Risk to Reward: A €105 Million Seed Investment Journey with IE Alumnus Investor-Founder

In a recent Venture Network event hosted by IE Entrepreneurship & Innovation Center, Paul Murphy, IE MBA 2008 graduate and Partner at Lightspeed Venture Partners, took center stage to share valuable insights from his journey in venture capital and startups with our community.

Murphy’s story started with the development of technical skills on one of the first MAC computers that his mother acquired for her furniture startup. Beyond the technical proficiency, the main lesson he learned from his mother’s initiative was the art of accepting failure, an inevitable companion for every founder at some point in their startup journey. This crucial takeaway from his formative years became a guiding force in Murphy's entrepreneurial path.

“When I was in India, there was a real perception that failure is unacceptable, same was in many parts of Europe as well. Thankfully, that perception has changed,” said Murphy.

Understanding the concept of failure helped Murphy embrace his entrepreneurial mindset while founding numerous companies. Still, with a desire to deepen his understanding of business dynamics, Murphy joined Microsoft as a Tools Developer and ascended to the position of Chief of Staff at the Microsoft President’s Office. This experience exposed him to sales, marketing, HR, and other crucial business parts that every founder must know.

“There are a lot of flaws in the big corporate world, but there are also a lot of best practices that I didn’t really appreciate it until I went back to the startup space,” said Murphy.

Six years in a corporate company paved the way for him to reach new heights in the business field, eventually leading him into the investment sector. Categorizing investors into two types - those with a founder background and those with a finance and consulting background - Murphy emphasized the advantage of his entrepreneurial past in cultivating a keen product sense and having a reasonable judgement.

“It is nice to see as a founder the problems that my founders are also going through. I have a bit more empathy in that,” said Murphy.

During the Q&A session, more than 400 online and offline attendees dived into Murphy's insights on navigating the dual roles of founder and investor. Drawing from years of experience and the inevitable highs and lows, Murphy empathetically shared his understanding of the founder’s position when seeking investment. He acknowledged the challenges of identifying an exceptional startup among many considered by Lightspeed - drawing from his history of successful European investments, most notably a €105 million seed funding for AI company, Mistral - but encouraged all attendees to embrace the risk.

“The core lesson is that there is no other time to take risks. Risk is the only thing that rewards you in business. Though, you have to be mindful and careful with the number of risks that you ask the investor to get comfortable with,” shared Murphy.

The Venture Network event is a weekly initiative of IE Entrepreneurship & Innovation Center that includes pitch slams, speaker series, gathering investors, entrepreneurs, and startups to network and connect.

Discover more about the center and secure your spot for the upcoming event by clicking here.