Alexander Piskunov — Don’t Start a Company to Sell It
Watch on YouTube, or listen on Spotify and Apple Podcasts.
Alexander Piskunov has sat on nearly every side of the table. Originally from Russia, and a UK resident for most of his life, Alex started in investment banking doing tech M&A, moved into private equity, then took what he calls a leap of faith: a business importing wine into the UK from Georgia, South Africa, Chile, Brazil and Peru. He sold his stake to a European family office, became a partner at an early-stage deep tech fund, later started a second, later-stage fund, and today advises governments on investment and innovation. Mash asked him what the move from founder to investor taught him — and what founders should know before they raise, pick a co-founder or choose an investor.
This conversation has been edited and condensed.
“A leap of faith”
You went from corporate to entrepreneurship, and then from entrepreneur to investor. Give me the backstory.
I’m originally from Russia, but for the majority of my conscious life I lived in the UK, where I went to school and university. Like here in the US, a lot of smart, ambitious people go into either consulting or investment banking. I went into IB and worked for a few years in tech M&A. The deals were high-profile and exciting, colleagues were smart, money was good. The hierarchy was not good — we didn’t get much responsibility at the earlier levels — and a lot of the work was too technical for my liking.
So I transitioned into private equity, where, at least on paper, you have a great opportunity to influence things. I also got to network quite a lot with the entrepreneurs at the businesses we acquired, and I became really curious: how was life on the other side? What’s it like to be an entrepreneur? So I decided to take a leap of faith, as I say, and become an entrepreneur myself.
That’s not an easy decision — leaving a job where you’re making money and you’re probably successful, and saying, “I want to jump ship and start my own company.” It’s scary, but also really exciting. How did you make it?
I’d agree it’s scary and exciting. I think it’s overly glamorized in the media. Especially in Silicon Valley, there’s a myth of the successful entrepreneur. Unfortunately, not as many people who start eventually make it to success, and very few people actually enjoy the journey.
For me, I really wanted more agency in my life. And I appreciated that I would end up working more than the standard 9-to-5, and probably spend a bunch of my time and money experimenting on things that would not be so fruitful.
It’s very important to believe in yourself, and not to do it alone. The media perpetuate the cult of the solo founder; in reality, that’s very unlikely. And if you’re moving from a corporate career into your own business, it’s important not to go in naked, but to have a substantial financial pillow — especially in a traditional business, because it’s less likely you’ll be able to raise from VCs.
So what did you build?
Wine imports. For the UK, exotic wine is basically anything that isn’t France, Italy or Spain. Even Napa Valley is a relatively niche market there. We imported from Georgia in the Caucasus, South Africa, and Chile, Brazil and Peru in LatAm. It was an education by itself. Neither my education nor my corporate career prepared me sufficiently. A lot of things I had to learn from scratch, and very quickly, from my own mistakes.
In Silicon Valley we’d call that a lifestyle business, not a startup in search of a business model for a huge market. Were you leaving the 9-to-5 for agency, freedom and good money — or trying to build something you could exit?
Starting from the end: I did eventually sell my business for some very good money to a European family office. But honestly, I don’t believe that any founder in his right mind starts something up in order to sell it. And if you’re an early-stage founder, I’d definitely advise you not to tell that to your investors. They understand you might have an earlier-stage exit, but the multiple they’d get would not be as meaningful. So plan ahead to the next stage — just not so much into the future.
I didn’t really think of it as a tech business versus a lifestyle business. I felt it was a very interesting industry to explore, a relatively traditional sector that could give me access to some very interesting people and open the right doors. In certain societies and organizations, everybody likes sophisticated wine. It’s not vodka or beer.
Is the money from that sale what let you become an investor?
It definitely helped me become a partner at an investment firm. The first fund, which I joined after selling my stake, was focused on earlier-stage investments, and my entrepreneurial experience was very helpful for understanding what problems earlier-stage founders face, how to support their growth once they’re in the portfolio, and how to help them strategize for major decisions. After that cash exit, it became quite interesting to me to help founders who are still trying to make their mark on the world.
The transition wasn’t without its problems, though. My prior experience was financial, my business was lifestyle, and the fund was a deep tech fund. We dealt a lot with emerging technologies, and that’s a different game.
Is the math the same as what we face in Silicon Valley — one out of ten has to hit an order of magnitude bigger than all the rest combined?
If you’re an investor, you’re not trying to play the statistics game and get one out of ten. You hope to invest in as many great companies as possible. Especially at the earlier stages, and especially in deep tech and hardware, a lot of things are beyond your control. At that fund we were relatively lucky — or sophisticated enough — to invest in more than just one good company. Quite a few of our deals ultimately raised a lot of money after us from major VCs.
What can you share about how you and your partners picked those winners?
As an earlier-stage fund, we based a lot of our decisions on qualitative aspects. How well do they work together as a team? What are the founders’ backgrounds? How sophisticated is the product, even at an early stage? How many PhDs in the relevant fields are on the team? Any serial founders? Those things aren’t concrete. They depend on individual judgment, which is why our gut feeling as partners was very, very important.
Also — especially in earlier-stage VC — what really makes or breaks the game for you as a fund partner is your networking ability. A lot of the deals you end up investing in come from trusted parties, like partners at other funds or the CEOs of your portfolio companies, rather than individual entrepreneurs emailing you a pitch deck.
“The only answer is it depends”
I teach business and entrepreneurship at San Jose State, and I tell students their network is so much more important than they think. They just want to know how to write the email and how many to send. A lot of founders also try to raise too early. How early is too early?
We did deals from seed stage to Series B and then followed on. The second fund I ran was growth stage plus, so later-stage oriented.
But is it too early or not? The only answer is: it depends. On what product you’re building, which geographical market you’re in, whether you’re a serial founder. There’s so much free money available at very different stages now. Traditionally you had the triple F, then angels, then earlier-stage VCs, then private equity, then IPO. Now you have venture debt, venture studios, accelerators, incubators, corporate venture capital arms, you name it. So it really depends on what kind of support you’re lacking at this particular stage to get you over the hurdle onto the next one.
I wouldn’t advise entrepreneurs to fundraise as early as possible just for the sake of fundraising, because you’re giving away a disproportionate amount of equity compared to what you’re actually getting. Ultimately the question is: do you spend a lot of time fundraising, or do you spend it on business development? Unless you’re actually generating commercial traction, no VC will look at you seriously — unless you’re in generative AI right now or whatever. There are some hyped-up businesses, but in general, it only works against you.
Where did your journey go after that?
We did a bunch of great deals in deep tech. Then, if you remember, we had a not-so-wonderful time called COVID, and in deep tech a lot of people were not so sure what was going to happen tomorrow. I wanted to move toward more sophisticated companies — where it’s not about building the MVP or securing a CTO, but about scaling a product into a product line, or going from dominance in the local market toward international presence. So I started a later-stage investment vehicle. We dealt with more sophisticated co-investors and spoke a lot with governments around the world, and that’s how I eventually transitioned into the government advisory projects in investment and innovation I spend a lot of my time on now.
So your customer has changed to governments?
It’s either government ministries — technology or innovation, for example — or major local corporations in telecom, IT or technology. Mainly in emerging markets: I work quite heavily with South Africa, Kazakhstan, Pakistan and South Korea. A lot of those innovation ecosystems, as they like to be called, aren’t as sophisticated and haven’t found their place in the global technology world yet. They have ambitions, but they don’t really know how it’s done. At the same time, there are opportunities for entrepreneurs, investors and government decision-makers to jump several steps at once by applying the right lessons from the West and adjusting them to local conditions.
“Wrongfully underappreciated”
I’ve had a lot of interest in Nigeria — the size, the demographics, a country transitioning out of a huge reputation for corruption. How do you evaluate emerging opportunities? Do you follow the governments in, follow the problems, or look out at the world and decide where you want to be?
Right now I’m more active at the advisory level — sometimes on a board of directors, sometimes on an advisory council for something like the development of AI in a given country.
But since you mentioned Nigeria: a lot of outsiders see South Africa as the technologically sophisticated jewel of the continent. I’d say Nigeria is wrongfully underappreciated. It’s a country with a big population, relatively young, rapidly growing in both people and purchasing power. It’s ripe for innovation. Yes, it’s not hardware. Yes, it’s not generative AI. But you can have financial services for the previously underbanked, novel means of electricity generation, micromobility, software-as-a-service built for the local market. There are many impact fields that could still make investors a lot of money.
Africa in general isn’t really considered a big spot on the map by VCs. Yes, it’s a longer-term game. It’s more about engaging with local governments and getting your money back through dividends rather than selling to some later-stage investor. But there’s a lot of money to be had, provided you have the right local contacts.
Why leave a successful opportunity in investing for advising?
In all of the cases, those parties came to me. With Pakistan, I was giving lectures and seminars at the University of Cambridge, and one of the students was a deputy minister for planning and innovation in Pakistan, which is trying really hard to build an internationally competitive innovation ecosystem. He got me involved with some projects, and it expanded from there. With South Africa, I was invited to judge the BRICS competition for young scientists. Their ideas might be bright, but they don’t really know how to commercialize them or how to sell. Part of my role was to help them deliver better pitches and ask some uncomfortable questions so they understood their own limitations. Afterward, the South African side approached me about some projects.
It’s more interesting for me at this stage because I still get involved a lot with innovation and investment, just at a level higher than any individual fund. You see the bigger macro picture, and you can better understand how people’s lives would be expanded and improved.
“Honestly, I don’t believe that any founder in his right mind starts something up in order to sell it.”
— Alexander Piskunov · Inspiring Founders Podcast, S2, Ep. 04
Your story brings home that entrepreneurs all face the same challenges everywhere — it’s just how you execute in your market. For a founder listening in Nigeria, South Africa, New York or Silicon Valley, what would you want them to know?
Let me pick apart your point first. It’s true, but only partially. Founders in emerging markets face slightly different problems. They don’t know English as well, so they can’t expand or sell to international markets. They can’t access local capital pools from idea stage all the way to IPO. And even if they do IPO, it wouldn’t be on the Nairobi Stock Exchange; it would most likely be London, or maybe Hong Kong. But many of the problems are still related — how to pitch, how to fundraise, how to sell.
What a lot of founders in the developed parts of the world have gotten right is that they prioritize commercialization almost as soon as possible. It might not be a multi-billion-dollar contract with Google or Hyundai, but they try to secure letters of intent or pilots that, given the right conditions, could be scalable. Then they might be showcased in the media, win a competition or two, and get the interest of VCs, who put the coal into the fire of a train that’s just about to start up.
Founders from emerging markets, meanwhile, spend a lot of time building as technologically sophisticated a product as possible and a defensible — or so they think — patent portfolio, and then they get outpaced in the international market by British or American counterparts who might have started even later. A lot of founders in Silicon Valley, especially in deep tech or hardware, sit in stealth mode, because they understand that patents are great, but they’re not going to protect you if it comes to that.
Plug and Play, here in Silicon Valley, does a fantastic job of connecting its portfolio companies immediately with pilots at big corporations. It’s almost their secret sauce.
I wouldn’t say that’s specifically Plug and Play’s secret sauce — a lot of other acceleration programs do the same. But I’ve always felt the accelerator guys, if nothing else, are definitely brave. It’s a very long-winded and difficult game: find the right companies, do proper due diligence, accelerate them, and hopefully in a few years get some money out of it. One of the reasons I feel Y Combinator is still more successful than others is that they can meaningfully engage with and invest in their portfolio companies at later stages as well, when it’s no longer as risky but the returns are much more meaningful.
“Whatever can go wrong probably will”
I’m a founder myself, though I probably act more like a venture studio, because I invest my own money. A typical founder builds, goes to market, takes early capital, then raises follow-on rounds into Series A, B, C. What should they be prepared for before they hop on that train?
First, have meaningful runway, especially in deep tech or hardware, because a lot of the costs end up much higher than you anticipated, and you only find out the hard way. Sometimes the market moves against you, and you need leeway to weather that storm. You can agree with your investors on a bridge round, but they might demand concessions you’re not prepared for. It’s better to be ahead of the game.
I’d also say: definitely don’t do it alone. Get co-founders. It will be much easier to commercialize your business, to fundraise, and to realize your own vision, because there are only 24 hours in a day.
And especially in places like Silicon Valley, there’s so much free money that you need to pick not just anybody as your investor, but the people who can provide the right kind of smart money to solve the problem you’re facing at this specific stage — not the issue you’ll face three or four years down the road. Talk to the portfolio companies of that fund, or of that angel, to see how exactly they’ve helped and who they are as people. Even if you’re dealing with Sequoia or Andreessen, you’ll be dealing with a specific partner who is underwriting the deal.
Let’s talk about relationships — with a co-founder, investors, your network. What have you learned about getting into good ones and getting out of bad ones?
For my wine company, I was one of two partners. I sold my stake and he sold his, so ultimately we exited the company. When it comes to picking your co-founder, it’s very important to get a person who is not only smart but able to answer the questions you can’t address by yourself. You might be a great sales guy with good relationships with early-stage investors, but not so great at building a technologically sophisticated product. So get that person. For investors especially, that’s a very meaningful milestone.
Another thing: in early-stage entrepreneurship, whatever can go wrong probably will. You should be smart enough to anticipate that, and get co-founders you know how they’ll react in those risky situations.
It’s easy to tell founders to get a co-founder. But they come back and say, “Mash, this person is horrible,” or “I can’t stand them anymore.” There’s so much fear around working with people. What can they do — not just to evaluate somebody, but to start working with them in a way that’s meaningful?
I was just about to come to that. When I was running the early-stage fund, one of the red flags we had when assessing the co-founding team was whether the entrepreneurs were a husband and wife. If their personal relationship goes wrong, it’s very unlikely the business would survive — and there are already enough things in an early-stage business that can go wrong.
So get a person you know not only from the startup you’re building, but from before. You might have worked together at Google, or studied together at Stanford — once again, in your little Silicon Valley bubble — or you might be childhood friends. The famous saying goes that in business there are no friends. But it helps you understand how they think, and it helps the investors you might attract predict with more certainty that you know how to work together as a team.
“A profitable investment or a great learning opportunity”
Are there bad investors? What red flags should a founder look for?
Well, it’s either a profitable investment or a great learning opportunity, from either side. Understand how exactly they help their portfolio companies — whether it’s just a financial investment, or whether they help with introductions, product development, international scaling, opening offices. What you need depends on the niche, the market and the stage, so it’s difficult to generalize.
Talk to the other portfolio companies. See how the partners are as people, and what kind of returns they have. Normally you’d find that the bigger guys, like Sequoia or Founders Fund, have a great historical reputation, but they’re not doing as well as some of the emerging managers out there. When you’re raising multi-billion-dollar funds, you don’t need one or two companies to make your whole fund back. You need a dozen. And those guys are competing with SoftBank, with pension funds, so often they’re not even winning the allocation, or if they win it, not on great terms. So for founders, it could be a good opportunity to engage with emerging fund managers. They’re much more likely to give good terms and be much more helpful.
Beyond Silicon Valley
One last question, since you’re such an international person. What opportunities are emerging around the world that founders focused on Silicon Valley might not be seeing?
For a lot of American investors and entrepreneurs, unfortunately, the whole world is confined to the US. Within the US you have Silicon Valley, and some people have heard of an innovation ecosystem called the East Coast. But between them there’s the Midwest, and a lot is going on there right now. With the focus on America First and a return to manufacturing, a lot of innovation is happening in defense technology, dual-purpose, infrastructure. And AI is great, but it needs to be powered. They’re building data centers, and in many places there’s just not enough electricity, infrastructure or space, so they’re arriving at some very innovative solutions.
In Southeast Asia, for example, the world is split into two buckets. One is countries like Taiwan, South Korea, Japan or Hong Kong, with a historical reputation for innovation, or the dominance of something like the financial sector, so entrepreneurs build novel solutions for that field. The other is places like Indonesia, Malaysia and Vietnam, which in many cases are very similar to what people face in Africa.
A lot of investors, especially in the US, have been discovering those markets over the past few years. Often the game you play as an investor is basically arbitrage: find a great opportunity and get in at a lower valuation than the rest of the market. That’s much more feasible in the emerging parts of the world — especially if you’re a fund that can deliver international smart money.
More conversations with founders on the Inspiring Founders Podcast.