Michael Ronen On Leading SoftBank’s $100 Billion Vision Fund For Startups And Now Raising $150 Million To Transform Online Businesses

Michael Ronen has gone from investor to entrepreneur and back again. He helped the massive Vision Fund, and raised over $100M for his own venture. His startup, Branded, has attracted financing from top-tier investors like Kreos Capital, Lurra Capital, Target Global, and Declaration Partners.

In this episode, you will learn:

• Billion dollar investments
• Investing versus building an investment firm
• Starting and managing a company during a crisis

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About Michael Ronen:

Michael is the Co-founder and President of Branded and a Board Member at Falcon Capital Acquisition Corp. He was the Managing Partner of Softbank Investment Advisors where he focuses on investing in next-generation Automotive and Transportation companies, as well as Artificial Intelligence and Communications companies.

Michael joined Softbank in 2017 after 19 years at Goldman Sachs where most recently he was a Partner Managing Director and served as a co-chief operating officer of the Global Technology, Media, and Telecom Group and a member of the Investment Banking Operating Committee.

Michael was a member of Goldman Sachs’ M&A Group and the founder of the Automotive Technology effort at Goldman Sachs. Prior to joining Goldman Sachs, Michael served as a non-commissioned officer in the Israeli Air Force Intelligence Corps and later worked as an attorney, specializing in bankruptcies and financial restructurings.

Michael earned an LLB (JD) from Tel-Aviv University in 1994 and an MBA, with distinction, from the Stern School of Business at NYU in 1998.

Connect with Michael Ronen:

• Crunchbase
• LinkedIn
• RocketReach
• Topio

Read the Full Transcription of the Interview:

Alejandro Cremades: Alrighty hello everyone and welcome to the dealmakerr show. So I am very excited about the guests that we have today. We’re gonna be talking about all the good stuff that we like to talk about building scaling financing and also being on both sides of the table because our guest today has seen it all so I guess without further ado. Let’s welcome our guests today Michael Ronin welcome to the show. So originally born in Israel give us a little of our walk through memory lane. How was life growing up there.

Michael Ronen: I Used to be here. Thanks for having me.

Michael Ronen: Well, it was Israel of the 1970 s and early eighty s so it’s also different Israel at the time. So yeah let’s just say that it was quite different than New York city and Silicon Valley I grew up in a rural. Town in the northern part of Israel I grew up that town was very close to an air base a very large air base of the israeli air force and so my dream was to be a. An air force pilot and I never got to do that. But I got ultimately to be part of the Israeli Air Force Intelligence Forces so I did some very very interesting things that I still cannot talk about certainly not on a podcast but certainly shaped shape my life.

Alejandro Cremades: How do you think that shape your life your future.

Michael Ronen: So um, I would say the the both growing up in Israel during some difficult times you know the 1970 S still had significant wars and conflicts in Israel and when I was a very young kid. Um the yon kippur when 1973 was ah was a big event. I think it creates resilience and perspective at an early age. Um and gives you gives you some strength that otherwise um, you know my kids grew up in the last ten fifteen years in the us and it’s just a different It’s just a different level of resilience and and strength that comes out of that. And then I would say in the air force intelligence. You know you you start that you do this just after high school so I graduated high school at the age of 18 and within 3 2 3 hree months I was in a very intense program as part of the air force intelligence and and some kind of. Very intense events happen. You know I had ah a syrian air like air pilot take a mig and defect to Israel within my first year of of being in charge of some of the operations. This is six twelve months after being in high school and suddenly the consequence of. Things not going well is not just getting a b on your math exam. It’s you might you know first put people in danger and maybe even a country in danger people can get hurt. Obviously there’s lives at stake and fundamental kind of national issues that are at stake and second.

Michael Ronen: You’re kind of you’re on for yourself and you need to take care of yourself and and if you’re doing well, that’s great and if you’re challenged and and things are hard. You know there’s there’s no one to talk you and you need to kind of figure it out and the consequences of of screwing things up in. And and the army is not just being you know again getting a a bad grade or being you know out of the school for a day. It’s being in prison and losing your freedoms or doing you know, very very It’s very high stakes and so one said okay, found this on the web for is there. Hairline.

Alejandro Cremades: Now.

Michael Ronen: I am tiingish defect to Israel within my first and operations this is six hundred and twelve months after being something is wrong at my end got enough. Oh well is not just.

Alejandro Cremades: Very much shaped your future influence you as a person as a professional and eventually you go ah study law and then from law you did your Mba why didn’t you become a lawyer.

Michael Ronen: So um, well let’s start with why did it I even get to law if I’m honest about it. It was really I was just searching for what would be the path that will take me forward and my mother god rest her soul would like a good jewish mother wanted me to be a doctor. You know it was all about kind of having a profession and law was a way for me to get a perspective on on business life. Um, that is different. Um and and I so and I practice it for a year or 2 actually in Tel Aviv and it was very clear to me that that it’s a very narrow way of experiencing business and experiencing life and my ambition was to be to leave the country to kind of move to the us I frankly didn’t even know exactly how and why? but I just wanted to participate in business in a big way. And lawyers as much as the work is great and um and could be quite fulfilling have basically the the job is certainly the corporate side is to when everything is said and done and a transaction is complete. They they allocate risk in in legal documents between the two sides and to me all the interesting stuff happens before that when the business deal actually is getting cut when ah you know people build and and work to build businesses and and that’s that’s what I wanted to participate in.

Alejandro Cremades: So you ended up going to the investment banking side of it so you became a partner eventually in Goldman Sachs in New York and you were involved with them for quite a while almost twenty years that is many many many years working like crazy hours and like like they will do there typically so I think that this experience without a doubt gave you access to be able to meet with tons of ceos also be able to. See what works what doesn’t work in companies. So perhaps you know that pattern recognition. So what was that pattern recognition. How did that shape up for you. How were you able to see you know good ceos from bad ceos or good companies from bad companies.

Michael Ronen: So yeah, it is obviously the biggest chunk of my professional life was this experience and I didn’t leave because it was a combination of an amazing firm that went through a lot of ups and downs but is comprised of really really strong. People that I constantly learned from and a career path where you grow and you do more and you become a very influential and and kind of complete leader and and frankly it’s it’s every time I thought about doing something else. The job got more interesting and bigger. And yes, you’re right? Oh ho I did see a lot of different kind of industries and experiences it. It was always what and what we call Tmt so it’s always telecom media and tech and I always like to work across these sectors which are quite different and. Ah, but they all share kind of the disruption of technology and and when I joined telecom this is late 90 s early two thousand s telecom was disrupted the old telecom business became a broadband business first wireline and then wireless. Um, and then you know obviously tech and internet and media became a ah growth business by fueled by the broadband and the transition from physical to digital and look the the things you see in small and bigger companies is how people react and adapt to change.

Michael Ronen: And the old saying of you either adapt or you die I’ve seen this time and time again the old some old telecom companies never adapted and they became basically extinct and went bankrupt some companies adapted became broadband companies and grew. Same thing with media right? You know you see something like Spotify essentially taking a piracy model and making it a legitimate. Well well-con constructed profitable business globally and now we see this in in tech adapting to Ai et cetera. So the. The like the the thing that I clearly saw is the exuberance that always get through when you have um when you have big changes and that could be quite disorienting my first year or 2 of Goldman I was. Private jets funding companies without revenues in the first internet bubble and that seemed to be completely normal because that’s what I got into and then when it all implodes in your face. You realize? Oh oh that was that was actually not the normal There’s actually a normal below this that I just discovered. And then again you know seven zero eight nine when the bubble you went you go through another one. We are just going through another one right now you kind of learn to not be too disoriented by these bubbles. Yeah I always joke if there’s a bubble I kind of want to participate early and leave before before the.

Alejandro Cremades: Yeah.

Michael Ronen: Before the party is over. It’s very hard to do because you never know exactly when and how but you certainly understand when it’s exuberant and when when things are are not right and the best ceos the best leaders have a steady hand. They’re able to participate in a. Kind of thoughtful way in the growth parts of of these of these cycles and they they manage the risk of the cycle turning on them and they’re able to keep their team together throughout that journey and these are you need. Experience you need vision. You need culture. You need stability to be able to do that and those who do that very well including companies like Apple and Google and many other companies Microsoft which went through decades of difficulties and now he’s emerging as a leader. In Ai you know those companies with those strong cultures and and leaders can really make a difference.

Alejandro Cremades: So obviously 20 years at Goldman you know tons of great experiences there. Obviously you were you know doing pretty well. Um, I’m sure as a partner at Goldman for so many years. Why making the switch and joining softbank for their vision fund I mean obviously obviously. Ah, crazy idea with a crazy vision as the name of the fund is a 100000000000 which was completely unheard of but how was that shifting of gears for you.

Michael Ronen: So it all starts with Steve Jobs in Masa right so I in my years of goldman 1 of the most fascinating ceos obviously worked with was masayoshi son with Masayoshi son which was softbank and I later joined but also Steve Jobs and and I work with Apple. As it entered from pc into wireless through the iphone at the time was working with Motorola as well and blackberry and so I saw that collision and at the time Masa was leveraging his relationship with Steve and Apple to take on telecoms and became a very wealthy investor in telecom. So ten years later I’m a partner in Goldman and I’m working across different industries masa comes up with the idea of of the vision fund and and is talking to Middle East investors about it and I frankly went to see him and said exactly beyond what what? you just said which is. It is a crazy idea as always masa comes up with those and that’s one of the reasons people admire him and I told him masa I don’t know what you’re going to do with one hundred billion in ah in tech I I know what to do with a 100000000000 telecom. You know these are big and capital intensive companies. But at the time 2016 into 17 you know it’s it’s just too big and I said masai if if anything maybe 1 area where I begin to see capital intensity and and disruption. Maybe there’s there’s a wave there to to ride is transportation which was not something that and logistics which is not something that was on the radar at the time.

Michael Ronen: I said look tesla is ah is a small company but is super disruptive and most people think it’s not going to make it but it seems like they will make it uber is a startup that is disrupting transportation a meaningful way. There’s companies disrupting logistics these are capital intensive industries that maybe could. Require ah, you know this this type of strategic scale investing and masssa literally turned to me and said instead of telling me what not to do and and how stupid this is why don’t you come and do it and so. The opportunity to be aligned with a very large fund and to try and participate in those markets was very hard to to pass despite being in a great position at Goldman and so yes, my mother wasn’t pleased. It would have been more at. Traditional and safe to stay but it was much more exciting to move from New York to Silicon Valley start start investing and I did invest behind these themes that that I shared with masa in in that first meeting in early 2017 and including companies with general motors and and things like Cruise. And flexboard which is disrupting freight et ceterat cetera so it was quite quite fulfilling and and I must say that I really enjoyed it.

Alejandro Cremades: And without a doubt you know perhaps the trigger for you to become an entrepreneur I guess say maybe like being able to ah rub elbows with some of those incredible founders that the that division fund was able to invest in I mean tons and tons of unicorns. I’m sure that you were able to um to really get that bug too. Ah and and eventually you decide that is time for you to start a company. So how did that happen.

Michael Ronen: Yeah I think um, it was a privilege and I would say that in on investing in general. It’s a privileged perspective as an advisor I saw a lot of companies but I saw them always in the juncture of a transaction going public merging a company selling a company. When you’re working with companies as a growth investor. You see this cycle of growth and you see how they deal with all the adversities of of building a company and and you learn a lot again and and obviously this was a time of excess. There were clearly ah, kind of ah things to to deal with and and mistakes that were made. But there were actually as you said great entrepreneurs inside. There was more than 80 companies ultimately in in the vision fund and I invested in quite a few of them and saw probably you know I invested in over five six or 7 companies in in those 3 years so very large concentrating investments but probably saw. 500 um in in that period of time. The reason I ultimately chose to be an entrepreneur was frankly number one it was covid by the time I I left and starting something was hard but starting a company with great co-founders which was the key ingredients. Was possible given the shift in technology and the way the world worked and I really wanted to be on the other side of the investing business to see what it is to what it feels like to build and to receive capital and and be a steward of capital as and as a builder not just as an investor.

Michael Ronen: And frankly test test myself test my ability to ah to do that and do that well and it was an incredibly humbling experience because as much as I did great things and interesting things and worked incredibly hard over the years in different positions. Being a founder is my god it is the the most difficult thing to do by far. Um it is um I would say it’s if you compare it to driving you know I drove you know my career was driving very fast cars on highways and. Ah, maybe as a partner in Goldman some luxurious cars and very fast highways and then you’re on a motorcycle. Ah you know in ah in ah in a kind of in a dirt road and there’s there’s kind of suddenly everything you do. Impacts the company immediately and you can see it but you fall and you have to stand up with that motorcycle time and time again as an entrepreneur and that’s that’s just a different. It’s it’s still getting from a to b but it’s a very very different experience and certainly will make me a better investor as well.

Alejandro Cremades: So the company branded. What were you guys say doing at branded and how why did you think that this company or this problem was meaningful enough for you to take action and go at it.

Michael Ronen: So it was again covid days and ecommerce clearly was getting and a massive boost going back to the point of of cycles. It was very disorienting. It was very hard to tell how much of Ecommerce Growth Amazon growth is coming from the secular trend of. Obviously every year Amazon was growing very fast and how much of that is cyclical from lockdowns and and and whatnot but it was clear. There’s a lot of growth. The thesis was there were many Amazon opened up its e-commerce platforms so similar to Aws and compute Amazon made. Made the the subject of opening up your e-commerce business available to anyone with very little capital but just great entrepreneurial skills and so people were building small brands on Amazon and selling through them. And you can become a profitable business with two million five million seven ten million dollars of revenues and and that was not possible before the Amazon platform was essentially democratizing e-commerce we so my partner Pierre who’s now the sole Ceo of the company myself who co-founded. It. With him and 2 other co-founders thought that if we acquire a couple a handful of those smaller brands and put them on a common ecommerce tech platform and inject into them capital and the ability to grow them with expertise that small business owners. Just don’t have.

Michael Ronen: We’ll be able to do better than what they can do themselves and create a diversified brand holding company that is online and quite compelling and that’s essentially what we did and so so while Amazon started shrinking at the end of covid branded is still growing. It’s going organically without acquisitions. It’s now. North of $200,000,000 in in sales and couple hundred three hundred people or so around the world and it’s profitable. Um, and so the thesis clearly worked despite the volatility and in the markets and the good news for me was I got the experience of a lifetime building it. Um I now can really empathize with founders who are struggling day to day with their businesses and the company is doing well and the Ceo Pierre my friend is um is fully in charge and I’m able to extract myself as an entrepreneur take a deep breath. Do this fun stuff with you. Well I contemplate kind of my next steps.

Alejandro Cremades: And also you guys raised a 50,000,000 plus is that right.

Michael Ronen: Yeah, raise more than that in both in equity and debt and going back to the theme of of just be a steady hand while we certainly grew very fast. We grew from 0 to turning a million in in a year or two we didn’t over leverage. We didn’t. Overextend ourselves. We try to stay strategic. We try to stay in some market niches that where we thought we can add value and look. We were all living and this was another example of it in in a period of time that I don’t think we’ll see again in our lifetime I certainly in a way hope we won’t. Where money was essentially free and flowing everywhere and you could leverage both with debt and equity and create huge things quickly. Um, you kind of need to see through that to the underlying business fundamentals and not be intoxicated by it so leverage it. But. Kind of be steady steady hand and that’s what we did and so we used the capital to buy good businesses and manage them and once we stopped raising in 2021 late 2021 when we saw the markets well before the 2022 cool down. Begin to turn that way we kind of hunker down and manage the business for cash flow or profitability which proved to be the right thing to do.

Alejandro Cremades: And how much capital in total. Did you guys raise you said that you race a little bit over the one fifty okay got it now in terms of um, you know your’re, you’re an acceptor I mean why did you decide to.

Michael Ronen: Yeah, 100,000,000 and and both debt and equity. So.

Alejandro Cremades: You know, leave branded more as a part time Gig you know versus dedicating yourself full time to it because I mean it sounds like ah like a rocket ship.

Michael Ronen: It is a rocket ship and so if you think about the rocket ship I participated in the first stage of launch so zero to that first thing peeling out and then there’s a second usually in a second stage. Maybe I participated in that. But now we’re kind of um. Branded is becoming a more mature growth company but in a more mature stage part of what we needed to do is given the the world we’re in to take cost down so shrink the us expensive footprint and move things. Overseas. So I really. Um, did this for the company as much as I did it for anything else to make sure that the company which pierre is based in Europe much cheaper than the us we have Southeast Asia um and we have other low-cost locations to kind of put it a position where it can be profitable. And continue to grow in a more modest way. So my role of standing up the company building the fundamentals raising the capital helping establish the team really came to to a natural end. And and I’m very involved I’m a board member investor advisor et cetera so I’m there’s not a day where I’m not somehow involved with branded but it it it opened me up to pursue the passion which is now take that experience and all the other experience and go back most likely into investing.

Alejandro Cremades: So then let’s talk about most likely into investing. So what does this I know that they you don’t want to spill the beans here yet because it’d say it’s in the making but what can you share with the audience. What’s gonna be that the next chapter for you and why did you decide.

Michael Ronen: Like.

Alejandro Cremades: This next chapter as the one that made sense at this point in your career.

Michael Ronen: Um, yeah I won’t I won’t spill the beans but you know let’s let’s let’s kind of give a little bit of of a preview. Look I think that between the experiences that we touched on the goldman the Softbank brand as an entrepreneur I’m ready to build an investment business. So not just invest but build a firm that invests and so to me, it’s time in my life to. Participate in building bring a team together to build something that when and if I retire we’ll see how that all shapes up and whether it’s fifteen twenty thirty years from now. Whatever it’s going to be I actually leave behind something that is much bigger than me. And the experiences I think that I’ve experienced until now actually prepare me for that terms of building a culture and and investing etc. So the business I’m I’m going to build is is is going to be an investment business. Um the thematic kind of. Um, focus of of that business will leverage again, you kind of need to play through strengths in life and and it’s really thinking through strategically in some of the sectors that I’ve invested in so transportation logistics where climate issues continue to influence outcomes and.

Michael Ronen: Huge matter. But you know I’ve been in consumer I’ve been in fintech now I’ve I’ve done media I’m I’m going to be prolific and the other strength is strategic and and structured so I took masa essentially into general motors to try and build a. What is now one of the premier self-driving platforms in the world. Certainly second to none perhaps with Google and there was nobody else that was prepared to do that type of investment and it was a highly structured investment where general walous clearly was a partner and we would have had some downside protection. But. Unlimited upside and that was exited with over $ $1,000,000,000 of profit and in 2 years and and and cruise got catapulted to to a number 1 position structured investing partnering with corporates having strategic partnerships so doing more than just putting money into a company but actually. Being partners with big companies and thinking through how to do that in a structured way I think is a strength I think companies will need it. The world will be constrained with capital over the next several years we’re in a very different cycle and then building an investment platform around that will be very very exciting. So I am um. Actively exploring the right partnerships and capital to see whether that can become reality soon.

Alejandro Cremades: Amazing and I’m sure that to ah build a firm that is long lastsing. You know that you leave behind and and that is bigger than yourself as you were alluding to you know I’m sure that there’s a lot of ah things that you’ve learned from. Being close to people like Masa or you know other leaders that you were mentioning like Steve Jobs or or people like that. So I guess if you had to pick the top 3 traits of this of the of the most incredible inspiring leaders that you’ve had the opportunity to meet and and to work closely with what would you say are those.

Michael Ronen: It’s completely.

Alejandro Cremades: Top 3 key traits that you think for sure you’re gonna be. You’re gonna be applying as you’re building this next chapter this firm that they you probably are considering the biggest the you know thing in your career.

Michael Ronen: Yeah I think it’s a great question. The the. The first thing I would say is ah any organization is a reflection of the top people in the organization. So. It’s just like being a parent. You can tell your kids not to do something. But if you’re doing it yourself is. Just doesn’t matter so you need to model the culture that you’re trying to build in the way you behave with your team and the messages ah that you convey it’s in the way you carry yourself with people strategy etc. That will be the culture. So the first trait is be very authentic and be very visible in the way you communicate culture Goldman created a two hundred year culture through that through the perpetuation of these traits hiring people that align with that culture. And always from the top down exemplifying it and everything you do and hiring and promotion and et cetera. So that’s that’s point 1.2 is it’s like driving a fast car on a track or doing any type of sports or require a handeye coordination. You. You can’t look at the next turn you have to look very far down the track so you have certainly need to take care of business in the day-to-day but your job as a leader is to have the vision to know where you’re going and to communicate that constantly to the team.

Michael Ronen: In a very clear and articulate way right? You can’t um as as the leader you can’t just be ah trapped by the but the mundane you have to deal with it but your vision and and the way you communicate it to ah to your team will be will be critical. And then look There’s the kind of the last part of it which is maybe going back to the theme of this discussion which is is it’s a steady hand and it’s a steady hand through Ups and downs. Now you’re the experienced person. There’s going to be people that are half my age working with me I’ve seen cycles I’ve seen ups and downs and just having the kind of going back to that vision but not just the vision but the actual steady hand on the wheel. Um, to. Guide the team through the ups and downs and just be a great mentor as we do that and not kind of be swayed by some of the by those movements I think is is critical. So maybe those 3 traits? Um, ah would be a good summary of what I’ve seen from some of these ceos.

Alejandro Cremades: Love it. So um, so Michael for the people that are listening that will love to reach out and say hi. What is the best way for them to do so.

Michael Ronen: Hope. Well um I think they can ping me on Linkedin I get quite a lot of those and that that will be maybe ah, a good first filter and from there we can. We can leave ah details and show notes and whatnot. But but that will be a good start.

Alejandro Cremades: Amazing. Well hey Michael thank you so much for being on the deal maker show. It has been an honor to have you with us today.

Michael Ronen: Thanks Alana Andra have fun to be here I appreciate it. Thank you.

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