Inside the mind of a VC

7 questions with Hussein Kanji, Partner, Hoxton Ventures

How does a VC choose the right investments? 7 questions with Hussein Kanji, Partner at Hoxton VenturesWhat are you looking for when assessing investment opportunities?
We have a simple criteria for investing.

Is this a new market or category? What has changed in the market that that allows this company to form today when it couldn’t have been born yesterday? Do we think the company can win this new category? And will the category and/or company grow into a multi billion
sized company? What’s the most important question to ask a start-up in which you’re considering an investment?
Who are you going to hire and why will
they join you?

Where are the biggest opportunities and what regions are you actively investing in?
We’re bullish on eastern Europe producing more technology companies. We’re also equally bullish on many of the tech hubs in Europe, including many of the capitals, e.g. London, Paris, Amsterdam, Copenhagen which all have flywheel effects.How do you conduct due diligence to ensure minimal risk and high returns?
We use our network in California to figure out what everyone else is seeing and if the company in best in the world, or best
in Europe. What are the biggest challenges the LPs and GPs alike are facing in venture capital?
The great unwinding of the momentum trade. As markets went up and to the right, people piled onto what looked like sure things. Now that the tide has come out, people have realized they have overpaid and what looked like great investments their peers and colleagues were making may have been less than stellar businesses. This is going to take time to unwind.
How do you expect the market to evolve in 2023 for venture, fundraising and start ups?
I would have said harder to raise funds, but that’s not turning out to be the case. Hot sectors are as hot as ever (think generative AI) and new funds are still launching. It shows the power law is working: The best in class companies and funds are still active, but the average and median are challenging
places to be. What advice would you give to a founder pitching to a VC?
I’d still say FOMO triumphs in our industry and that can be socially engineered. It’s sad, but as a founder you have to create scarcity and if you do, it’s easier to raise

Hussein Kanji speaking at SuperVenture 2023