Q&A with Joseph Pizzolato, early-stage & growth investor from Felix Capital

"There are some interesting developments in the fractionalisation of ownership and the democratization of investing."

“I learned the value of optimism and believing in the potential of FinTech startups. There are some interesting developments in the fractionalisation of ownership and the democratization of investing.”

Here is my chat with Joseph Pizzolato, an early-stage & growth investor from Felix Capital. His primary areas of interest include Fintech, crypto/web3, and eCommerce enabling software, with a particular emphasis on verticalised financial solutions and alternative credit forms within FinTech. He invests from seed through to late stages and welcomes any founders to reach out to him on LinkedIn or Twitter.

👉Also, subscribe to his new newsletter The Red Pill where he writes thought-pieces about fintech and Web3. I highly recommend it!

Please tell us a bit about yourself, both at work and in your spare time.

I'm based in London, come from an Italian family, and grew up in Australia (with a sister in New York). From about the age of 5, I thought I'd be an architect, but only later in life did I realize I couldn't draw! I studied both engineering and finance at university, and after a brief stint working as an engineer, I moved into the investing world, initially at Rothschild, then Vitruvian Partners, and now Felix Capital.

In these 10+ years, I've been fortunate to be involved with many great companies, from Farfetch to Wise (Formerly Transferwise), Ledger to Sorare (amongst others), and I consider myself lucky to work with passionate entrepreneurs and help them in some small way on their journey. In my free time, I'm usually at the gym, cooking for friends, or reading. 

What are your focus areas, overall and within the FinTech space? 

My main focus areas are Fintech, crypto/web3, and eCommerce enabling software, investing across stages from seed to late-stage growth rounds

Within fintech, I've been spending time on verticalised financial solutions and alternative credit forms, recently investing in Juni and re:cap, for example. For Web3, I'm most interested in projects that help bridge the web2 and web3 worlds and enable normal consumers to enter the crypto ecosystem. I believe we are still very early in the days of web3, with less than 200 million active users, close to where the internet was in 1998. Imagine the potential for this industry when we have more than a billion users onboarded!

Do you invest as an angel aside from your VC investments? 

Very rarely, but I'd like to do more. 

Most of my spare capital tends to go into crypto!

What’s one question you ask yourself before investing in a company? 

For early-stage investments, 'Can this be a multi-billion dollar business?' For better or worse, you need to believe in big outcomes in order to invest in a company.

Due to the low average survival rate of companies, the majority of VC returns are generated by a handful of very large outcomes. Later stage investing is more concentrated around incremental gains – e.g. can they grow market share, can they increase prices, can they build out the product suite, etc. 

Since you started investing in FinTech as a VC or angel, what has been your biggest mistake and lesson learned? 

Saying no to Revolut in 2018 at a ~$1 billion valuation. This taught me the importance of optimism and believing in the upside. As investors and humans, we are naturally risk-averse and it is easy to find 100 different reasons not to like something. A good investor can filter that out, find one or two key reasons to really believe it, and then act with conviction. 

Which are the trends to watch out for in the next 6–18 months? 

Everything Web3 related. We are still incredibly early in a huge market shift, albeit I think growth will be non-linear and there will be ups as well as downs.

Within traditional finance, I think there are interesting things going on in the fractionalisation of ownership and the democratization of investing, giving every day consumers the ability to access private asset classes. 

We saw Robinhood’s fractionalisation of shares open up equities to a whole range of people who were previously priced out, resulting in growth in the whole underlying market. I believe we will see this in other asset classes, from property to collectibles and even private market equities. Hopefully, we will see a future where access to investing becomes more democratised.

Do you have a tip, trick, or golden nugget for startups to attract the attention of an investor? 

Clarity and articulation are key. Sadly, most investors have short attention spans, and you need to be able to attract and hold their attention for as long as possible.

Startups and founders need to be able to quickly articulate why what they are building is important, how it will have a big outcome, and why they are the team to do it. It might sound inane, but a nice-looking pitch deck and company website go a long way too. 

What’s on your bookshelf or reading list? 

I just finished "Shoe Dog" by Phil Knight and thought it was brilliant. I've moved on to "Surrounded by Idiots" by Thomas Erikson and am planning to read "Skin in the Game" by Nassim Taleb afterward.

I've set myself the paltry goal of reading at least 1 book per month in 2022 and writing at least 1 thought piece! So far I’m on track, but who knows where I’ll end the year

What’s one interesting thing most people won’t know about you? 

I am travel-obsessed and have been to 50+ countries and counting. I'd love to spend time living in Japan at some point in my life.