Philippe Schwartz

Partner
BostonUSA

What’s a moment in your professional life you’ll never forget?

In the early 2000s, I was the divisional CEO of a telecommunication company. While we were in the process of acquiring a company owned by great technologists, I realised that they were not aware of the reality of the market and the value of their company. I decided to offer them 50% more than the amount of money they asked for. I knew they were asking too little, I knew I would need to work for many years with them after the transaction, and I also knew they would realise soon enough that it was a bad deal for them. You can imagine the face of my attorney who thought I was the naivest business person he'd ever met. In retrospect, this was a great decision and we ended up building a very successful and long-lasting partnership.

What impresses you in the first meeting with an entrepreneur?

Humility and decisiveness, passion to solve a very big problem and a willingness to change the world. Being a fun, energising person that I feel I’d love working with, every day if necessary, including getting phone calls at 2am when the person is having cold sweats in the middle of the night.

What’s the most insightful question you can ask a founder?

How can I help you? Not in the context of a customer support call, but at a deeper level. Firstly, I want the founders to know that if we end up investing and working together, I am here because I truly want to support them. Let’s not forget that VC exists thanks to entrepreneurs doing the hard work. This is not a one-way street where only the founder is on the spot, it is also about me proving that I am entitled to help her/his/their company. Listening to the answer also teaches me a great deal about the founders’ willingness to learn from others and expose their needs and challenges.

How does a successful board operate?

The board should be the extension of the team, made up of people who truly have the interests of the company at heart, who can contribute from their diverse and relevant backgrounds and are genuinely motivated to help. If you have investors who are aligned with the company’s vision, there shouldn’t be a contradiction between representing an investor on your board and consistently supporting the company’s interests. Don’t accept politics or power games. Your board members should be engaged, supportive and honest. The founder is responsible for making decisions, but if your board believes that you are about to make a poor decision, it is their duty to convince you of it.

What in your childhood made your career trajectory probable?

I was born and raised in France. Growing up in a family of immigrants who fled Nazism, I was exposed from an early age to an unconventional, dislodged and trauma-stricken community. This exposure pushed me to rise beyond conformism and build my confidence to allow me to tackle new realities. At the age of 18, I made one of the most pivotal decisions of my life and decided to immigrate to Israel; I served as an officer in the Israel Navy, studied engineering and started my first company. The transition from France to Israel at a relatively young age to a new personal and professional life, without my family, was a period of intense transformation. Not choosing the “normal” path, as well as the need to re-invent myself to adapt to an unknown environment, have certainly helped shape my career path as an entrepreneur: starting a company is similar, as it requires constant adaptability to unforeseen changes as well as the ability to embrace the unknown. These experiences have helped me understand and support the companies in which I invest.

What are you good at that you didn’t expect to be?

Being a good husband and father (at least this is what they tell me).

Today, I’m excited by...

... meeting and working with passionate entrepreneurs; these wonderful people who want to change the world.

Where’s the joy in your work?

Connecting with, investing in and supporting amazing founders. Establishing that deep personal bond and mutual trust during the roller-coaster ride of building a company. Being part of its evolution through the early days to a larger growing organism. Going from a few employees to hundreds and more, from tiny revenues to 10s and 100s of millions and more. The changes in numbers are great, but even more exciting is the thrill of human adventure and capacity. It’s no different than seeing your children evolve from childhood to adulthood.

What was the greatest lesson an early job taught you?

“Run your business, don’t let it run you”. This is actually the title of a book I read a few years ago, but it characterises well a great lesson that I learned from my experience as an entrepreneur transitioning to an operator of large-scale businesses. Starting your own company can be a daunting task: long and lonely days and non-stop pressure to deal with challenges. But all this hard work is not enough. To get to the next level, you need to stop being a “super-employee” and become a leader who can attract amazing talents and a team that can help you scale the business.

How did your last job equip you for this one?

Experiencing the thrill but also the harsh reality of being an entrepreneur and operator myself. It had been, like most start-ups, a series of roller-coasters that allowed me to build pattern recognition from lessons learned out of actions and subsequent mistakes. These experiences can hopefully help the founders of the companies I invest in.

What do others not know about Square Peg?

I join the weekly partnership calls at 12:30am. Yes, every week.

What is similar between Square Peg and the founders you back?

Full honesty and integrity, no politics and relentless willingness to help each other. Complementary skills of the partners, similar to the quality of a founding team made of diverse talents.

Companies

Square Peg Capital Pty Ltd (ACN 164 352 229) is an Authorised Representative of Victoria Capital Pty Ltd (ACN 159 228 314) AFSL 428989