We talked to Daniel Faloppa on how Equidam guides towards understanding how valuable a company is, and this is what he had to say.
First of all, how are you and your family doing in these COVID-19 times?
Daniel Faloppa: Thank you for asking; luckily, everything and everybody is OK. We’ve got a few scares, but it stopped at that, strange and testing times we are living through.
Tell us about you, your career, how you founded Equidam?
Daniel Faloppa: I started Equidam in 2012, during my Master in Finance & Investments at the Rotterdam School of Management. I’ve always been interested in finance and coding, and during the master’s, I developed a keen interest in private companies. The main drive has always been the fact that private companies and smaller companies, in general, are not utilizing finance to the maximum. This is natural, as they are specialized in their field, not in finance. However, by understanding and using finance better, they can perform better. Simultaneously, the financial infrastructure allows capital to be distributed where it can be used best, which allows people who don’t have the financial resources, borrow or raise them, and drive progress for everybody. All this brought us to start a blog discussing entrepreneurs’ financial concepts, where the valuation question was always central. We iterated from there in what is today Equidam!
How does Equidam innovate?
Daniel Faloppa: Broadly speaking, it comes down to our first principle thinking. The reason why something is the way it is, is often that it was created when that was the best possible. Every success then gets somewhat entrenched and has little incentives for radical innovation; think about Nokia, for example.
Our main first principle view is why can’t valuation be automated? To this day, the vast majority of evaluations are conducted by specialized advisors and evaluators. However, with the breadth of data available on the internet, with the much improved financial and business understanding of entrepreneurs and, more broadly, the general public, and with an enormous impact of machine learning and big data, there is a large percentage of the use cases that can be served directly and through technology, drastically slashing both time and cost for this type of service.
How the coronavirus pandemic affects your business, and how are you coping?
Daniel Faloppa: Overall, we are, luckily, positioned very well. Startups and funding are naturally not correlated with the general economy, and we have a global presence that covers all industries. Even taking that into account, though, the pandemic’s severity is still affecting our growth, even though marginally. You can easily see the different waves in our customer analytics. Overall, we are fortunate, and we are nowhere near the impact felt by sectors such as horeca, travel, or events.
On a more positive note, we see more openness in companies worldwide towards new solutions. I think so much has changed during this year that considering a new technology, changing established processes, or radically changing business models do not seem like huge deals anymore.
Did you have to make difficult choices, and what are the lessons learned?
Daniel Faloppa: I think nobody was spared from difficult choices this year. We had to adapt the organization to remote working very quickly. Being a digital startup grants you some advantages there, but at the same time, things need to be iterated at crazy fast speeds, and those discussions had to be moved to video calls. I think the internal reorganization was luckily the most challenging change for us. The main lesson learned is that communication technology has gotten to the point where working far apart is competitive with working in the same office. They are not the same, but each has comparable advantages and disadvantages.
How do you deal with stress and anxiety?
Daniel Faloppa: I am an incorrigible optimist, which does not mean that I don’t experience stress and anxiety, but that my coping strategies are connected to this center of gravity. When faced with difficulties, I need to put them in perspective, look at a longer time horizon, and see how the target has changed. If I don’t like it anymore, then change the target to something more exciting and motivating. Many stress comes from viewing external events as burdens and evil things that prevent us from reaching our goal (happiness, growth, anything). It’s much more productive and less stressful to see them just as the terrain you are playing. If you want to reach a particular village, you don’t chart a straight line and then get stressed and maybe angry at the mountain that sits between; you take the terrain into account. By doing that, you not only stress less, but you find much larger opportunities, and maybe your itinerary changes completely, but to something much better.
Who are your competitors? And how do you plan to stay in the game?
Daniel Faloppa: Strictly, our competitors are segmented into three levels: other online valuation platforms, traditional advisors, and free online templates. Overall, we stay ahead by staying true to our core and our first principle of thinking. However, we are operating in such a nascent industry that we believe it pointless to compete in the loose-loose sense of the word. We are trying to work together with all these other solutions to raise awareness of entrepreneurial finance and valuation advantages. I think this will benefit us and the industry much more in the long term.
Your final thoughts?
Daniel Faloppa: What to say? It’s been an incredible year, and the next one seems it’s going to bring along its own set of challenges and changes. As always, in this kind of period, it’s tough to see the light and connect the dots on how this is impacting us as individuals and, given the magnitude of the pandemic, as people. However, as humans, we always keep learning and grow from challenges; I’m curious to see what learnings this will bring and how we’ll be all different once it’s over!
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