FINTECH CEO: If you're an entrepreneur, why would you set up in the UK now?
"A lot of people when they come to London feel that they give up a lot of quality of life for business opportunities, and now that's uncertain," Paredes told Business Insider in an interview.
"I'm not saying that London can't continue being the best capital for fintech in Europe but we need some clear leadership and direction. The government knows how to do it, they just have to be more vocal with their support for the scene."
Paredes says she knows of funding rounds for London-based companies that have been paused or stopped and cautioned that startups like hers could be put off setting up in London in the future, saying: "Technology is very mobile, you can start a company or an app anywhere."
Suade was set up in 2014, making software for banks to help them adapt their balance sheets to changes in financial regulation. The startup featured on this year's "FinTech 50" list of companies to watch and has been touted by the Bank of England as a solution to some of the big banks' woes with regulation.
Paredes grew up in Paris and started her investment banking career at Merrill Lynch in 2007, moving to Barclays two years later to work in the lender's fixed income, commodities, and currencies division.
Britain will trigger the process to leave the European Union next year and the country seems destined for a so-called Hard Brexit, handing the UK control over immigration in return for foregoing membership of the single market.
Amber Rudd, the home secretary, said this week that UK businesses hire too many immigrants and that government would make it harder for companies to give jobs to immigrants before recruiting British people. This could hurt many fintech companies, which typically have hugely international teams. Half of Suade's team is from mainland Europe, for example.
Paredes spoke to Business Insider about what it's like to be an entrepreneur, funding models for start-ups, and the Brexit effect. Here's the full interview, edited for clarity and brevity:
Ben Moshinsky: What have you learned as an entrepreneur? How has it changed your working life?
Diana Paredes: I think my working life is much better now. A big test of that is that I don't even count the hours. I'm not even sure if I work more hours than I did before but it feels completely different because you love what you're doing. I remember reading that in services industries 75% of the time people are unhappy in their jobs, and only 14% of the time people are actually happy in them.
I genuinely think that everyone should try entrepreneurship, even just as an episode in their lives. You shouldn't have any regrets. I guess the fear of failure paralyses people but the reality is you're better off trying it out, and realizing it's not for you, than having that regret. If you look back 50 years, 70 years, most people were entrepreneurs, everyone had a trade.
It's a new era of services we're in now where people are in these big companies. There's nothing wrong with that if it's set up in a way that preserves their individuality and identity. I do think that human beings innately want to feel like they matter, that their contribution to society matters, and sometimes in some of the big companies this can get lost in translation or the cogs of the machine. Entrepreneurship has gone well for me so, obviously, I'm positive about it. Everyone wants to try it out, and there's so much regret if you never do.
Entrepreneurship has gone well for me so, obviously, I'm positive about it. Everyone wants to try it out, and there's so much regret if you never do.
BM: So entrepreneurship makes you feel more alive?
DP: Either you'll thrive and it will be the best job you've ever had or you'll realise that the uncertainty isn't really for you.
I believe in being honest with yourself and living without regrets. A lot of my friends in the finance industry really want to try it out. And every time we meet up and they haven't done it yet, they're a bit sad.
One of the things I like the most is that it makes me a better person. It's very much about appreciating the present and what you have every day. You can lose yourself in the uncertainty or you can enjoy the immediacy of it and enjoy being the captain of your own ship. I'm way more relaxed as an entrepreneur than I was in banking, because it feels like things are in my control and what I make of every day is up to me.
You learn how to deal with your fears and insecurities and positively change. By being open and receptive to how reality is, you're in the flow, riding the wave rather than avoiding it. Like surfing, you're on the Mavericks, it's never a mellow wave, but you are fully alive. You might wipe out but at least you will have lived and enjoyed the ride.
BM: Do other entrepreneurs feel the same way?
DP: There is a secret language. When you meet other entrepreneurs, it's so electric because you're all trying to change the world in some way. It might be completely crazy, it might never work, but it's that feeling of hustling every day that is exciting! We're creating something out of nothing every day. The best things in life are made in that drive, for creating.
DP: Quickly, but one of the things that's really important to us is to keep our existing customers happy. The journey is not just about acquiring new customers, but growing in a way that means you can take care of the customers you already have.
Sometimes I think this is underrated. The customers that signed up early on, I feel very loyal to them. The first contracts we signed were a huge deal, you become very grateful.
We intend to be around for a while so that means designing software that's future proof. You want to design it in a way that's flexible to both changes you anticipate and the ones you do not. It needs to be able to change at the same pace as the politics and regulation change. We already started to expand in Europe and are looking at the US now.
BM: Whereabouts in Europe are you focusing?
DP: Some jurisdictions are more business-friendly. The Netherlands is great. There are all sorts of things we're finding out when it comes to tax treaties and starting a business. The Netherlands are kind of the best for this sort of thing. We're also looking at Germany, the Scandinavian countries, Spain and France - wherever there's demand.
BM: What sort of funding models are you looking at? What about venture capital?
DP: We haven't really needed to take investment. We did a very small round of fundraising with brilliant people at the very beginning and since then we've been able to grow organically from the work we've been doing. I've had really good advice from some of the best CEOs in London and there's a lot to be said from boot-strapping and building something that's sustainable.
When you look at the reality of taking investor money, unless it's really clear there's a positive externality from it, there's a chance it could even be negative. It could actually lower the value of your business, that's a real risk and it's not something that's talked about a lot.
It doesn't mean you never take venture capital, it just means you do it at a moment that makes the most sense. And you, as the entrepreneur, are the only person who knows exactly when that is. It's important not to be peer-pressured in to doing a round for the sake of just doing a round.
BM: How has Brexit affected your plans?
DP: We're in a fortunate position. Because of the nature of our business, regulatory uncertainty is actually good for us. You need flexibility in tech more than ever now. Our clients tell us they'll need us even more. But I think that as a company in London, in the UK, that services financial institutions, things are going to change.
There's a lot to see still but as we look to do business in Europe, we're looking to open offices in Europe too. That gives certainty to our customers, having a presence in Europe. I would not want to be a brand new Fintech company opening in London right now.
If the UK government wants to continue having this presence in the fintech scene, and tech in general, it's going to have to make some decisions quick. And not mildly, to show decisiveness, and that they're taking the bull by the horns. In London, it's tough now. I have friends who have had funding paused or stopped. That's another reason why building a sustainable business is so advisable, you are less affected by externalities.
BM: How did the industry take it as a whole?
DP: I think I speak for a lot of entrepreneurs in London by saying that Brexit wasn't well received. It was a big shock. The government has to be as vocal and as fast as possible to say clear things, such as the situation with visas and free movement. Half my staff is European. How are you supposed to attract talent from abroad?
From our perspective, as a business it's been great as I was saying because of the nature of our business, but it's not necessarily the best as a company based in the UK. We have to look at opening an office in Europe to demonstrate we're a European company. The UK has added a whole new dimension of uncertainty and cost for entrepreneurs. If you're an entrepreneur, why would you set up in the UK now? We had good support from the last government, they were around a lot, and now we're hoping to see the same thing from the current government.
We have to look at opening an office in Europe to demonstrate we're a European company. The UK has added a whole new dimension of uncertainty and cost for entrepreneurs. If you're an entrepreneur, why would you set up in the UK now? We had good support from the last government, they were around a lot, and now we're hoping to see the same thing from the current government.
We had good support from the last government, they were around a lot, and now we're hoping to see the same thing from the current government.
We're not moving but I do know of other companies that are thinking of just leaving. If you have no real reason to be here - London is expensive for talent and housing - then why wouldn't you just do what you do from Italy or Spain or the Netherlands. Technology is very mobile, you can start a company or an app anywhere.
A lot of people when they come to London feel that they give up a lot of quality of life for business opportunities, and now that's uncertain. I'm not saying that London can't continue being the best capital for fintech in Europe but we need some clear leadership and direction. The government knows how to do it, they just have to be more vocal with their support for the scene. As an entrepreneur, I am by nature positive so I still believe in London and the UK!