David Richards is a true serial entrepreneur. He has raised well over $120M for his companies. He’s faced his fair amount of challenges on the way. Yet, he has consistently found alternative methods to create solutions and come out on top.
In our recent episode of the DealMakers podcast, David generously shared his passion for starting and building companies, his unique approaches to getting funding, overcoming being fired from his own startup, and investing in others.
Listen to the full podcast episode and review the transcript here.
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Industrial Revolution
David Richards was born in the UK. Three generations of his family were entrepreneurs in the steel business. Back when steel was leading the first industrial revolution. One of those companies had more than 200k employees.
Sheffield, England was the Silicon Valley of that era. At one time 80% of the continent’s steel came from that one town. Of course, as with other great cities of the past, Sheffield failed to evolve with the times. It went into decline and many people ended up in poverty.
In just a couple of years out of university Richards would pack up and move to the next Silicon Valley in San Francisco, California to lead a new revolution.
During university, he discovered UNIX and new computing techniques. He wanted to code, structure programs and yearned to do something with practical application.
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Not being able to bear the thought of working for one of the really big and boring computer companies at the time he found a gig at Druid. As one of the first employees, he started leading a team.
They went from 10 to 300 people and went public on the London Stock Exchange within just two years.
He likens it to cramming an MBA into just a few months.
Entrepreneurial DNA
Some people just seem to be born entrepreneurs. At least always wanting to start their own business and being highly optimistic about what’s possible. Once they see it done, and especially this easy, they become very dangerous.
You can have a completely different world perspective. You see that you can start something from scratch with technology, hack through all of the barriers and turn it into a valuable business doing tens of millions of dollars in a very short period of time.
He of course also learned the hard work, teamwork, and benefits of hiring for different skill sets, which all make it possible behind the scenes.
So, he made the logical move of packing up two suitcases with his wife and buying a ticket to California.
He started Insevo, a venture back tech company building systems and applications to take businesses into eCommerce. After raising $25M they had a successful exit.
Not one to slow down, three of them from that company cofounded Librados. In just six months they were bought for $10M. They still owned 100% of the company when they sold it.
Then while evaluating investment opportunities from the other side of the table David found another hit business idea.
He had set his sights on investing in brilliant ideas and companies that venture funds wouldn’t or couldn’t. They found a genius who had invested three years of his life creating technology that most still considered impossible. He didn’t have any of the business side going. It was unclear when it would catch on. They partnered up as equals. It created great alignment in interests.
To fund the company David took it public on the UK’s alternative investment market. It was a very creative hack for bringing in very big funds. Including Fidelity, T. Rowe, and Oppenheimer. They were oversubscribed by 4x and gained $15M to make great hires and acquisitions.
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David also soon discovered some of the cons of being a public company. Like trying to pull off a necessary hard pivot. One that would prove critical and highly profitable, but not something most public companies and their CEOs are brave enough to attempt.
In fact, it got him fired. Well, more like conned into resigning by two of the people he had hired.
That weekend he discovered his love for real English football again, and that his shareholders actually had his back. They invested because he was there. They banded together with majority voting rights and put him back on the throne far faster than Steve Jobs comeback took.
Today the company is almost 200 people strong, with offices in Russia, China, Ireland, and California. Their technology is embedded into the Microsoft Azure Cloud.
Advice For Other Founders
Asked for his top tips for other entrepreneurs David gave our audience three:
1) Take Time Off
He says no matter how much of a genius you are it is virtually impossible to be objective as a founder inside a company. You are stuck in tunnel vision. You are working like crazy with no holidays. It takes true discipline and wisdom to force yourself to take time off now to get the right perspective. It’s way better than being forced to take a time out and wishing you would have earlier. You’ll perform better in your business and everyone will benefit. Make sure you take time out with your family too. You can’t get those years back.
2) Get Coaches
He admits he didn’t get the value of coaches, especially for his teams earlier on. Now he sees the tremendous value and need in bringing in people with outside perspectives to ask critical questions and help you.
3) Listen To Your Inner Voice
While our guts may inspire us to start businesses we often doubt it. It can take time out and outside advisors to help us listen to that intuition and act on it.
Listen in to the full podcast episode to find out more, including:
- How to grow and scale a business
- Ways to manage a board effectively
- Raising capital avoiding VCs
- Identifying great opportunities by removing traditional barriers
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