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Last week, Endeit Capital’s portfolio company CHRONEXT strengthened its board of directors with Jacob Fonnesbech Aqraou as chairman and Hamdi Chatti as non-executive director. With these latest additions to the company’s board the leading transactional marketplace for luxury watches is ready to expand. As a shareholder in CHRONEXT, Endeit Capital played an important role in this process. Our partner Martijn Hamann shares his insights on the process of professionalizing the board of directors.
Left; Jacob Fonnesbech Aqraou (Chairman CHRONEXT). Right; Hamdi Chatti (Non-Executive Director CHRONEXT).
As a growth investor, Endeit Capital is in most cases involved in a Series B funding. When we invest in these scaleup companies, at first we form a board of directors together with the company founder(s) and other shareholders. As the company grows, independent board members are added to create a more complementary composition, and further build the company’s reputation and trust in its own industry. On the one hand, professionals with different areas of expertise ensure that the interests of the company and its stakeholders are well represented. On the other hand, independent board members with a background in the same industry are important to build lasting relationships and partnerships in a particular industry.
At Endeit, we believe it’s important that the founder and CEO takes the lead in finding an industry expert with the right experience. One of the main tasks of a good CEO is to build a diverse, qualitative and relevant network. This is very important for the long-term perspective of the company.
With Hamdi Chatti, CHRONEXT founder and CEO Philipp Mann found someone who comes from the heart of the luxury industry. With over 20 years of experience in leading roles at Montblanc, LVMH & Louis Vuitton, Cartier, Piaget and as CEO of Harry Winston Timepieces, Chatti is a real industry expert. Up until the end of last year, Chatti was chairman of Damas Jewellery, one of the Middle East’s largest jewellers, and currently also acts as chairman of Gübelin. Chatti will fulfil the role of non-executive director in the CHRONEXT board.
When there are issues with governance within the board of directors, the appointment of a chairperson can help professionalize the board further. A good chairperson is expected to be independent and able to weigh all the interests of the individual board members. He or she is someone who can read between the lines, picks up on tension and is able to manage it without causing waves. But also someone who can monitor the final responsibility and break a deadlock within the board when necessary.
With Jacob Fonnesbech Aqraou, CHRONEXT gets an independent chairman with extensive experience in fast-growing technology companies and marketplaces. A good chairperson often has relevant experience, substantive knowledge and a high level of social intelligence.
By working as a serial investor and advisor in European technology businesses for the past five years, after 13 years at eBay as senior vice president for eBay marketplaces in EMEA, Jacob Fonnesbech Aqraou fits this profile to a tee. Fonnesbech Aqraou also sits on the boards of Teamviewer, Telenor, Wallapop, Phase One and Capture One.
Finding suitable board members is never easy job. As an investor, we believe it’s important to add a chairperson to the board of directors early on. By appointing a chairperson, we give up part of our voting rights, but we are confident that he or she will ultimately benefit the professionalization of the board, and add value for the stakeholders.
For us at Endeit Capital, introducing a chairperson to the board of a portfolio company is part of the sustainable ESG (Environmental, Social and Governance) criteria for investing. We believe a chairperson is so important that we mention the following in our term sheet when we invest: ‘we anticipate that the board will appoint an independent chairperson in due time’.
Endeit Capital is shareholder of CHRONEXT since January 2018, and spearheaded an investment round that raised US$34 million. Only recently CHRONEXT announced record sales in 2020, surpassing the US$120m mark. More about the recent announcement of the two new board members can be found on WatchPro.
Endeit refers to the following statement in connection with the sustainable finance disclosure regulation (SFDR), available here.
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