I had the privilege to be interviewed by Dr.Dorothy Kelso, global head of SuperReturn, a leading organiser of private equity conferences and the organiser of the famous SuperVenture in Berlin.

You can find the engaging 5-minute Q&A below, which should provide readers with a good snapshot of our investment thesis.

In this series of 5-minute interviews, I shine the spotlight on up-and-coming fund managers in private markets across the globe. All geographies. All strategies. All sectors.

Here’s my conversation with Ian Sosso, Founder & Managing Partner at Monte Carlo Capital.

Quick facts about Monte Carlo Capital:

  • Sector: Technology
  • Thematic focus: Businesses solving big problems or addressing significant inefficiencies. We invest across verticals, including AI, IoT, Space, Fintech and Health Care
  • Investment stage: Seed stage
  • Geo focus: US, Core Europe, UK
  • Year established: 2009 (initially to invest my own capital)
  • Location: Monaco based team, Luxembourg fund
  • AUM: Prior to launching the fund, I ran 50 syndicates with over €45m invested
  • Number of funds closed: None (currently raising my first fund)
  • Current fund size: €15m target (hard cap at €25m). First close in March 2023
  • Current fund life: 10+1+1
  • Equity size invested in companies: €250k initial investment; €250k for follow-ons

Q: What’s Monte Carlo Capital’s investment strategy?

A: We invest in tech businesses that solve big problems with a very large addressable market or businesses that address significant inefficiencies.

Q: What is the size of market opportunity in this area?

A: It’s huge. Tech growth is strong across many verticals. Each vertical feeds off the other. Tech is also global. We believe it is important to be aware of what’s happening in all the major tech economies and across sectors. We follow all the verticals and avoid the trap of fads that many fund managers fall into, and invest in the US, core European markets and the UK.

Q: How do you source deals across verticals?

A: We source in a number of ways. I am very involved in the European angel ecosystem. I am a board member of the European Business Angels Network (EBAN), lecture at university and write white papers on tech and venture. This leads me to speak at conferences throughout the year, all of which help build the ecosystem. We have a significant inbound deal flow as a result.

Secondly, we have a partnership with a deep tech venture builder in the US.

Thirdly, as we are perceived as value added investors, other VCs invite us to co-invest.

Fourthly, we actively follow cohorts of the 4-5 leading accelerators in the US and Europe and have recently invested in a company out of YC (SaaS) and Seraphim (Space tech).

Q: What hands-on expertise do you have?

A: My 15+ years’ experience as a business angel has been very hands-on. The 50+ investments we have made as part of a syndicate were in 25 companies in which I acted as lead, sometimes over multiple rounds. In many of those businesses, I have been the closest to being an entrepreneur whilst remaining an investor. We keep investing in companies as they grow and we hand over to another lead when the tickets become too large for us.

For instance, we have invested as a syndicate in one French company that made over €300m in revenue last year – these are “real” revenues, not GMV – and in which I led every round. We represent around 75% of the investors and have invested around €6m.

For another company, this time in the US, I led the initial 4 rounds in which we invested $7m. I travelled across Europe and the Middle East with the CEO when the company started. It has grown and is now raising a series B round

The businesses I have been an active lead investor in and where we have built a substantial position in have been in a broad range of sectors, from Industrial IoT, to Medical Devices to Software, and I have been on the board of many of them.

With the launch of the fund, we will be raising capital from a more diversified group of investors and will be focusing on being co-lead or co-investor with other VCs, which would allow us to do a lot more investments in a year.

Q: How are you building your team and what’s your background?

A: I am a solo GP. We have an analyst, a business manager and an intern.

By way of background, I was born in Monaco, educated at the LSE in the UK and was formerly head of a European investment bank in Asia. I am a board member of Brussels-based EBAN, Winner of the Best European Angel Investor award from EBAN, have lectured VC for 5 years to MBAs and MSCs at Monaco University and am a board member of the Monaco VC Association.

As the fund grows, we will of course grow the team as well.

Q: How do you see your business scaling?

A: We have a significant deal flow across the geographies we invest in. We are organised to handle a much larger fund, but we need to start with a small fund and build from there.

We also offer our LPs a lot of co-investment opportunities. So although it’s a €15m fund, we are likely to be investing another €20-30m via SPVs over the life of the fund.

Eventually, I think our sweet spot will be to deploy yearly around €10m via a fund and €15m via SPVs. This will provide us with enough human and financial resources to be an attractive investor, do follow-ons, whilst being small enough to generate substantial returns and give the flexibility to our LPs to add directly if they want to.

Q: What are the key ingredients of your success?

A: The first one is that Monte Carlo Capital was born out of my own personal investment strategy. I ran trading floors as a banker, in pretty much every asset class. Early-stage venture is in my view the highest returning asset class, as long as it’s done properly. And I have built a strategy around that.

Second, I have been around for a while. I have seen many bubbles and bursts, across numerous asset classes. Many investors often follow fads, especially VCs, and ignore market cycles. Risk management is critical in venture as in any other asset class. I have run risk. Many venture investors ignore risk management at their expense.

Third, I have built a network of people over the past 30 years that money can’t buy – serial entrepreneurs, heads of large organisations, heads of banks – many of whom have become friends over the years. Some are investors with us. Venture is not for everyone, but in many instances, they have been instrumental to Monte Carlo Capital and our portfolio companies.

Fourth, which is related to a previous question, I have built a strong experience as lead. We have had larger and more concentrated positions than most angels and VCs want to take on. I have learned to sweat it out with management in many critical situations. Although we are moving with the fund to a more traditional seed VC model where we co-invest in syndicates with other VCs, the decade of experience as a very hands-on lead will make a difference through all our venture investments.

Finally. I am relentless. Truth is, I love what I do. I can’t think of anything else I want to do.

Q: What advice would you like to share with our readers?

A: Don’t follow fads. Think for yourself. Do your homework. Work hard. Be truthful. Be relentless.

Link to the original article.