enough against Fallouts? I mean, if you have one thing that falls apart, is the company breaking together. We look very closely at these kind of things the same way as investors do.

Matt Warcholiński

Yeah, okay, thanks. Maybe let's dig deeper here a bit so maybe you can give some more examples about what to watch. So let's say I have 50 people, startup, tech startup, delivering some interesting and unique technology product. I have a CTO, CTO, maybe in house development team, an agency supporting me. And as an investor, what are the factors, how do we evaluate this company? You mentioned a lot about the financial and the previous points, but to simplify it, are there any areas that you look in the company and you give me extra points for that, and for that you give me like minus and.

dr Nicholas Hanser

I'm just wondering yeah, that's a good point. At the end, the product and service are most important, right? You look at the product and the services and you see, okay, how is the quality of this? Right? I mean, the best is obviously and that's why the problem is with B two C stuff, everybody can be at the end user and everybody will use it. So everybody has an opinion about it. That's why we futura, I think, get a lot of money and especially many fields in the B two C space, because at the end, investors and buyers, they're all humans, right? And they're user service. And when they think it's very convenient to have a one click groceries to your door, then think it's a beautiful business, why don't we give them 500 million to grow? And so it's very tempting, but at the end, the product and service is super important and the uniqueest in the market, right? Does it meet the needs of the customer? What a kind of product roadmap and development plan for the product is there. That's the most important thing. Again, the technology stack, right? How is it built?

dr Nicholas Hanser

Is it like a deep tech company, really? Or is it just like someone uses and stuff like that, or like third party software? It makes a big difference being a technology company and just using technology. So I think one of the things is really the technology stack, as mentioned before, right, the technological needs that a company has, if they're really well covered in us, then the team, again, right, that's super important. Are these guys harmonic? Are they complementary? Is there good chemistry? Is their leadership? And again, the market opportunity, right? The market opportunity, as mentioned, is it huge? What is really the target market? How big is it intellectual property? Again, what are the patterns, what are the copyrights? I think extra points would definitely give you if it solves a real problem in the market which has not been really covered, right? Strong and experienced team, super important. People probably already did a startup, made some money, sold it. That's obviously very always in favor with investors because they feel comfortable. They basically think about, okay, this guy already made my money, let's try it again. It's a bit tougher when you're doing it for the first time.

dr Nicholas Hanser

On the other hand, if you have. Your new product and a great technology stack and a growing market with a good intellectual property that works. I think on a negative side, right, if you lose the product and it falls apart on the first thing, the poor quality is a problem. And you see you have a great plan and you think, okay, I'm going to have like, I don't know, 500 users every day, a new one, and then you don't have any users, that's a problem, right? And when you see also that the technology is very limited, really inside the company, and poor financial performance, right, that's definitely a red flag. Legal issues. If employees sue you, that's obviously not great. And also if the company is completely indebted, that's tricky these days because as debt becomes expensive, there could be a big burden.

Matt Warcholiński

Okay, so let's talk now more about people, because the company is people. This is super important. And I'm just wondering, with your experience, you have seen many companies and you want to help them for sure. So do you assist your clients to help them build their in house teams or hiring executives to improve their results or growth? If you could explain a bit, how does it work? Like, do you recommend something sometimes rebuilding the leadership team? Because this is super difficult.

dr Nicholas Hanser

I mean, obviously these are tough decisions that need to be made by the shareholders. We're not consulted. They're not coming in and saying, we don't like you, you got to go. But if they ask us and we are sometimes being a bit the role of a consultant, obviously we see where there's a problem and people come to us, hey, what do you think? Obviously we have a big network, we can help the companies there. But I think the problem is always when there's poor performance or also lack of diversity can be a problem these days. Skill gaps in general, right? I mean, when you want to grow a market or go to a country where you don't have anybody and you see very quickly if there's no cultural fit, that's also a problem. But at the end, I mean, we're not there to recommend that people have got to go or something. We basically want to help the people that are there to achieve the best. But that's something often that shareholders think about and we know very closely and they ask us, do you know anybody who could lead this in this company? And obviously we're happy to get a recommendation of some sort in order to make the company more successful.

Matt Warcholiński

But sometimes you need to make tough decisions, right? Like even at your business or at your company, sometimes you need to terminate the people that fire people. They don't pick the organization or you see that if you don't do it, this will not help you with the growth. It can become reproductive. So I'm just wondering, are there any factors that you see or that you say like, hey, something like this or this or this is happening. This is the person that for sure we need to hire. Because those decisions you need to do faster.

dr Nicholas Hanser

Yeah, I think from my experience, I mean, nearly 20 years in banking, I can tell you it's all about the performance. First and foremost, performance is super important. If an executive in any field these days is not meeting the expectations despite having been given the necessary resources and the support, then it's a problem. People are very easy to measure these days and they look very at the end. You know it right. It's all about the numbers. But then even if the numbers are good and the behavior is not good, I think the standards have really changed a bit. I think nowadays people are much more sensitive when it comes to behavior of leadership. You need to be very straightforward and clean and you cannot just have when you look at how probably some German companies were run in the 80s or when you look at the Wall Street of the 80s, that's completely different to now. I mean, everybody has to be much more considerate and I think behavior is a super important factor to consider and how people are treated. And if it's unethical or something, that's obviously a completely red flag. Right. Because reputation, as we now see with the banking crisis, everything in many companies and no one wants to work with companies that they don't perceive as ethically correct.

dr Nicholas Hanser

You saw why the US CEO had to step down, stuff like that. It turns very quickly the public. Right. Also cultural fit, right? If an executive is not a good cultural fit, it just doesn't work. Right. I mean, I think that they can be what's super important. What you realize very quickly is that employee morale is super important and a negative employee morale can have a very negative impact on the company's culture and performance. And people just want a nice place where they can work and do their stuff and it's super important that they're happy. Right. You also see when there's always constant conflicts, right? I think any company, when you have conflicts, it's not a good thing. It needs to be solved. And sometimes when people are the problem, that's obviously a big red flag. But also the alignment with the company goals, right? It's super important. And I think that people realize alignment of the employees together with the company goals. It's something that we are in together. Right. It's not about like the company needs to make the highest profit and the employees needs to do the longest hours. Employees, what you don't want is like a standard kind of work environment where everybody is just doing their job and going home.

dr Nicholas Hanser

We want people who are really liking what they're doing and you see this extra mile and I think that makes a big difference and that's what we recommend also shareholders when they talk to companies that we work with, it's very simple, but I think it works across the different industries and it's shifted a lot. So I think it's very important, these factors.

Matt Warcholiński

Yeah, you mentioned banking prices. I mentioned before the recession that started last year, the last few years are pretty crazy. I'm just wondering about your opinion about the recession and how this will go. Like last few weeks we saw the Silicon Valley Bank failed. Now there are talks about the regional bank. So this is the credit shoes. Another thing and I'm just always wondering it will be worse or.

dr Nicholas Hanser

We will.

Matt Warcholiński

Finish this recession smoothly and we'll figure it out how to deal with it without the big crisis. What is your gut feeling?

dr Nicholas Hanser

Yeah, first of all, I think if that's a recession, I mean recession isn't so bad because right now I think the recessions that I had in mind at least and I only didn't see so many in 1987 I was already born, but there was stock market crash so I wasn't really affected by it. But when you look at for example.com, crisis, I think I felt much more panic. Also 2009, obviously I think everybody worked in banking was very much affected. So I think for Silicon Valley Bank and stuff like that, you can really see how quickly nowadays these kind of things develop because when you look at a bank, I mean Silicon Valley Bank obviously is not a big player, never was in Germany, but it's a big bank in the US. And they just had a huge inflow of money over the last couple of years, especially because they were just catering to these kind of growth. We see funded companies and we know because we for example working right now on a project where SVB Silicon Valley Bank is a stakeholder and basically is owed some money from one company that is currently in distress and where we where we need to sell very quickly.

dr Nicholas Hanser

And it's just obviously the the circumstances are not great but it's a bit scary how quickly things turn sour here. Right? I mean you hear the first rumors, I don't know, it was US time Wednesday afternoon, basically our time Thursday morning and then on Friday the bank is closed and the state owns it. So I mean, I don't know, I've never seen such a quick thing. Also, I mean when my former employer, Credit Swiss, I think the bank has been around since 168 years. When I started there they gave me a little book about the history. I think that book is probably going to be worth something soon. I have to look up it, I still have it. But it's just one thing that you have. I mean the trust in this industry in general is everything. When people don't want to use something and people are against something and people don't want to deal with somebody, then it's a big problem. And the public can be very harsh. And nowadays with social media used to be before with newspapers, there was at least a day delay where people were reading the news, discussing it by phone or whatever.

dr Nicholas Hanser

So it was never that organized. I think now with Twitter and everything, people are just much more organized. And when rumors spread, be it correct or false and panic takes over, you don't want to be in the focus of that, that's for sure.

Matt Warcholiński

Great, thank you. I have two more questions for you, and one is related to your huge experience and I just wanted to ask you about your biggest lessons learned in your career. Do you have some that you could share? What do you have learned?

dr Nicholas Hanser

Yeah, look, I think people come up to me and ask me, hey, I have this idea. Is this a great business idea? Should we do this? What do you think about this business? And I mean, from what I learned and the funny thing is, when you look really back, timing is really everything. You look at like a couple of things. For example, when you [email protected] bubble, you see probably remember Webband and pets.com and stuff like that. And I think after that all went sour, business school, there were case studies about Webband and pets.com and how stupid investors were, what kind of money was squandered there. And then you see look at stuff like Gorillas or So plus and you think that's exactly the same thing. In a way it's just like now I think the time is more ripe, right? And it's just when you for example, [email protected], that's a book that I personally really liked at that time when I was a bit younger. It was about this fashion company which basically wanted to revolutionize fashion and basically have everything in the internet and you can look stuff up. But at that time the infrastructure wasn't there and people didn't have like 5G or everywhere.

dr Nicholas Hanser

It wasn't WiFi, wasn't quick enough. It was just ahead of their time. So often I think business models, you just need the right time and probably something where people say this is completely ridiculous and that goes sour. Probably someone picks it up in ten years ago when technology has completely evolved and it can be something. So I think with the right execution and with a bit of luck, a lot of business models can succeed. But it's a lot of hard work. And I don't want to categorically say no to some business models when I know probably they don't work in the current environment. But on the other hand, I think just coming back to a bit more hard factors also the importance of due diligence, right? You need to look closely in a company, right? You need to see the financials operations, the legal and regulatory compliance. You need to look at intellectual property, critical factors that could just impact the value of a transaction, right? That's super important because you don't want to wake up and say, hey, how do we oversee this? Why is this happening? And why they have a lawsuit here which will cost the whole deal?

dr Nicholas Hanser

So that's one thing I learned. I think that it's very important to do the homework. That's why when we start working with a company, we first look at it like an investor would for a certain period of time and basically look very closely through the data room and see that we find any red flags, if there are any. And also, communication is key, right? I mean, at the end, as an advisor, what we are, we are a bit advisors to our client, yes, but we always need to communicate the complex information to the client. We need to check with the different parties that the facilitation of communication is flowing, right. With the lawyers, of the accountants, with the other advisors. Sometimes you have a couple of guys who are basically slowing down a deal. You need to push it. You say, okay, what's your problem? What can we do to accelerate this? So that's a bit our job. Also, adaptability is key. At the end, I mentioned the transactions that we do with SVB. Yeah. A couple of weeks ago we were still speaking to them like normal. Now, I mean, it's very hard. One part is working at HSBC, the other part doesn't really know where they work.

dr Nicholas Hanser

So no one is really responsible anymore. And it's super important that we adapt here. Transactions can be super complex and unpredictable. And you always need to be ready to adapt to the changing circumstances and really manage unexpected issues that may arise. That's why it's so important to be always reachable these days. I mean, forget normal working hours from nine to five, there's always something happening. Sometimes I come out of the gym at 11:00 at night. I nearly get an art attack of what's going on now. But that's no problem. I mean, the good thing is you can also solve it then from your computer nowadays, from home, so that's okay. But in general, you need to be flexible, creative, and just to be quick to think on your feet. Right, but I mean, as an M and A advisor also, it's about building relationship, right? I mean, at the end, clients don't come to us, we come to the clients. It's very rare that someone calls us. For someone who listens, please give us a ring would be nice. But the reality is that we need to knock on a couple of doors to make us actually known.

dr Nicholas Hanser

Because no one really thinks about our profession. It's not like people wake up and say, I would like to mandate an M and a advisor. That's not what people do. They don't even know what we do. It's more that they say, have this company, probably I want to sell it. Who could be of help here. So that's why it's super important that we build relationships early on with the relevant companies, with clients that we already have, because the best clients are repeat clients, obviously, then partners, other stakeholders, private equity, as you say, venture capital community who can basically help us to guide us towards the mandates. That's super important. And at the end, trust, right? They need to know, okay, there's a safe pair of hands who can help us facilitate this transaction, do this fundraise, do this m and a transaction, have the right strategic buyers at hand. So our network, on the other hand, also continuous learning, right? I think we learned a lot in the past about how digitalization can even improve our business, right? Not only regulations and the best practices and basically thriving to learn more and driving this further.

dr Nicholas Hanser

We learned a lot, I mean, in the past when we looked very closer from different industries, how online lead generation actually works, right? I mean, you know it better than I, but at the end, yeah, there's only so much you can know from your network. On the other hand, online lead generation is a powerful tool linked in these days. I mean, everybody uses it. I mean, sometimes I don't even want to look because people are so, like, bragging about it. It's a bit we're not in America, right? So it's very hard to, I think, sometimes really listen to it. But on the other hand, I think it's very practical if you want to make connections, you see where the people who you have in common and stuff. It's very important, this online lead generation, that we're a bit more actively in the market, going out to people then when they want to sell your company, that they basically find us as axonama, click on the Google Ads and then basically come to us. Also, I think digital tools make it a lot easier. Also for juniors, when I remember when we started out, when I started out in banking, it was a lot more manual labor in the sense that you didn't have many templates, you had to do everything by yourself.

dr Nicholas Hanser

I mean, when you talk to older people who were in the industry, they were basically doing charts by the newspaper and then using a little pencil in order to do their charts. So I think we came a long way from that. But on the other hand, it's just super important. Also. For example, we now look at the stuff like using AI for creating content and as mentioned, digital tools for execution, just to make things more efficient and also more fun for the people to work with, for them to focus really on the stuff that they want to do.

Matt Warcholiński

The last question that I have is if there are any books or articles or papers or resources that have been particularly useful to you as a leader to help shape you.

dr Nicholas Hanser

Yeah, I can recommend a couple of books that I really personally enjoyed. And, for example, it's one of the books where everybody once read it's a book that many people bought but not many people actually fully read. I'm not talking about the Bible. I'm talking about the Steve Jobs biography, which is a huge book. But nowadays I think there's no excuse because you can carry it around a Kindle or on the iPhone. And I personally actually read it digital at that time because obviously I didn't want to carry a book with 700 pages. But it was definitely worth the read because it's just a very interesting story of how this guy basically created all this. It's also a bit negative in the sense that because he wasn't really a nice guy. And I think one of the problems that the book created was that it seems to be okay to be not an person and being a leader. And I think that's something that probably it's not a good message. On the other hand, it's just personally, I really enjoy reading about these kind of biographies to see how people basically started out and where they ended and what kind of coincidences led to all this.

dr Nicholas Hanser

And another one, and I Hope You Don't laugh, is basically the biography of Anna charts, total Recall, which was published in 2012. I mean, I was never a big fan of Anna Charts, to be frank. I always thought it was a kind of a stupid bodybuilding guy. But it's just a fascinating book of how this guy who started out in Austria and then became basically the governor of California married a Kennedy, right? I mean, what's the odds of that? So I think it's a very interesting read. And I think you get a good look into his soul in this book because he describes basically how he came just to Vienna, then to Munich and then for a short period, even, he was in London and then he basically came to the US. And he lived this body building lifestyle and he made his first million in real estate and then also, like, selling beauty products and nutrition for bodybuilders and stuff. And he's really a crazy, success driven guy. So sometimes a bit much when he doesn't go to the funeral of his father and so on because he has a contest and stuff. But I think it's very interesting to read, and I think it tells you a lot about how life can life can pan out, especially if you're younger.

dr Nicholas Hanser

And another thing that I can recommend only really to people probably a bit more deep here. Stefan Psych, I don't know if you know him, is an Austrian writer, and he basically writes about it was one book that he wrote, the World of Yesterday, where he described shortly before his death, I think it was 90 42 or something about how basically Europe has now, how they interacted before and the dangers of all of the world wars and so on, because he looks basically back and brings basically this society back to life. Because when you look back, we always think, okay, it was different times. But at that times people were also traveling to Paris, they were down in London, they were even going to New York. And it was normal cities, right? It was normal industrial cities everywhere in Europe. And after that, they still had basically a crazy war which nearly brought the whole of Europe down. So I think that's something that we always need to keep in mind that I think we have right now should appreciate and not go away that quickly. On the other hand, I mean, coming back to a lighter topic, the Lean Startup, which I also liked, Eric Greece, I think that's a good book.

dr Nicholas Hanser

Practical approach to starting and growing a successful business. I think that's good. And obviously, apart from your podcast, which is great, congratulations on that. I think the Harvard Business Review idea cast is pretty good. There's a lot of interviews with business leaders, authors and experts on topics like what is the secret of happiness and stuff. And I think it's definitely worthwhile. So that's why recommendations for this regard.

Matt Warcholiński

Yeah, great. Thank you, Nicolas. We have covered all the questions that I got. It was super interesting talk with you today to have the perspective from the investor advisor side, which is hard to get, and those are the things that you don't write enjoy in the books. A few points I really enjoy. So thank you for your time today.

dr Nicholas Hanser

Thank you. It was great. Perfect.

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