Defying the Status Quo

Simon Sylvest is a highly active investor and entrepreneur with a tireless spirit. Whether it comes to fighting obesity, improving fertility treatment or finding a way to kill the pain of doing expenses, Simon is always on the lookout for opportunities to improve the way people work, live and thrive. Constantly keen to challenge the status quo and disrupt industries, he has an impressive history of investing in and helping build startups. Together with the Founders team, his track record includes companies such as Pleo, a spending solution to digitalize expense tracking, Son of a Tailor, a made-to-order, custom-fitted T-shirt brand, and LifeX, a hospitality startup that offers coliving and private apartments for expats, to name a few. During the pandemic, rather than remaining idle, Simon and his colleagues invested in and helped found six companies within a year, two more than they had hoped for pre-lockdown. 

Originally from Frederikssund, Denmark, Simon didn't jump into entrepreneurship immediately, even though he admits to wanting to be one since he was five. Before settling in Copenhagen, he spent two years in the UK and Canada, exploring and dreaming of skiing adventures. In the Danish capital, he studied at Copenhagen Business School (CBS), where he earned a BA in International Business and Politics and a MA in Applied Economics and Finance, and started working as a consultant. That quickly ignited an entrepreneurial calling and highlighted Simon's passion for making decisions and being at the forefront of operations. “To be at the frontier of whatever I do and not have to go through different layers of communication was what drove me to build my own company and be involved with building companies," he says. During his first year of his MA, he started a company called Talent Force along with three of his friends. The startup focused on developing case competitions for corporations, and it had customers from day one. "That was my first experience building a company, and we ran Talent Force for one and a half years until we finished our degrees." After that, the team was ready to move on to more significant projects and closed it down quietly. 

From there, Simon quickly ventured deeper into the tech space, meeting his future partners at Founders, Ulrik Trolle, Stefano Zorzi, Sebastian Stockmarr, Peter Heering, and Joshua Karjala-Svendsen. “We didn't know exactly what we were doing back then, but we were intrigued by the idea of building a company that was able to be involved in building, starting up and investing in businesses, and taking them from an idea on a piece of paper into being a real company," he says. They came up with the idea of a "startup studio" and started Founders in August 2012. 

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We discover who we are under pressure. Timing is everything, and as long as you keep it together, persevere, test your market and adjust accordingly, traction will find you.

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Founders' success has been increasing exponentially, and it has helped several startups to level up from dream to reality. Kontist, for example, started in March as an exploration project around financial security for freelancers and the self-employed, following the future of work trends and the rise in the gig economy. It gained forty thousand freelance banking customers and became the number one B2B neo bank in Germany in 2020. The series of startups created within the studio have since allowed Simon and his partners to buy back their shares from their investors, making Founders a fully partner-owned company. That makes Founders very different to conventional venture capital companies, since the partners are investing their own money into the businesses. 

Eleven years of running Founders has given Simon and his partners a strong level of pattern recognition, one of the main contributing factors to their success. "We are looking at different opportunities in terms of startups, but when we look back at what we've learned in the past years, I see that we're doing it with the same patterns – doubling down on that, actually. We've collected a lot of experiences, and we have some pattern recognition we can start to apply again and again," he says. "We'll continue to do the same things we've been doing so far. Our challenge is to figure out how to scale that."

Regarding the most significant lessons he’s learned through the years, Simon emphasizes that creating the right team from the beginning is essential, but he also highlights the need for self-awareness and personal development in order to make better business decisions. "I tend to be optimistic and visionary, focusing on what the next great company would look like," he says. "But that only works if you can take a step back, reverse engineer the process and focus on shorter periods instead. What happens in the next week? What about in the next month?" Simon also highlights that ideas are great, but customers are even better. "Get one customer, then two, then five, then ten. As you get traction, it will be easier to close the gap and reach the original vision. The path to building a sustainable business is simply to get new customers every day, as early on as possible,” he says. “And one step at a time, finding people that want to pay for your services." This is something he and his team at Founders still remind each other of every day. "It's easy to get caught up in whatever large vision we have for the future. Taking small steps and finding paying customers were a clear learning point." Simon is against the idea of "just do it." Yes, he says, there are examples of entrepreneurs who become successful in industries they have no experience in, “but why not look for problems and opportunities where you already have some unique insights and an understanding of the customer and the infrastructure, and build that unique offering there? Today, the competition is fierce and the big opportunities are often hidden, so always ask yourself where you have an insight that few others do, and start there.” 

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You may have to speak to one hundred investors before you find the right fit to fund you

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Over ten years of entrepreneurship and startup building has presented Simon with his fair share of challenges. Attracting talent to Copenhagen, for example, a city known for its high taxes and high cost of living, is not always easy. And when they do find talent wishing to move to the Danish capital, it's crucial to ensure a smooth landing. "New talent coming from abroad are leaping into a new job and an entirely new country. That's quite a process," he says. As startups might not have the same resources as corporates, it requires even more planning and consideration during the onboarding process – especially if the goal is not only to attract talent, but retain it as well. 

With the classic problem-solving mindset of an entrepreneur, Simon and his partners realized that there was a significant business opportunity in that problem, which led them to investing in and help build Life X. The startup provides furnished coliving and private apartments for expats in eight different cities. Initially, the partners would rent their own apartments for new employees as they arrived in Copenhagen. The short-term deal lasted from three to six months, and was an opportunity to introduce the new hires to a wider community, allowing them to connect to other Danes until they got to know the city. "This, in turn, became our company," he says. 

After successful exits and growth stories, Simon also learned valuable funding lessons. “Raising money from venture capitalists is a very different game than running your company," he says. Understanding the VC mindset and the business model is highly advantageous. "VCs analyze how valuable your company will become. If you understand that perspective, you can develop your sales and pitching narrative to fit that mindset," he says. This might not necessarily reflect what running the startup will look like day to day, but Simon highlights that these are two separate things. 

Additionally, he advises entrepreneurs and founders to stay persistent. "You may have to speak to one hundred investors before you find the right fit to fund you," he says. "You have to fall in love with selling. If you want your company to go from pre-seed to being profitable, you probably have to go through one or two big funding rounds. Develop your business model and have something tried and tested to show the VCs." Premature rejections can often be avoided by being well-prepared.