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Looking for the exceptional

An appropriate level of regulation is good.

An appropriate level of regulation is good.

When investing, I look for founders who, in a single meeting, can convince me that something I did not previously know or believe is true, says Prashant FonsekaPrincipal at Tuesday Capital.

In your career, you have helped various startups by investing and raising capital. How do you gauge a startup’s potential?

Every year that passes this question becomes harder to answer. At the end of the day a final investment decision comes down to gut and its past experiences, investment success and failures that inform and continuously inform and train that instinct. And, it is the exception and not the norm for us to invest in a company. So one answer is that I look for exceptional startups.

Prashant FonsekaPrashant Fonseka

But then, everyone thinks their startup is exceptional, so perhaps I can give a more helpful answer. I’m looking for founders who are working on something new and different from what else is out there. I’m looking for founders who, in a single meeting, can convince me that something I did not previously know or believe is true. And of course, those founders must be tackling a sufficiently large problem for it to be of interest to me.

Is there still a gap in funding, between Europe and the US?

There is a gap between US and European funding, though that seems to be closing rapidly with the emergence of new venture funds focused specifically on the European market. Of particular interest are funds that aim to bring a US-style investing approach to the European market, focusing on riskier bets with more potential upside.

If we had to compare the present with the situation in the early 2000s, while today there are more opportunities, it is more difficult to get noticed. How do you help startups raise their voice over that of their competitors?

One area of specialty for us is helping startups with storytelling. Our firm used to be called CrunchFund and we trace our history back to media. Ultimately, results and traction speak louder than words but we believe that having a clear strategy around PR and media can help companies achieve key milestones in recruiting, business development, and – yes – fundraising. Although the previous two are much more important, I always tell founders that if fundraising is hard then the problem lies elsewhere – fundraising should be the easiest thing a company does as getting top talent and top customers should be harder.

Which sector is ripe for disruption?

Everything will be automated. I’m looking for companies that are ahead of the curve there. Blockchain is the most recent tech platform but I think most are approaching it incorrectly – instead of trying to shoehorn blockchain into existing industry we should be focused on disrupting blockchain itself and making it better suited to the world.

Instead of trying to shoehorn blockchain into existing industry we should be focused on disrupting blockchain itself and making it better suited to the world

The name ‘Tuesday Capital’ is not just a random one. Why did you choose it?

Tuesday is the most productive day of the week. On Mondays people are adjusting from the weekends. We call Wednesday “hump day” because people start to get tired. Thursday is pre-Friday and Friday is Friday. Tuesday is when people get the most work done so for us, so every day is Tuesday.

Blockchain is rather contentious, with countries such as China taking a hard stance, and others like Malta being highly supportive. Who do you think is taking the right direction?

Many of the strengths of blockchain, particularly decentralisation and the irreversibility of transactions, are double-edged swords that make the ecosystem especially fertile ground for fraud and deception. For that reason I feel an appropriate level of regulation is good. Too many people being burned early will have negative long-term effects on the ecosystem. I do think that some of the early fears will bear out, but that others will be deemed to have been unfounded. So I’m not sure that any one country will be on the right side of history – everyone will get some right and some wrong.

Personally, what potential do you think blockchain holds for most sectors?

I am excited by the prospect of building some of the most robust networks ever built; networks that in some cases will be nearly impossible to take down by anyone. With great power comes great responsibility, though. 

You will be at the Malta Blockchain Summit. What are your expectations? 

I am expecting to meet extraordinary innovators, entrepreneurs, enthusiasts, and investors in the space. It will be my first trip to Malta and I have heard nothing but positives about the nation so for that reason as well, I am very excited.

Prashant Fonseka is a private tech investor with an entrepreneurial background and spirit focused on building brands and solving operational and managerial problems. He also has a deep personal interest in investing across multiple classes including real estate, public equities and debt.

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