We are delighted to publish a short interview with John Snyder. John is an original founding member of Cambridge Angels and a 2x exited entrepreneur, the latter being a ‘double dragon’ for its backer IQ Capital.
Can you give us a bit about your background?
I have spent my whole career in the field of information retrieval and search keyword technology. My first company was Muscat, a Cambridge University spin out, which was in the initial wave of search engine technology and which I sold in 1997 aged 31 to MAID plc. This made my sole VC investor a 10x return, and angel investor Hermann Hauser 3x within six months. MAID was London & Nasdaq listed, and I used Muscat to build a new internet search engine (twice the size of Alta Vista and at the same time as newco Google was just starting out). Despite arranging $35m to spin out the business unit, the CEO blocked the deal, so I then had my first and only ‘proper job’ employed by Cambridge University, my former alma mater. Here I helped the Cambridge Entrepreneurship Centre from 2001 to 2003 in preparing University spinout entrepreneurs by surrounding deeply technical founders with experienced mentors, such as Robert Sansom, Andy Richards, Sherry Coutu and more. Several of these eventually became founder members of Cambridge Angels back in 2001.
David Cummings, Martin Bloom and I worked on raising a new venture fund with an accelerator, but I also itched to get back to being an entrepreneur again and my second company was Grapeshot, a contextual intelligence platform, which we sold to Oracle Corporation in 2018 and which created a ‘double dragon’ return for our backer, IQ Capital, with an average x15 return for all our investors. Both companies were founded with Dr Martin Porter, one of the most cited academics in IR search algorithms.
What do you see as one of your key skills in the business creation process?
Martin Porter was definitely the academic brains in both companies. My studies had been in Maths, Physics and Geography before studying Anthropology and from this I see my role as taking a piece of deep, core, technology and finding its place in the market. Rather than try to sell to many companies and deliver high revenues early, which lots of VCs encourage because of fund dynamics; with both start-ups I deliberately selected one or two multinational organizations and then went deep with them, often with minimal revenues to begin with, to really understand how they worked, their decision-making processes and their common pain points and to then craft our product around this. Reuters was the guineapig for Muscat and IBM played this role for Grapeshot. Both Reuters and IBM eventually became key early accounts for us, providing brand credibility and giving us what I call the “peacock effect” (looking bigger and more attractive than we might have been).
It sounds as though you deliberately went slow in finding product-market fit but how did this then fit with obtaining external funding?
Grapeshot raised a total of $22M but actually raised this in little $1-2m chunks, and often, but only when required. For us capital efficiency (and accurate forecasting) was key. Often entrepreneurs are advised to ‘raise as much as you can’ but there is a lot of vanity attached to a large raise with little point in having money sitting around, unused, in the bank. We raised when we needed to off the back of a positive growth story, and this gave us flexibility; we were able to turn down one $10M investment offer and another from Reid Hoffman when the terms were not right. It was tough though, as when we started
Grapeshot I took out a huge mortgage to fund it and then borrowed more to enable me to lead a further funding round. Here it really helped having some supporting/contributing fellow Cambridge Angels around me at the outset, so we could be the ‘term makers’ rather than the ‘term takers’ in one of the early rounds. Cambridge Angels who invested early in Grapeshot include David Cummings, John Taysom and Sherry Coutu.
You regularly talk about the importance of a corporate culture. Can you expand on this?
I was once in a very high-powered dinner with the Dean of Cambridge University’s MBA Judge Business School with the co-founders of ARM, Abcam and other notable Cambridge entrepreneurs around the table. The Dean professed that the ‘numbers’ were more important than ‘culture’ in their business MBA case-studies, and he was immediately rounded upon by all the dinner participants for being absolutely wrong! Your culture is the backbone on which a business is built and inspires employees to believe in its mission. When we were building Grapeshot we did an early internal staff and external customers audit and the three things that came back were ‘Simplicity’ (i.e. no acronyms), ‘Transparency’ (i.e. say when doing well, or badly) and ‘Faith in People (i.e. go and make mistakes, we trust you). Culture became a particular focus as we rapidly scaled Grapeshot from a 100 to 200-person company; every new hire had to spend a week in Cambridge and when we opened an office in a new geography we initially prioritized exporting home-grown talent who understood our business and culture into those locations, alongside hiring local experience. In New York our initial team was plucked from our most junior ranks of London staff, prior to hiring a US Sales Director, and scaling with that culture transposed. Some young staff in New York would later swap with London staff, not just their job location, but also their apartment digs. I believe that this focus on one culture was fundamental in contributing to our growth success.
Your learnings from the last 20 years of angel investing with Cambridge Angels are worthy of another post, but could you give us a couple of companies currently in you CA portfolio that you are particularly excited about and why?
A ‘standard’ CA deal is where entrepreneurs come in and pitch their company to a group of angel investors who then go away and discuss it as a group, often over a dinner at one of the Cambridge colleges. There are plenty of rigorous questions from the array of angels who are exited entrepreneurs with deep operational experience, but we like to be a bit more considerate than seen on Dragon’s Den! One of my CA portfolio deals is Qureight who curate large volumes of medical data alongside AI-powered decision making, with a focus on lung and heart disease. I like the CEO and his team and have been very impressed with the commercial traction they have already had. It is a race to get the best data and the best algorithms at work to fast-track key decisions at pharmaceutical companies, contract research organisations and hospitals and they are currently raising their Series A.
A Cambridge Angels ‘Halo’ deal is where two or more Cambridge Angels invest in a company which might not even reach a formal pitch. I became the first investor into Vitrue Health which provides a tech-driven, fully managed service to reduce musculoskeletal problems like back and neck pain in desk workers. All while making you DSE compliant for remote, office and hybrid teams. Vitrue has subsequently raised institutional funds and growing rapidly. Why I like it? Health and safety at work, including home workers, is highly regulated now. A compliance agenda coupled with making sure your staff are not absent off work due to pain and ancillary conditions or illness, becomes a double benefit to employers, who are already obliged to comply each year with health audits, support for staff and compliance paperwork.
