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Summary

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Join us as we speak with Rachel Troublaiewitch, co-founder of Gateway Private Markets; one of the most innovative private markets platforms we've seen. We discuss the foundations of the startup sector and the rise of unicorns, with perspectives from diverse investors like hedge funds, public market investors, and family offices.

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Get a look into the $1.7 trillion venture capital market, and understand how it could be democratised. Rachel provides deep insights into the evolution of this market, highlighting both challenges and opportunities. We discuss the significance of an efficient capital flow ecosystem and how Gateway Private Markets is addressing this need. Uncover how issues around access to liquidity and due diligence are being tackled.

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Learn how Gateway Private Markets is empowering founders and intermediaries, ensuring liquidity for early investors. Tune in to gain valuable insights and perspectives that can inform and shape your own journey in the world of venture capitalism and entrepreneurship.

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Transcript

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Rachel Troublaiewitch: 0:00

So, if you look at the companies that are impacting our lives the most, it is this innovation startup sector, and what we saw as a challenge was that it used to be this very closed world of the big guys have access. Your biggest venture funds were funding a lot of these startups and that's that kind of misconception around the big guys have access and the small guys don't, and that's still very much true now. But what's happened over the last 10 years is we've seen incredible growth in this market that you have unicorns being founded every day. But it's not just the venture funds and the founders. You now have hedge funds, you have public market investors this concept of family office that are now active within the space.

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‍Jonathan Nguyen: 0:52

Hello and welcome again to the untold podcast. Today we have someone a little bit different, mainly because we've typically interviewed male founders and there's no other reason for that than they're the ones that have just popped up on our radar and we've been deliberately trying to be more inclusive. And today we have Rachel from Gateway Private Markets. Rachel is going to tell us a little bit about the problem that she came across that led her to setting up what is probably one of the most innovative private markets platforms, certainly that we've seen. Rachel tell us a little bit more about yourself and about Gateway Private Markets.

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Rachel Troublaiewitch: 1:37

No, thank you, Jonathan. So excited to be here and to be the first, but hopefully one of many, female founders, so that's really exciting. Look, I'm one of the founders of Gateway Private Markets. I started my career, as expected, in Asia as an ex-banker.

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Jonathan Nguyen: 1:54

So always you weren't holding out against you. Try not to.

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Rachel Troublaiewitch: 1:58

I was always in banking, really focusing on supporting corporates in Asia around tapping into capital flows whether that's equity debt, managing their cash balances and so that's an industry I've always been in, but four years ago so I built my career within banking. I left in 2012, really with the intention to take a lot of those financial skills I had built and see how I could apply it within actually a world that was evolving very, very quickly outside of the banking industry, and the fastest-growing industry that we see now is venture capital. Let me put some context around it. If I ask you what are the three companies that have probably changed your life the most, what would you say?

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Jonathan Nguyen: 2:42

I would say Facebook, Google and probably now OpenAI, exactly, and I think a lot of people would agree with you.

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Rachel Troublaiewitch: 2:49

And if you look at the similarities between those three companies OpenAI is still a startup, fast-growing startup Facebook and Google they're now public, but they started off within the venture ecosystem. So if you look at the companies that are impacting our lives the most, it is this innovation startup sector, and what we saw as a challenge was that it used to be this very closed world of the big guys having access. Your biggest venture funds were funding a lot of these startups and that's that kind of misconception around the big guys have access and the small guys don't, and that's still very much true now. But what's happened over the last 10 years is we've seen incredible growth in this market, that you have unicorns being founded every day, but it's not just the venture funds and the founders. You now have hedge funds, you have public market investors this concept of family office that are now active within the space, and so what we realized when I left banking was the biggest problem is within even the largest institutions in venture capital, they need to more efficiently tap into how to access these companies, how to actually get liquidity in companies that historically should have been public, and how to basically be efficient in terms of managing those two-way capital flows. That was the opportunity that we saw and why we opted to ultimately found gateway private markets four years ago.

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Jonathan Nguyen: 4:11

Yeah, it's really interesting you brought up that point, because what we see is traditionally the idea of VC was a very specific type of investor. But, as you mentioned, from what I see of startups at the moment there's family offices, there's hedge funds People traditionally wouldn't have considered to be VCs.

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Rachel Troublaiewitch: 4:33

Exactly. Just to give it a bit of context, when we say VC is big, again we see the companies that we interact with day in, day out. Now I heard a number that the global VC market is $1.7 trillion. Let's compare that to something that's larger than the GDP of Australia today and it's growing. So you really have a market that's so big now continues to grow. That, how you interact, how these different institutions interact with each other, you actually need a more fulsome ecosystem to support the capital flows. How to help these founders to grow, how to actually direct money in, money out.

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Jonathan Nguyen: 5:10

Okay, well, let's drill into that a little bit. So, as I understand it, it's a platform you can match founders with money. What else is on there? So you mentioned like help with business support and these other things? What else can the platform do?

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Rachel Troublaiewitch: 5:28

So, with that gateway we have built, or what we see for the market, is the creation of an institutional marketplace for global venture capital. And what does marketplace mean? It's the same way that you look at any kind of asset class, which is that you need a big network of the right kind of investors, founders, shareholders that are looking to invest in these companies. They're looking to get liquidity, they're looking to actually manage their portfolios. So, within the gateway marketplace, we've actually been building out tools, the infrastructure, so that these participants your venture funds, your family office, your founders can actually trust that they can deal together and that they can do so in a very efficient manner.

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Jonathan Nguyen: 6:13

And on the platform itself at the moment. Are there any brands we would recognise?

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Rachel Troublaiewitch: 6:19

A lot actually. So on the marketplace we cover actively about 130 global venture companies, some of the names that you would know well that are very popular now ByteDance fantastic example OpenAI, some of the most innovative companies like Impossible Foods. Right, we were active in even a lot of the Asian companies like Grab and Gojek before they went public.

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Jonathan Nguyen: 6:42

That's a lot of traction already. What do you think like getting to this point? How long have you been operating now?

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Rachel Troublaiewitch: 6:50

So we founded the company four years ago and have been building out an incredible team and just really continue to see an incredible amount of support from our clients and our participants.

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Jonathan Nguyen: 7:03

So about four years now. So what I see is this is a tech platform in basically the finance business. Everything is screaming out, very male-dominated. You must have come across some challenges like getting it set up.

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Rachel Troublaiewitch: 7:19

A lot, and I don't think it's specific to our business. Every founder has faced challenges. I would say that the journey has been. Some of the challenges that we've faced have been both as a business that we were founded in 2019. So, immediately after founding, we had the protests in Hong Kong, we had COVID, we had FTX, Silicon Valley Bank, now credit Swiss, so we had a lot of pretty meaningful events that had a direct impact on our business, had an impact on our clients and actually how they manage their venture capital portfolios, and so that's kind of overarching within the broader business, and so making sure that the tools how we service our clients really fit within what's happening on a macro level were actually a big challenge, and it continues to be. The world continues to evolve.

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Jonathan Nguyen: 8:10

Judging by the news in the last few weeks. So I think we're quite settled yet, right?

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Rachel Troublaiewitch: 8:16

The dust hasn't fully settled. It hasn't fully settled, but we don't see it as necessarily a bad thing, right that we know you still have an incredible amount of companies that are delivering real innovation and value to the world. There was a bit everyone's talking tech bubble. Is there going to be a reset in terms of valuations? When is the money going to be unlocked? We see that we're kind of at that time now, and what happened with Silicon Valley Bank, even though they've now been bailed out, this is a good catalyst for it, and so we actually see this as a positive thing that you're going to have some great companies that will continue to come to the market, will continue to look for great synergistic investors, but how they can do so efficiently, they need support, right, and so we're going to see, over the next, I think, three to six months, this kind of reset in investor and founder expectations. So we're going to bring those tech valuations down to a much more healthier level, and we really need to shift this mindset around everyone who's active within venture capital, around how they can actually interact together. An interesting way to look at it, at what we're doing with our business. It's not that specific to finance. If you looked at when, I think, Airbnb was founded? If I'd asked you, would you get into a stranger's car?

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Jonathan Nguyen: 9:33

at that time, absolutely not.

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Rachel Troublaiewitch: 9:34

Absolutely not right. Would you stay in a stranger's house?

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Jonathan Nguyen: 9:37

Yeah, no.

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Rachel Troublaiewitch: 9:38

But now you have Airbnb, right. We're facing a similar type of challenge within our business, that within venture capital, that trust or the ease in which you can deal with somebody that you don't know within a financial setting. That's kind of where we are and that's what we're fighting. In terms of the road blocker for the market is this status quo, that you know what it has to be difficult, that you have a lot of mistrust in the market, that every transaction is very, very complex. But it doesn't have to be that way, and that's the fundamental thing that what we're building with the gateway marketplace we're looking to address.

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Jonathan Nguyen: 10:13

Is it oversimplifying to say it's like the eBay of venture capital?

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Rachel Troublaiewitch: 10:20

I think it's a fantastic analogy. Actually, ebay, Amazon, all these kind of marketplace models, that's exactly what they do, right? Taking your eBay or Amazon example further, you could always buy books. You go down the street, there's five different bookshops, but it's not efficient, it's not easy, right, and what Amazon did was to provide a platform where they brought together all of the best book publishers together. But they also made it easy because it wasn't just about having access to the books. You could have that if you walked to Barnes & Noble, but it was a way that you could read the reviews. You would know that the sellers actually trusted that they would easily get the book to your doorstep logistically. And then, once you have that market, they take it further, they introduce the e-books, and so that's the evolution that we saw within consumer goods, and that's why we see that marketplace model applies very, very well with Inventory Capital as well.

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Jonathan Nguyen: 11:16

So is there an element here of a somewhat of a democratisation of capital? I guess, like a lot of these deals and venture funding comes from networks, old boys networks, the handshake that people I worked with at Goldman, people I worked with that JP, that kind of thing. Do you think that this will kind of open up that marketplace a lot more?

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Rachel Troublaiewitch: 11:41

I think so, and we already start to see it now. In that, the number of new participants to the market, some of them that you highlighted before, they are not your traditional venture fund players. They still play a very important role, but you just have more people coming in. You have private banks, you have family offices, you now have asset managers who are dedicated only to buying existing shares to the secondary market and so these are not your traditional players within the venture space. And how these traditional and these kind of new entrants can actually transact together or connect together, it's not natural, it's not easy, without kind of a neutral platform, to help facilitator, provide that infrastructure for them to trust and be effectively very efficient in how they deal together.

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Jonathan Nguyen: 12:32

So we talked a lot about the venture side and the capital side. What about for the startups and for founders? What's the experience like?

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Rachel Troublaiewitch: 12:40

That's a really great question. So we had the incredible experience of working with a founder who had built out a global unicorn, HQ in the US, and so they had offices in the US, Asia, Europe. He had actually delivered. He had built this incredible communications unicorn that was valued at over a billion dollars, so he delivered the value he was supposed to to his shareholders, and a lot of those were some of the largest financial institutions. Great. The challenge was for himself as a founder. The company was still private. For himself, for his executive team, they had no access to liquidity, and so that's a big challenge, because you're really talking about people make incredible sacrifices, the time, the blood, sweat and tears to build this business. They're successful and they have no access to liquidity. And we hear this often you have a lot of equity value but you can't afford your mortgage, can't send your kids to school, to a private school, and so that's a big challenge. And so how do you actually open up that capital that still maintains the alignment that the founders are still very much aligned to? Building the business? You have continued support from your shareholders, but you're able to actually have some liquidity in a fundamentally still private business. That's something that we see, that trend starts to open up In Asia. It's still very, very early in terms of how to do that. The mindset around it's okay for some of those founding teams to have a little bit of liquidity and maintain alignment, and that needs to change in order for this market to actually continue to grow.

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Jonathan Nguyen: 14:15

So if I was to, this is a tricky question. Okay, obviously you have a marketplace, which is a network, value proposition, so on, how would you say the value prop is? How would you articulate the value proposition in a sentence for investors?

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Rachel Troublaiewitch: 14:37

So if I had to put it in one line, I would say that we are building specialised tools and infrastructure so that any institution can transact with trust and efficiency within global venture capital.

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Jonathan Nguyen: 14:55

Okay. So you mentioned that you started in 2019. There were all of these headwinds, okay, but you found success. There's traction. So what do you think is happening right now, in this moment, in this kind of zeitgeist that is driving you forward? That's getting you to the next big thing.

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Rachel Troublaiewitch: 15:18

The interesting thing is actually, over the past few years, the venture market was very hot. At some point, I think, you had a unicorn being created every day in China and there was a lot of exits. The IPO market was booming. You could create a startup. You knew you would be able to list it, you'd have an exit and the post-IPO performance would continue to support that. So in a time when the markets are hot, a lot of the pain points or a lot of the fundamental questions aren't that apparent. Now it's the complete opposite, right? Public equity markets haven't continued to have pretty weak performance, so therefore you don't have a lot of those exits. The access to venture debt Silicon Valley Bank it's much smaller than it used to be, and so therefore you actually have this real need where a lot of the most critical pain points around access to liquidity. So any kind of exit and a symmetry of information is very, very apparent now, and this is actually a driver that is very supportive for our business, because people now realize that you need to actually look into the fundamentals of a company. You need to understand where you're putting your money and how you're actually able to guide those investment decisions, whether you're going in from a fundraising, whether you're going in through a secondary by buying existing shares that need to have the right kind of connectivity and do your fundamental analysis is more apparent now than it used to be. So this is actually a very, very good driver for our business, because people really need to address these pain points.

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Jonathan Nguyen: 16:56

So when someone comes onto the platform they can, Is it like a pitch book type of like data interface where you can like get information on the companies that you're wanting to investigate?

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Rachel Troublaiewitch: 17:07

As an institutional platform. We actually sit at really the intersection of Fin and Tech, in that we have built now around 500 institutions within our network, and so these in Asia are some of your largest VC's, family office asset managers and global banks. But you know, this is a very traditional network. In that sense, how we service them is by, to your point, providing more transparency. That's data around where the market is pricing a particular company, and so that's available through some of our dashboard tools. At the same time, we know that when a founder is looking to raise, when a shareholder is looking for liquidity, how do you actually find the right counterparty? A lot of that is driven by our own internal data analytics. We profile who are the investors that are actually active within FinTech, how many of those actually believe in Asia, what's their investing track record, what kind of investor are they. That's the kind of data engine that powers a lot of the matching that we do as a platform, and the final part is just on the infrastructure. Once you have actually a buyer and a seller who are looking to transact together, how do they actually close? How do they settle? How do they do the due diligence? How do you manage the documents in a company-friendly manner. So those are a lot of the traditional kind of legal execution processes that we've also built into our marketplace.

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Jonathan Nguyen: 18:32

So that could potentially disappoint a lot of advisors.

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Rachel Troublaiewitch: 18:36

Yes, in a sense that the same way you look at OpenAI and you question whether AI is going to take away a lot of that creative process, we don't see it quite that way, in that a lot of the global banks that we work with, a lot of the intermediaries there are clients. We provide them with the right kind of tools. Whether that's a founder that they're representing, we open up this really fragmented network of venture participants for them. We provide them the data so they can advise their clients on how you should think about your pre-IPO fundraising, how you should think about a sale. All of these tools actually we provide to the whole ecosystem and this is a fundamental belief that we have is that in order to really build a true ecosystem in venture capital, you actually need to build tools for everybody the founders, the financial intermediaries, the investors. You cannot capture the market by only servicing one part, and so that can be pretty controversial, but that is a fundamental belief that we have to build a true ecosystem.

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Jonathan Nguyen: 19:40

I'm getting chills. So, okay, great, and I think you touch very much on my next question, which was you know what's the kind of innovation in your approach? I think you crystallized that really well. Then, really, it touches on the final question, which is the first step is democratization. What's next? The next big, powerful thing that you think will change the future of this business?

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Rachel Troublaiewitch: 20:13

I would actually say our first problem is creating more efficiency within the institutional market, just allowing the biggest investors, the biggest founders, to transact easily. Actually, the next step is then I would actually call it democratization opening it up even further. We know that naturally means that access to individual investors like ourselves. That's going to be the next big wave. But before you clean the market, make it easier for even the most sophisticated investors to participate. It's very challenging to democratize. That goes to your earlier point. What we're building out is not about automation. It's not so much about digitization. It's not just the access of the big to small. It's really providing building the pipelines so that money can flow smoothly. Then it's about opening in that up into a democratized state. Then the final stage there, our end goal, where we really see this market has to go, is ultimately to support a venture company, but all the way from their first founding so where we were, 2019, all the way until their IPO. That's where everything that we're building is driving towards that vision that we can create the fastest growing network of every investor, every shareholder that they need to be interacting with and making it easy for them. Easy for them to do that first seed fundraising round Easy for them to actually align their employees and give them equity, real participation in the business that they're building together. Then, all the way through to actually for those first investors that supported you when you just had an idea, being able to give them back liquidity so that they can do what they do best. Continue to support early stage companies, giving them that liquidity and really building out that company until you get that successful exit IPO sale. That's our vision that we'd like to build out all the tools, the network and the ecosystem to support a company from start to finish.

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Jonathan Nguyen: 22:23

That's great, absolutely Good luck.

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Rachel Troublaiewitch: 22:25

Thank you.

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Jonathan Nguyen: 22:27

We expect to see you on Bloomberg next right.

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Rachel Troublaiewitch: 22:30

They're right outside the door. No, it's been great. I want to leave you with a thought. This applies something I feel very deeply, I'm sure for yourself as well, and probably for a lot of your listeners. It's this amazing quote by Ben Horowitz in his book the Hard Thing About Hard Things. He said you know, start up life, you only experience two emotions terror and euphoria, both of which are actually enhanced by a lack of sleep.

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Jonathan Nguyen: 22:59

And copious amounts of coffee.

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Rachel Troublaiewitch: 23:01

Copious. I thought that was one of the best things I've ever heard.

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Jonathan Nguyen: 23:05

Well, it's been great chatting with you, Rachel, and I hope that we get to chat soon. Thank you everyone for joining. This is a great episode for us. Again, we've got a different side of the story basically someone who's a founder, but also on the money side somewhat, and a platform to match both. So looking forward to catching up with you all again and we'll put up Gateway Private Markets details. See you later.

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