3i Member Spotlight Interview

I was recently featured on the 3i Members Founder Spotlight podcast, where I spoke with Eric Rosen and shared my philosophy on angel investing, offering tips for future founders, and discussing my insights on cryptocurrency, marketplaces, and more.

3i Members is a membership network for accomplished private investors who source opportunities, share expertise, and build value for one another that goes far beyond the deal. 

In addition to the above YouTube video, you can also listen to the podcast on iTunes and Spotify.

iTunes:

Spotify:

Here is a transcript of the conversation for your reading pleasure.

Founder Spotlight: Lessons from Forbes #1 Angel Investor Fabrice Grinda

Eric Rosen: Hello. My name is Eric Rosen. Welcome to the joint podcast of 3i and the Rosen Report and the Founder Series. Today, I am honored to have our guest, Fabrice Grinda. Welcome, Fabrice. How are you today?

Fabrice Grinda: I’m doing very well. Thank you for having me.

Eric Rosen: Great. We’re very excited you’re here. So, you have had an amazing career and Forbes actually called you the number one angel investor in the world. How’d you get there?

Fabrice Grinda: I’d say happened since I never meant to be an angel investor. I was a tech founder and other because I was so visible from the public, other founders came and asked me to invest in them and thought long and hard whether I should do it. And I started doing it and it took life on its own.

Eric Rosen: So, what made you a public figure? What was the company that you founded? And how did that come about?

Fabrice Grinda: So back in 1998, when I was 23, I built an eBay-equivalent of Europe and I was trying to bring the internet to Europe. And I guess the story was super compelling. It was you know, top of my class at Princeton, the French guy had gone to the US; learned the internet and the ropes and it was bringing it to Europe.

And so, you know, it was on the cover of a magazine the equivalent cover of like whatever, Forbes, fortune, et cetera, and maybe very public. And so other founders started asking if I can invest with them. And look, I really hesitated for a long time because I’m like, is it a deviation from my mandate as a founder to be investing in other people?

Ultimately, I decided that if I can articulate lessons learned to others, it made me a better founder. And if I could meet other founders and keep my fingers on the pulse of the market would make me a better founder, especially running a multi category site, understanding what’s happening in each categories. And therefore I started doing it.

And you know, the reason I became so prolific is I think there’s so many problems to solve in the world and I want to solve all of them. And so, you know, when you think of something like climate change, it’s not one problem, thousands of little sub problems. And I want to back all the people trying to address every one of them individually.

Eric Rosen: So, to be the most prolific angel investor, how many angel investments have you made?

Fabrice Grinda: I’ve made 1100 angel investments to date, and I see about 300 deals a week.

Eric Rosen: 300 deals a week. Wow!

Fabrice Grinda: Yeah. And these days I’m making 200-300 investments per year.

Eric Rosen: Geez, that’s amazing. And what are the most successful angel investments you’ve made?

Fabrice Grinda: Well, it was an early investor in Alibaba. I was at the beginning of Delivery Hero, which is like a door dash of Europe and Southeast Asia. I invested in Uber, Airbnb, Flexport, Slice. I mean you name it. My specialty is marketplaces and network-effect businesses. And these days they’re less well known because they’re mostly B2B. But in the early days that were all the consumer facing ones I mentioned.

Eric Rosen: And is it always angel round? Is it, is it the seed? Is it the A, B, C? Where do you generally come in on those?

Fabrice Grinda: I’m stage agnostic. But most of what I do, my bread and butter, I’d say it would be a seed and A. I rarely do pre seed because I don’t invest in competitors, and I don’t want to be locking me out of a category before I’ve seen all the different players and see what the emergent winner is.

And I sometimes do B onwards because sometimes it takes that long for the winning player to emerge, but seed and A is really by bread and butter, but it’s about 70% seed and A, 20% B onwards, 10% pre seed. And then we’re also 55% U.S. and Canada, 25% Western Europe, and 10% Brazil and India, and 10% rest of the world, and really rest of the world, like India, Philippines Chile, Nigeria, whatever.

Eric Rosen: Wow. So, to look at 300 deals a week, make 11 or 1200 investments in a year. How big is your team at FJ Labs?

Fabrice Grinda: That’s 200 to 300 investments a year. The investment team is 11 people. The full team now is 33 people, given the huge back office. And so it’s kind of turned from what was really an Angel investing family office time approach to a venture capital firm, except we behave like angel investors.

I said, what we do is angel investing at venture scale, because we take two one-hour meetings in the course of a week and we decide if we invest or not. So, we don’t take board seats. We don’t lead, we don’t price. We’re really the founder, former founders or founder-friendly, decide quickly with full transparency and we’re there to help you.

Eric Rosen: Wow! That’s pretty quick turnaround. So, if you’re turning around that quickly, you must have a formula with things that are must haves or can’t haves. So, what are the three or four main traits that you need to make an investment? And what are the few things that are a non-starter, if they do this or don’t do this, that they’re out?

Fabrice Grinda: So, I want four things and they are all required. So, one, I need to like the founders. Two, I need to like the business. Three, I need like the deal terms and four, I need to like the thesis and the problem that they’re solving. And what we’re looking for for each of them is thus follows. So, I want founders who are both visionary, extraordinary, eloquent spokespeople, but can also execute.

So, the event diagram intersection of people that are extremely eloquent and visionary, but can execute is actually rather small. But you need both because someone who can. It’s very eloquent, is going to be able to raise money at a higher valuation, attract better people, is going to get more PR, better BD deals.

But if you don’t have the execution skills, maybe you end up with, whatever, Theranos. And if you have someone who knows how to execute, but can’t speak, they’re not going to be able to raise, and they might build a small, profitable business. Number two. And I care about all four. I care about the time and the unit economics and even pre-launch, even someone pre seed needs to be able to articulate what the estimated unit economics will look like based on having done landing page analysis, customer acquisition costs estimates based on the CPCs and the conversion rate to purchase.

They need to know the average order value of the industry. And the contribution margin and they better be expecting to be in line with the industry averages and people don’t know that, you know, to me, speaks to the fact they probably can’t execute. Number three, the deal terms need to be fair, not nothing in tech is cheap. But is it fair, in light of the round, the traction team and the option that they’re, that they’re doing, and we see so many deals, we really know what the median C round, A round, B round, et cetera, is that. And number four, you know, we were purpose driven. First of all, we want to solve, inequality of opportunity, climate change, and the mental and physical well-being crisis.

And in each of these, we have clear theses on the future of work, the future of food, the future of real estate. Are you in line with this thesis? And are you solving a problem we care about? And we want all four to be true. And then based on pattern recognition, because of course, at this point, we’ve invested in 1,100 companies. We’ve seen so many companies, and we invested about 1% of the companies we see were able to make very quick decisions.

Eric Rosen: Wow. And so, you told us the four traits that are kind of the must haves. If one or two things that if you see you’re like, I’m out right off the bat, obviously if you don’t like the founder, but I’m saying apart from that, are there terms or things that are just nonstarters for you?

Fabrice Grinda: They’re kind of all related to this, right? Like, so if you don’t know your business model maybe some of these companies. So, look, the five-year survival rate of a startup is about 5%. But if you at launch don’t know your business model, probably it’s 0.1%. And so, we’re already talking like a 500 S.

Yeah. And there are great businesses that started with no business model. Google and Facebook are examples of that, but it wouldn’t be the type of things I do because I, not trying to play Moneyball, I’m playing Powerball. I won most of my companies to make money. And by the way, the greatest to be the most prolific angel investor of the world is very easy, to be the most successful angel in the world, meaning you actually have exits and we’ve had 300 exits. We’ve been compounding at 39% IR for 24-25 years. That’s way harder to be the best you need to have exits. And we’ve made money in half the investments we’ve made.

Eric Rosen: Wow.

Fabrice Grinda:  Frankly, because of these four heuristics. So, we really want you to have a business model.

We really want you to focus on your burn and your unit economics, which no one cared about in 2021. But finally, in 2023, as become normal. And we care about valuation. There’s some VCs who are like, well, the company’s gonna win the category. It doesn’t matter what price you get it; matters that you get it.

And we don’t feel that’s true. If you get in at five and you sell for 50, you, you’re gonna do okay. But if you enter at 50 and, and you sell for 50, you, you get your money back. And, and if they sell for less than that, you don’t. And the reason we’ve made money in over half of our investments because we’ve been disciplined on price.

Eric Rosen: Well, I can tell you this, I am definitely not going to be confused with the most prolific angel investor of all time. I’ve made about 30 out of my PA and I can tell you that I have lost money on a lot more than half of my investments. So, it sounds like I should be giving you my money. So, I want to ask this question in two ways. One, what are the biggest investments mistakes that you see others make? And two, what are the biggest mistakes that startups, you know, the founders make?

Fabrice Grinda: Well, different types of mistakes. I think what I didn’t like as a founder, when I was talking to investors, read large, frankly, is just the lack of transparency, people not getting back to me.

People not respecting my time, showing up late on calls. And frankly I do a call with a VC or an angel. I would think it would go very well. And then they’d go straight instead of ghosting me, just actually give me, if you don’t want to invest, that’s fine. Just tell me why not, what I would need to change if I need to change it and do that.

Now it’s more of a behavior towards angels in terms of like creating your credibility towards founders and just creating your creativity. They’re both mistakes of omission and commission, right? Like, so there are companies you probably should invest in that you don’t. And we’ve all made those for a variety of reasons.

And then there’s companies you probably should not invest in that you do invest in and what leads you astray. Look, we stick to a neat knitting, right? When you’re a very smart, successful person, you have a tendency to believe, you know, everything and you can do anything. And the reality is that’s not the case.

And we sound like we’re very prolific, but the reality is we do have a specialization. I’ve, I studied market design in college. I’ve been building marketplaces. The biggest marketplace I built is a company called OLX. It’s 11,000 employees in 30 countries. It’s the most successful classified site in the world.

It’s what Craigslist should be if it was read properly with like mobile first, integrated payments and shipping, pre moderated content, female- friendly, no scam, no spam, and it’s the leading marketplace in all the emerging markets like Brazil, Latin, Ukraine, Russia, Eastern Europe, et cetera. And as a result, because I’ve been running marketplaces, I focus on building and investing in marketplaces and network effect businesses.

I don’t go and do biotech and green tech and hardware, et cetera. So, I think many people are led astray by their own success and do things where they don’t have expertise.

Eric Rosen:  Yeah, I like to say that, you know, I ran a billion-dollar hedge fund and mandate creep knowing what you’re good at.

And I think what happens in periods of time that are euphoric and it’s hard to find stuff, you start going astray and trying to do something that’s not a core competency. And I would say 99 out of a hundred times it ends in tears. And so, you know, when I was in my fund, we did what we did and we didn’t.

You know, look where we weren’t an expert. So, I think that’s a really, really good point.

Fabrice Grinda: Yeah. I mean, you look at it in life, right? Like there’s very successful neurosurgeons or whatever heart surgeons. And because they’re so good at what they do, they’re like, Oh, I’m going to be great investing and then they lose all of their savings.

And so, know what you’re good at. And it doesn’t make you good at everything else. There’s mastery. Now to answer the second question is what are the biggest mistakes founders make? So, what kills companies the most in the top three-four is one, not finding product market fit, but that’s not a mistake.

Number two, a much bigger mistake is fighting with your co-founders. If you do, if you can’t agree, it’ll tear the company down. Now, what’s interesting is companies with co-founders on average do better than companies without co-founders, but when the co-founders fight, it kills the companies. It’s two or three is the right number, not more, not less.

And number three, actually raising too much money at too high a price. There is a fair valuation for your company, but there are moments where a company gets hot and frothy. And of course, if you’re a founder and someone tells you, hey, I’ll invest 50 at 150 pre, 200 posts, 25% dilution. It sounds more compelling that I’ll invest whatever 10 at pre, but if your company is really worth 10- 30 pre, 40 posts, same dilution in one case, you raise 50, the other case you raise 40.

And you’re like, wait a minute. Why would I not take the 50? The issue is if you do not grow into your valuation, it will kill your company. Because if you have to do a down round, there’s anti-dilution provision, which reprices the prior round. And most often will kill the company. So, it’s a huge mistake many people made in 2021 where now they have to do either down rounds, or they have to do structured rounds. And maybe the example I gave from a valuation perspective is drastic. But if you don’t grow the valuation, it’s a big, big deal. So ,you really should think through what is the correct amount of capital you need because at the end of the day, by the way, the valuation in which you raise is a vanity metric.

The valuation that matters is the valuation in which you exit in the end; and you need to set yourself up for success.

Eric Rosen: You’re the expert and I’m definitely, clearly my, my venture track record does not look like 39 percent compounding for 30 years. So, but the one thing I’d say as I’ve sat on boards of startups, the consistent theme I see as one of the big mistakes is they don’t raise enough money because they don’t think,I sat on a board of a company like, oh, we’re only going to need X.

I go, that’s going to last you six months. You can’t do that. You need like 10 X. Like, so I think I find that a lot of founders think they’re going to do it so quickly and with so little money and it ends up taking more. So, I thought it was interesting. I understand why you said what you said, that raising too much and antidilution for the down rounds and everything.

Fabrice Grinda: It’s not raising too much, really raising it too high a price.

You can raise a lot as long as you don’t spend it. The problem is when people raise too much, they spend it. Like we push all of our founders raise at least 18 months to two years of cash and for them for the most part, I don’t see them deviating from that, especially today. I mean, but frankly, even in 2021 everyone raised two years’ worth of cash. So, I don’t see that as being too big a problem. I think people trying to raise too much at too high a price and then not getting their teeth kicked in when the market says no, especially today is a much bigger problem.

Eric Rosen: Okay. So, I want to wrap up that this section, but on one last question, and that is, as you make investments, you gave us your four must haves, do you look at the ownership structure of the co-founders, how much they own and is there a percentage of its two or three founders and it’s now the seed round, do you know, as an investor, I don’t want them to have too little because I don’t want them to be diluted, you know, down to nothing. And then they’re not incentivized.

So, is there a number that you look for them to have?

Fabrice Grinda: Yeah. I mean, the cap table construction matters a lot. The founders, especially at seed need to have collectively, whatever, 70-80 percent of the company. You know, the pre seed probably they raised one at four or five pre. So, these angel investors have like 20%, maybe they have a few advisors by the end plus the employees. Yeah, they should have 60 to 70 percent of the company at that stage. And if for whatever reason, it doesn’t look like that. And someone else’s 50 percent of the company that, you know, then we would not invest because of the cap table construction. We weren’t the founders would be incentivized properly.

Now the split between the founders is less relevant to some extent. Let’s say you’re three in your 100% pool wouldn’t be shocking if the CEO is 50%, the COO is 30% and the CTO of 20%. And then it depends, right? If you’re building an AI company, the CTO is a lot more. If you’re building a multi sided marketplace, maybe the CTO is 10 or 15, but sometimes they split equally. That matter is somewhat lost, actually.

Eric Rosen: Okay. Thank you for clarifying that. So, a lot of pain has been taken in crypto markets and you and I’ve had crypto discussions before. What do you think about them today? Who are the ultimate winners? And is it going to look like, if you invested in Bitcoin you’re going to, you’re going to prevail over the next five years in light of the crazy money and inflation and concerns.

Fabrice Grinda: I’m not particularly interested in Bitcoin just because it’s kind of like digital gold. It doesn’t really have a use case. I like assets that generate cash flows, right? Like for me, assets where it’s discounting present value of future cash flows. It’s something I can wrap my head around. So, I’m way more interested in applications on the Ethereum blockchain because if you want Ethereum is whatever AWS, but decentralized on which people are building applications. And there’s a whole bunch of really cool products there from in the DeFi world, like the Uniswap of the world or the AAVE and the Maker DAOs to all the different types of applications or Render.

Render is a really cool product where it’s decentralized GPUs, allowing people to run AI or graphic intensive applications instead of like buying massive server farms of like NVIDIA graphic cards. And so, things like that are really cool. It feels to me like we’re turning a corner, meaning now that the Bitcoin ETFs are being approved or likely to be approved and are coming to the market that liquidity conditions have improved and that some of the overhangs, like people were worried that finance might blow up, that tether might be a fraud or like seemingly dissipating. I suspect things will look better. Definitely in 25. I’m not sure about 24 just yet because I’m so worried about the macro. But there are clear use cases. In fact, I’m building a yield bearing stable coin in crypto right now to try to replace USDC and USDT. So, I’m still bullish on the category.

And by the way, it’s true, both of crypto and the web writ large, everyone’s been bearish because people have a tendency to be pro cyclical. These are the very best moments to be investing. Now. All of the posers are gone. The people that were in it for the quick buck. If people that are true believers and they’re now union economic focus. They’re making sure they’re not burning too much capital.

They’re being sensible with the capital that they’re raising. They’re keeping capital for two, three years and, and, and growing in a sensible way. There’s way less competition. And yes, entry multiples are lower and exit multiples will probably be lower. But if you win the category, you’re going to win the very best investments.

But the 2010s were made in 2008, 2009, 2010, 2011. I mean, Uber, Airbnb, Instagram, WhatsApp, were all built and invested in in those time periods. For me, the most interesting investments of the 2020s will have been made in 22, 23, 24. And that’s true both in crypto and in the web writ large.

Eric Rosen: That’s amazing. I, I do remember reading a story that I wanna say it was 2009 or 10.

The founder of Airbnb tried to raise a $150,000 for 10 percent of the company. And he had all these notes, like it’s a horrible idea. He had all these emails from major VCs that basically told them to pound sand. So, you know, I think you’d have done pretty well buying spending $150,000. That was clearly one that I did not see.

So, on that same topic, smart contracts, when will we see them really become more prevalent? And when you buy a house, you know, there’s all these nightmare stories about people steal the title of your house or when you’re buying anything of value, car, art, house, boat. When will we see the proliferation of smart contracts come to the market?

Fabrice Grinda: Yeah. So, you’re talking about smart contracts in the context of real-world assets, which I think is actually a mega trend and is coming, but I don’t think it’s going to come, especially for these types of assets where frankly, title for a house works reasonably well in the, in the US it’s really well.

And there’s a process that works well. I suspect that it’s mostly going to come for traditional finance. And so, the use case that we’re currently building, for instance, is creating a stable coin backed by U.S. treasury bills. And so, once you send me U.S. dollars, U.S.D.C., I actually go and buy T bills and then I give you S T U S E, which is your representation of those T bills, which you can then interact in DeFi with.

And so, I think these things will be more compelling because settlement is faster. The costs are cheaper. I mean, think of the traditional financial world where if you want to sell the stock, it goes through a custodian to a broker at a bank. It takes two days or three days to settle. It makes absolutely no sense that you can’t send it from you to me directly.

And so, I suspect that the real-world asset, you know, smart contract adoption will come through traditional assets first with T bills, then with bonds and ultimately probably with stocks and, others. And I think everything else will come way, way later. And the year where this will start becoming common, it’ll start in 24. It’ll be more common in 25 onwards, but starting T bills, which are frankly, the main use case.

Eric Rosen: Amazing. What do you make of the AI craze and on that same vein, the founder of OpenAI, not honing any shares.

Fabrice Grinda: There’s been many crazes, right? The smartphone craze, there was there were three craze for a while.

They were there. The social number craze, the search engine craze. As ever, I suspect that there are hype cycles where in the short term we overestimate how impactful they’re going to be. And yet in the long term, we underestimate the impact they have at societal level. And right now, we’re probably just past the peak of the hype cycle where everyone was investing.

I mean, even though tech writ large was in a recession, AI was like where capital was pouring. If you had the AI word in your startup, you could get crazy validations. I think a lot of these are going to end in tears because people invested in non-differentiated AI companies with no moats, no business model, I didn’t say in prices that said for society where they’re building is going to be extraordinarily valuable.

What I make of it, most of these companies will being that have been built or probably not super compelling yet from a business perspective. And I’m being they’ll lead to great investments, but they will little by little improve productivity in the economy. We are going to see a productivity revolution.

I mean, we see it in our startups, which, of course, are early adopters of AI, where they’re using it to help program, to do customer care, etcetera. And ultimately, it’ll seep into larger enterprise. But by when will, whatever, a large insurance company use it to process some medical claims? You know, that’s a decade away, right?

We need to deal with that hallucination, et cetera. When it does happen, it’ll lead to a real productivity revolution, but it’ll take a long time. So, it’s real, it’s happening, it’s been overhyped. There’s probably going to be the Valley of Despair, et cetera. And ultimately, it’s going to be transformational, but it’ll take whatever, 5-10 years to get there.

And I would only invest in it if you get in at reasonable valuations in a vertical application that has differentiated data and is doing something, you know, if you’re using OpenAI as your back end, and you’re giving you an open source, all of your data, you have no moat. Someone will go and kill you, possibly OpenAI.

So, I wouldn’t do it that way at all. In terms of who owns, what shares, et cetera, the look different ways to fund these things and cap structures that you, that you can use you can open source. You don’t need to open source. I mean, there are different business models, right? Like think of what happened with Linux and then the companies were built on top of Linux. So, that’s a choice in terms of how to build the community and get developers. But you can build the business model on top.

Also, if you’re wealthy enough and you don’t necessarily care, you’re like, I don’t do this for the money. I do this to really better the world. And I think that the political system is structurally incapable of addressing the challenges of our time which are typically beyond borders, you know, climate change, equality of opportunity, et cetera. That’s why I’m using the deflationary power of technology and its ability to improve user experiences to address these problems.

The reason I’m doing it in a for profit way is it’s scalable, sustainable, and you actually have a metric and make sure that you’re doing the right thing. But you know, I don’t need to work. I could have retired 20 years ago.

Eric Rosen: Well, that’s a, that’s a great answer. You, you talked about the quality of deal flow; being so much better today, and you said the good deals were done in 2008, 9, 10, and these in this section will be 22, 23, 24. Can you tell me a couple of the deals that you’ve done in the last year or two that you’re the most excited about that you think has the most trajectory on the upside?

Fabrice Grinda: Yeah. I’ll start by the thesis.

So, if we’re not, if we’ve not been investing in AI, like everyone else in the last few years, the time to invest in AI would have been five years ago. What we’ve been doing instead is thinking, digitizing the business world. So, if you think of these crazy, amazing, beautiful user experiences you have in the consumer world, Amazon, DoorDash, Uber, Airbnb, and the business world, you have none of that, right?

If you want to buy petrochemicals, there is no site where you can see what’s available, what’s the manufacturing capacity, what’s the pricing and then track payment, pay for it, get insurance, track the delivery, et cetera. And so, we’ve been, we have five theses in B2B marketplaces. One is writ large, bringing the discovery of inputs, petrochemicals, steel, gravel, et cetera, online with full transparency.

And by the way, when I described like putting the catalog, putting the pricing, getting a connection of manufacturing capacity, ERP integrations, payments, I mean, these could be different companies on one. And so, we’re investors in Knowde, which is a petrochemicals marketplace. Schüttflix, which is a European marketplace for gravel, or Metaloop, which is a marketplace for steal in Europe as well.

Number two, B2B enablement, right? Imagine you are a small business owner. You’re a Luigi and you’re building your pizzeria. You never got into those because you’d like to create a website and answer comments on Yelp and deal with accounting and negotiate with Uber and pick up the phone and create a delivery source.

You’d like to cook pizza, you’d like to talk to your customers and now you need to do all these things in order to compete with Domino’s. And so, our thesis is both helping the SMBs compete with the large chains and B, Helping them do the things they love and doing everything else for them. So, we’re investors in a company called Slice, which is basically helping pizzerias do all the things they don’t like, pick up the phone, create the website, provide them with a POS, et cetera.

We do the same thing in the cafe category with a company called Odeko. Which helps the coffee shop owners, they just want to be baristas. They don’t want to be dealing with like inventory management. And so, what’s amazing with the Odeko is they have a purchasing power of hundreds of millions of dollars, so they get better prices on coffee.

They have the keys to the coffee shop. So, they go at night, replenish your inventory, not bother you and give you better pricing. So very high NPS. We do it the same for Fresha for hairdressers. We do the same with Jobox for locksmith. I mean, and list goes on to do it for bodega is helping them source, et cetera.

Number three. As you know, many companies are intelligently moving the supply chains out of China. So French shoring is a mega trend. And so, we’re helping or we’re investing in companies that are moving supply chains from China to India to then export to the West. And again, it also falls in the SMB enablement because these are mostly mom and pop factory owners in India, who what they want to do is manufacture. They want to be answering RFQs and dealing with payments and tracking, discovering clients and creating prototypes, etc. So, these marketplaces do that for them. And so, we’re investors in a ZYOD, an apparel marketplace. Doocan, a rug and linen marketplace and Xim Kart, which is a ceramics marketplace.

And you think of the category, we’re investing in it. Number four, we’re investors in labor marketplaces to support this. So, Trusted Health, a nurse’s marketplace that is doing hundreds of millions of bookings and traveling nurses or Rig Up, it’s now called Workrise, which is helping oil services workers work on oil platforms, or Jobandtalent helping blue collar workers work for Uber, Amazon in Europe. I mean, the list goes on. And last but not least, we’re investors in the companies that are supporting all of us. So, for this to work, you need global transportation, companies like Flexport which is an amazing international online freight forwarder company or ShipBob, which is helping offline retailers compete with Amazon by doing picking and packing, shipping, and maybe even same day delivery.

And the list goes on. I’m giving you a lot of companies. Many of these are already billion-dollar companies, even though no one’s heard of them, and they are absolutely crushing it. And I’m excited to see when digital penetration in B2B goes from 1 percent where it is today to like 20%, these are going to be 10, 20 plus billion-dollar companies.

So, it’s very, very exciting. It’s slow. It’s boring, but it’s amazing.

Eric Rosen: So, you think a B2B is, is where the puck is heading there? 

Fabrice Grinda: Absolutely.

Eric Rosen: Okay. So, there was a New York times article maybe almost 10 years ago that talked about you giving up all your possessions and it got down to 50 items. And I want to say, if the, if I remember right.

A pair of socks was two items, I think, in that article.

Fabrice Grinda: No, a pair of socks was one item.

Eric Rosen: What, a pair of socks was one item?

Fabrice Grinda: Yeah, yeah.

Eric Rosen: Okay. How’d you get there? How long did that last? I would last like a day. So how did that happen?

Fabrice Grinda: No, it lasted for four years.

Eric Rosen: Oh my God.

Fabrice Grinda: So everything I own fit in my carry on, because of course I don’t want to, I didn’t want to check anything.

My tennis bag, because of course I still need to play tennis and padel, and my backpack, which I have my computer and Kindle.

The logic for it was twofold. One is, as we get older, I found that the quality of my friendships was framed. In the sense that, when you’re a kid and, you’re in college, you’re remaking the world, you’re seeing your friends all 24/7, you’re daydreaming about the future and all of a sudden people get busy with work, with wife, with kids, with husband, and instead of seeing them weekly, you start seeing them every 6 weeks and when you meet them, it’s no longer, let’s remake the world!

It’s a biographical update in the last six weeks, since I last saw you, this is what happened at work, my kids, et cetera. And it’s okay, but it’s not the reason we became friends to begin with. And so, I decided, you know what? I just sold my company. That was in 2013. I sold OLX and I now have the flexibility and freedom to invest in those friendships.

I want two things go back to A. to first principles. If you have an apartment, you go there. If you live in a city, you go there. If I have nothing, every day I can ask myself, where do I want to be? What do I want to do? Who do I want to see?

And then, by having no obligations, I can try to go and rebuild proper relationships with my friends and family, considering that I’ve been working 100 hours a week, 7 days a week, for the last 20 years.

And so, I tried a few approaches. I went couch surfing first, for my friends’ couches. Which was actually not a winning strategy because ultimately embedding myself in their life when they themselves were still busy with kids and work, et cetera, it didn’t work. So, I iterated a lot of that model. So, within six months, I decided, okay, that didn’t work.

I lived in Airbnb. So actually, I lived in Airbnb in New York, which was amazing. There were this, all these billionaires that had like these 20-50 million apartments that were empty. And so, I could be in every neighborhood like for a month. And these beautiful places and host amazing events, et cetera.

And so that distributed living and beautiful Airbnb around the world. I absolutely loved and I found a way to rekindle with my friends, not by living in their couches, but actually bringing them together at places where it was easy for them to go to during school vacations where there were activities for their kids.

And so, I did it around my birthday in August and every Christmas and New Year’s to the point that now I fly 50-60 people every year to my place in Turks and for Christmas my family and my extended family. So, my last name is Grinda, we call ourselves the Grindaverse. And its super fun and it’s been an amazing way to reconnect with friends and family.

The reason my acid light living ended is twofold. First, New York passed an anti-Airbnb laws. And so, all this inventory disappeared in 2015, all the high-end inventory. And then number two, I more recently started having kids and now I have a son who’s two years old. I have a daughter who’s going to be born in February and I have a five-month-old puppy.

And those three things are not acid light. Let me tell you that I can have 50 items, but I think my son personally has 5,000 items and no longer is compatible with acid light living.

Eric Rosen: Well, that’s a great story. I hadn’t realized, you know, the extent of why you did it and that’s fantastic to hear. In a similar vein, I retired early, my dad died when I was five and I don’t remember anything about my dad and I wanted to give my kids something I’d never had, which was a present father and I, for the last seven or eight years have been with them, you know, full time, which has been great.

Now I’m at a different stage, they’re 17 and 16. Dad isn’t nearly as cool as he was a few years ago, so I need to go find something else to do now.

So, you know, you live an interesting life with a lot of hobbies other than tennis, which you highlighted. What are a couple of things that you like to do when you’re not couch surfing on your friend’s couches?

I kite surf, I heli-ski, I play padel, which is a tennis derivative which is big in Hispanic countries. And I do adventure travel. For instance, earlier this year, I walked to the South pole, you know pulling my hundred pounds flood and negative 50 temperature, 2 weeks fully disconnected.

Fabrice Grinda: And, and I’ve done things like that where I’ve crossed Costa Rica on foot from, and bicycle from the Atlantic to the Pacific with just my tents and sleeping bag.

Eric Rosen: Okay. You lost it. I’m not doing either of those. That’s not happening.

Fabrice Grinda: I do a lot of these things. And then and, and non-athletic hobbies, I read 50 to a hundred books a year. I write a blog on whatever crosses my mind from macro to tech trends, to book reviews, to whatever. I love writing. And yeah, that’s basically it. Then I’m trying to being a cool father because to a two-year-old, you’re still very cool.

Eric Rosen: Yeah. Well enjoy it until it lasts, Fabrice! Cause let me just tell you that coolness don’t last forever. It’s 17. You’re not that you’re not going to be that cool. So, it’s been great. Let’s end it with what’s your favorite part of being a 3i member.

Fabrice Grinda: The community, I’ve been meeting amazing people. Like we’re playing at poker tournaments that I host or join. Actually, we’ve got a lot of investors in my fund out of 3i and seeing amazing opportunities. So, it’s been fun. I love Mark and what he’s built. I’ve loved and known him for forever. And I’m very happy to be a part of 3i.

Eric Rosen: Well, we’re very happy to have you. This has been a very enlightening conversation.

I know all those who have the chance to watch, we’ll learn a lot from. So, thanks for taking the time with us Fabrice. And I look forward to seeing you again soon.

Fabrice Grinda: Thank you for having me.

Eric Rosen: Thank you.

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