Yuval Tal, Founder and President of Payoneer, spoke at a Coller Ignite meetup at Tel Aviv University
“Men wanted for hazardous journey. Low wages, bitter cold, long hours of complete darkness. Safe return doubtful. Honour and recognition in event of success.”
Yuval Tal (53), Founder and President of Payoneer, chose the above quote from Ernest Shackleton’s (alleged) famous ad to open his talk at a recent Coller Ignite meetup, that took place on March 7th, 2018 at the Tel Aviv University Coller School of Management. “Becoming an entrepreneur,” Tal explained, “holds many years of pain and uncertainty. Most people will pass, but a few will only become more encouraged by the hardship. Entrepreneurship is not right for most people. However, if I weren’t an entrepreneur – I would have been very miserable.”
In a Q&A session led by Coller Ignite’s Mark Kolodkin, Tal shared his views on entrepreneurship with the audience, comprised of Israeli and International Coller MBA students. “You can’t start a company as a second job or keep your hobbies,” he said. “There’s no easy way. If you’re serious in what you do, people will trust you and invest in you.”
Tal founded Payoneer, an online money transfer and digital payment services, in 2005, with seed funding of $2 million. It wasn’t his first successful venture – in 1999, he founded E4X (BorderFree), a worldwide shopping platform. In 2007-8, Payoneer secured a second round of funding from venture capital funds. “We were lucky to secure a round of financing in July 2008, right before the 2008 financial crisis in September that year. After September, we could do all possible mistakes for two years, hire the employees we wanted – because we had no competition,” says Tal. In total, Payoneer raised so far $245 million in funding, with the last round – a strategic investment by China Broadband Capital – announced as recently as December 2017.
“The issue with investors is not the percentage of equity,” says Tal. “The key issue is the term sheet. If the term sheet says you need the investors’ approval to hire a VP, at that moment you’re no longer an entrepreneur – you’re their employee. Therefore, I would trade terms for dilution every day.” When asked whether to agree to a dilution of equity, Tal replied: “When an investor wants a higher percentage of your equity, the question is whether you need the money. If you need it – then you have no choice but to agree.”
“In the first few years, cash is everything,” Tal continued. “Most companies at that stage fail because they run out of money. Therefore, watch your cash. Don’t be tempted to spend your money and time on meetings and conferences. The giants you would meet have all the time in the world, while you have no time.” However, Tal admitted that for Payoneer, at least one of those meetings bore fruit – he met Scott Galit, the current CEO of Payoneer, in Galit’s previous position as Senior VP of Global Prepaid Products at Mastercard.
Towards the end of the meetup, Tal was asked to provide some advice for future entrepreneurs. “The challenge today,” he said, “is to find a good idea and then crystallize it, the innovation in it, which would be the substance of your startup.” Yet the most valuable piece of advice Tal wanted to provide the audience with was on how to ask for advice.
First, think who do you get advice from? Don’t compromise on the quality of your advisors.
Don’t dismiss the advice you get from the right guy.
Don’t feel forced to use the advice you’ve got.
Try to be confident with your advisor and tell him all the details, including the bad ones. It will make his advice much more valuable.
“Many companies fail because the founders don’t know the rules,” Tal concluded. “The rules of the game are out there, and the founders must learn them.”