Jan Christopher Arp, Co- Founder Of Holt Accelerator- Supporting Top FinTech Startups Around The Globe!

Jan Christopher Arp is a fintech evangelist, passionate about improving society through finance and technology. He is Managing Partner & co-founder of Holt Accelerator that has currently invested in 27 early-stage Canadian and International Fintech, in which those portfolio companies have a combined valuation of $300M.

Previously, he founded Fintech Cadence, a non-profit that has trained thousands of individuals in fintech, resulting in the creation of +100 fintech projects.

Prior to this, he was Head of Finance at Bus.com, helping it from incorporation to Series A, as well as Head of Finance at District 3, helping 20 early-stage teams raise more than $15 million. He began his career as a Consultant for billion-dollar investment banking projects in space & satellite sector.

He holds an MBA from HEC, a finance degree from Ottawa University, passed II levels of the CFA and was awarded Montreal’s 2018 Ambassador of the year at the Montreal Startup Awards.

In an exclusive interview with AsiaTechDaily, Jan says:

‘Find a job you enjoy doing, and you will never have to work a day in your life.’ – Mark Twain.

I love working with talented people and helping them achieve their dreams, with the added challenge of creating and building scalable and repeatable process to do this well.

• Find your purpose
• There is no substitute for hard work
• Enjoy the ride and don’t sweat the small stuff

Read on to know more about Jan Christopher Arp and his journey.

What background and domain expertise do you have? 

Jan Christopher Arp: Financial Technology. We are backed by a 5th Generation Family Holdun, who has been managing wealth for over 100 years. Our management team of Elisabeth Laett and I have over 40 years’ experience in investing in tech businesses (partaking in 50+ opportunities) and corporate innovation (i.e. commercializing deep tech and M&A).

When did you first think about starting a fund?

Jan Christopher Arp: We saw a need to help early-stage fintech companies globally cross the chasm, from Seed to Series A. We realized that if we built a platform, it would enable us to better scout and support companies more efficiently, reducing risk during the initial investment and follow-on investment. We launched our accelerator in 2018 and since then have invested in 27 companies across 10 countries. We are now planning to have a bigger Fund to invest in more opportunities and double-down on existing diamonds.

What kind of startups/ sectors have you invested in till now?

Jan Christopher Arp: We currently invest only in early-stage fintech companies from across the globe; however, we do believe the customer journey transcends industries. Thus we must be open to explore the intersection of industries. More specifically, we have invested in digital lending, wealth management, compliance (including digital ID), capital markets, digital assets, proptech and cyber.

What types of companies do you look to invest in? And What’s your mental model for investing?

Jan Christopher Arp: Every year, we derive a thesis within differing fintech markets, backed by research which includes inputs from our 400+ Advisors, Corporate Partners and our now 27 portfolio companies. As our Advisors are financial institutions, investors or experts in Fintech, it helps us to identify which type of companies can best fit to obtain customers, investment or partnerships. Beyond a great team, companies should be solving a critical business pain-point in a large market. They should have an MVP with at least a minimal amount of traction (or other forms of engagement metrics), as we are best suited to help companies grow.

What is your typical investment range and how many startups you invest in per year in general? Additionally, can overseas headquartered startups get funding from you?

Jan Christopher Arp: We have invested $300K+ in top-performing companies, in which our initial funding during our Accelerator Program is currently up to $130K. Each year, we invest in 8-12 companies. This year, we reviewed 720+ companies from 87 countires and invested in 8 companies from 7 countries.

Yes, overseas HQ startups can get funding from us. However, we are currently best suited for companies looking to expand into the North American market, especially if they are planning on opening an office.

What would be the KPI that you usually check about the startups’ growth?

Jan Christopher Arp: It may be diverse in each industry like LTV, CAC, MoM, etc. but it will be helpful to understand more about your additional investment factors.

KPIs can vary depending on the team. Proper CAC to LTV are unlikely to be fleshed out at this stage; however, we do try to estimate if the unit economics have strong potential to be attractive in the future. For instance, we explore the current sales cycle versus future sales cycles and current pricing strategy/traction versus future models.

How do you handle this COVID-19 outbreak situation for your fund’s survival in the future?

Jan Christopher Arp: We hit the ground running. First, we engaged our existing portfolio companies and supported them with their short-term needs. Then we tweaked our thesis to reflect the new reality. Lastly, we shifted scouting and investment process to be completely digital, entailing many digital webinars, and zoom meetings, including events like our invite our Selection Day (Selection Day 2020 – Remote Dancing Activity). This included surveying our global advisor network and formulating a Covid-19 response report addressing points on capital management, customer retention, digitization of service, as well as virtually travelled across the globe. We were conducting 6 webinars across NA, Eu, Mena and Asia to talk about what business strategies companies could adopt in these challenging times.

Right after being an investor like in the early days, there must be some tough times in building up the first fund along with building up a second fund or giving back the good returns to those LPs. If there is any similar tough time like this, please tell us more about it and how you (or your team) overcome the difficult times. Additionally, Do you have advice for anyone looking to start a fund?

Jan Christopher Arp: Our first fund certainly came with its challenges. We had to strike a balance between scouting / supporting portfolio companies and building the platform that enables us to scout/support at scale, which was increasingly challenging given the volume of deals we do a year and the relatively smaller fund for the number of investments (i.e. fewer management fees). That said, we can align objectives for both ends, enabling us to maximize value for our LPs. We are now exploring raising a follow-on fund (or other avenues of early-stage support). Given our portfolio companies are continuing to progress and there’s a great opportunity to increase our stake while de-risking the investment as we’ve gotten to know the company very well.

Your unique value proposition and positioning must be clear and create excitement among potential LPs when raising a fund, as you need to stand out from the crowd of fellow fund raisers. This is especially true in today’s climate in which seed / early stage is less preferred to growth/scale funds, and that emerging manager is less preferred to a seasoned fund manager.

What mistakes do you see founders make when raising money?

Jan Christopher Arp: There are always mistakes, so the goal is to minimize them. Poorly articulated pitch (especially regarding the pitch deck), odd corporate structure (e.g. IP in a separate company, founders don’t have contracts), lack of investor pipeline (or badly targeting the right investors), not listening/adjusting to investor feedback, raising too early (similar to the point above).

What’s your advice to entrepreneurs who have a chance to meet investors like you? What are the top 3 questions that you always ask the founders?

Jan Christopher Arp: On a first meeting, I like to get a sense of:

1. What do you do (should touch on three aspects)?

• What’s the problem you are solving (and for who)?
• How does your solution work?
• Why is it so special/unique?

2. How do you know it works (e.g. traction, engagement, validation, etc.)?

3. Why now (and why you & your team)?

What’s your general thought about the term “Global” and What are the important factors (criteria) for local startups to consider for international expansion?

Jan Christopher Arp: Going global is crucial for scaling a billion-dollar venture business; however, one must consider timing and fit, which vary for each company. While most companies generally expand too late, going too early, especially in Fintech for which expansion costs can generally be higher (e.g. regulatory, technology development, etc.), can hurt the company in reaching next funding milestones. In terms of fit, not all business is businesses are suited to be a global reach, as their product may be more regionally focused, or the founders may not be willing. Other factors to be considered are different demographics, price-points and regulations which differ from region to region.

What kind of startup or tech industry will impact the world in the future like 2-3 years locally in your view?

Jan Christopher Arp: While we always invest in Fintech, our latest 2020 cohort reflects our views on the next biggest industries, which will be featured in our upcoming Fintech Show (Oct. 15th). They include: 

• Cybersecurity: The needs here are immediately given the increase in fraudulent activity under Covid-19, and only projected to increase, thus requiring new methods to mitigate cyber threats. 
• Insurtech: Premiums are facing downward pressure. Thus ways to reduce costs, or increase revenues for insurers are welcomed, especially as banks have validated ways to work with startups.
• Property Tech: Pent up supply and low mortgage rates are resulting in pressure to accelerate innovations, such as distributing loans or securitizing equity. 
• Trade Finance: The current pandemic has put substantial strain on supply chains, as significant economic and socio-political pressures create new opportunities, especially in agtech and energy financing.

What are the top-three books or movies (TV series) that changed your life and why?

Jan Christopher Arp:

• Sapiens – Shook my purpose to the core but helped me to come out stronger
• The Lean Startup – Well-timed book for me as I read it while starting my entrepreneurial journey 
• Huckleberry Finn – Childhood favourite with lessons applicable today, and I love a good adventure

How do you keep yourself motivated every day?

Jan Christopher Arp: ‘Find a job you enjoy doing, and you will never have to work a day in your life.’ – Mark Twain.

I love working with talented people and helping them achieve their dreams, with the added challenge of creating and building scalable and repeatable process to do this well.

What are the top- three life lessons that you want your (future) sons and daughters to know?

Jan Christopher Arp:

• Find your purpose
• There is no substitute for hard work
• Enjoy the ride and don’t sweat the small stuff

What would you like to be remembered for?

Jan Christopher Arp: Empowered founders globally who were dedicated to improving society for the better, in breaking the mould.

You can follow Jan Christopher Arp here.

https://twitter.com/HoltAccelerator

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