Seven out of ten startups fold in their first five years. So, why are senior financial experts in Luxembourg increasingly quitting stable jobs to join or found startups?
In 2014, Revel Wood found himself representing one of two companies in a business pitch final. At the time he was Group CEO for Fundrock Management and, he says, “disillusioned”.
“I saw the culture changing. It wasn’t about people anymore. It wasn’t about clients. It was a culture where the clients created value for the private equity shareholder, not us creating value for the clients,” he recalls.
Wood made an off-the-cuff comment to Steve Bernat, his pitch competitor, about working together to “build something new and different” and the two continued the conversation over a bottle of wine.
In October 2019, they founded One group solutions, a business focused on technology solutions for governance. Working with local fintechs Governance.com and Next Gate Tech, among others, they have their own proprietary corporate compliance, multi-tool spanning compliance to procedures, training and AML.
Starting with nothing
“The key difference to our former firm and many is that we started with nothing and lots of great knowledge, experience and a clean slate. Whereas it’s very hard to change when you have embedded old technology,” he says.
The workforce swelled from 14 senior experienced people on the first day to 45, without any help from headhunters or recruiters, says Wood. Part of the appeal, he believes, is the fact that the company does not use titles.
“They’re not encumbered by hierarchies, climbing the corporate ladder and worrying what their next title is going to be,” he says, adding that this empowers colleagues to make decisions driven by client needs. “It’s so hard to do that in traditional organisations where there’s so much regulation, global operating models, and where everything is broken down and offshored.”
Wood says that his only regret is not founding the company sooner. “I no longer have a job but a hobby I love,” he gushes.
“Everyone is upbeat and excited and doing something they’re passionate about and nobody’s complaining about politics.”
Lee Godfrey
Entrepreneurial mindset
Wood’s previous frustrations are echoed by Eduardo Gramuglia who, at the end of 2021, quit a job as country head of State Street to join Next Gate Tech as CRO. The fundtech had been offering software as a service solutions to the fund industry for three years before he joined and he admits, he was attracted by their solution and the opportunity to be “more entrepreneurial”.
He says: “We build oversight tools for the asset management and asset servicing community with at the core the solving of the data issue, which is a primary issue in order to have that next layer of oversight in hand. The approach to harmonising, standardising and enriching the data, and then the approach to the oversight tools for me is what puts Next Gate Tech in a unique position.”
A former army officer in Italy, Gramuglia says that he is used to “rolling up his sleeves” and he notes that one of the many improvements to come from the move is that he is increasingly embracing and leveraging new technology. “You need to do a lot of things yourself [in a startup] but there are a lot of tools out there that can help.”
Gramuglia says there is a strong team spirit and this he believes comes from the greater autonomy in the startup. “You sit next to the owners and have very quick access to decision makers so it’s much faster than big institutions where a lot works by consensus.”
Glass half-full
What Lee Godfrey loves most about the startup milieu is the “positivity”. “It’s the ‘glass half full’ attitude. Everyone is upbeat and excited and doing something they’re passionate about and nobody’s complaining about politics.”
Kurtosys, the asset management digital solutions firm he recently joined as CEO may not be a typical startup (it is 20 years old), but it has an “entrepreneurial vibe” and is going through a “regeneration” led by Godfrey. In his previous role, the leader was responsible for transformation at Inter Trust. But he says that the scale of the organisation and pressure from “quarterly announcements and demanding shareholders”, made it difficult to make a difference.
“You need to have deep pockets and a long timeframe to make transformation really work and most of the transformations that people are looking at are ways to reduce costs or improve efficiency, whereas what you really should be doing is looking at how you improve the customer experience,” says Godfrey.
In the short time he has been with Kurtosys, the CEO has brought considerable change, whether it is introducing employee development programmes, regular employee surveys and organising the firm’s first ever client day.
As for the entrepreneurial lifestyle, working out of the LHoFT, Godfrey says “the networking is terrific”. He says: “A few weeks ago, the Andorran finance minister came to visit. So, the access that LHoFT brings is more than just other companies. It is potential clients and new countries.”
This article was first published in the Silicon Luxembourg magazine. Read the full digital version of the magazine on our website, here. You can also choose to receive a hard copy at the office or at home. Subscribe now.
