From high-profile dotcom crashes to wacky waistcoats, Dan Wagner is one of the most recognised names in the British tech space.
His career, though prolific, has been pockmarked by notable losses as well as trailblazing ventures.
Whether presiding over the collapse of Powa Technologies to taking a spate of tech startups into the public arena, he has left an indelible mark on the UK business scene.
Now Wagner is going public once again, this time with the e-commerce platform Rezolve.
Sorry, make that the AI-engineered e-commerce platform Rezolve, for no company these days can resist shoehorning those two vowels anywhere possible.
This time around, Wagner has joined the bandwagon and snubbed the London Stock Exchange for a Nasdaq listing through a reverse merger with Armada Acquisition Corp.
It’s a running theme in 2023. Homegrown tech darlings, from microchip heavyweight Arm Holdings to data specialist YouGov, are ditching London for a more lucrative listing across the Atlantic.
Proactive sat down with Mr. Wagner to get his lay of the landscape.
The UK has ‘fundamental problems’
By his own definition, Wagner is a flag-waving, jingoistic, passport-holding British national who has “always been very committed to Britain”.
But not committed enough, it seems, given his latest venture Rezolve is yet another homegrown entity seeking to go public in New York through a reverse merger.
Wagner has mixed feelings about turning his back on the Square Mile.
On the one hand, he espouses his commitment to Britain, but on the other hand, “it doesn’t matter how much commitment you have to UK plc, you have an obligation to the people who work for you and the company”.
By the sounds of it, there’s a disconnect between doing right by your country and doing right by your shareholders in 2023 Britain.
But what exactly is forcing, not just Wagners’s, but other founders’ hands, abroad?
Much of the conversation has been around valuation.
There is little doubt that in many cases, a company can net a superior valuation by listing their company in New York- it is the world’s most highly valued equities market after all.
As covered in Proactive recently, a decent company can get anywhere between a 30% and a meaty 107% premium on its valuation by opting to go public in New York over London (particularly in the tech space).
But for Wagner, all the talk around valuations misses the point.
“I think there are other fundamental problems with the UK equities markets which are not attractive, for particularly tech entrepreneurs,” Wagner stated.
Doing good by your shareholders means more than simply what price you can get for your company’s shares. For Wagner, it’s also about operating in a more welcoming environment for entrepreneurs.
It also helps that the US is much more open to entrepreneurs keeping an iron grip on the companies that they founded.
The golden share
Wagner is both the chairman and CEO of Rezolve. “That is a problem in the UK, but it’s not a problem in America,” he stated.
In fact, around 65% of tech companies in the US have a combined chairman and CEO. Furthermore, over 70% of entrepreneur-led companies in the US have voter control vested in the founder.
Rezolve will be no different- Wagner has a 75% golden share in the group’s vote control right now.
Such an autocratic ownership structure simply doesn’t fly in the UK, something Wagner believes is misguided.
Yet the dictatorial ownership structure Wagner espouses has undeniable pitfalls.
Take Mark Zuckerberg, founder of Facebook-cum-Meta.
Would Zuck have been given the go-ahead to spunk $40 billion on the metaverse – which let’s face it, is a laughing stock in its current state – if he didn’t have total, unflinching control as the majority shareholder?
Maybe not, but to Wagner you have a very simple choice if you don’t like it: Sell your shares. “That’s the choice of a shareholder. Not to tell (Zuckerberg) what to do.”
This is where the cultural differences between UK and US investors appear to be most pronounced.
The propensity for American investors to back founders, even after chalking up a substantial failure, simply isn’t there in the UK.
“I don’t think that’s the right approach, and that's why entrepreneurs will move to a place where they feel they can continue their paths,” said Wagner.
But America’s fetishisation of the ‘go-get-em’ founder has undeniably taken the country down some dark paths.
There are fewer Adam Neumann’s and Elizabeth Holmes’ nurtured in the UK, after all.
Fair enough, Wagner conceded, though he asserted that the disaster that was Holmes’ fraudulent blood-testing company Theranos had no hope of ever going public in the first place.
‘If you have had a failure, you’re a failure’
For what it’s worth, Wagner knows a thing or two about failure; his e-commerce venture Powa Technologies collapsed in 2016 amid a melange of controversies relating to Powa’s lofty valuation.
Not that he shies away from the fact.
On the contrary, Wagner sees failure as part and parcel of being a founder, even if UK investors treat it with an unfair degree of animosity.
“This idea that you have to have a failure to be a great success probably has some merit to it. I think in Europe, not just in the UK, but Europe generally, if you have had a failure, you’re a failure, until you’re not a failure, then you’re a failure again.”
Wagner believes this attitude is less prevalent in the US, where founders are treated with a certain level of reverence and where they see failure as part of the American success story.
Herein lies the problem with reviving London’s flailing capital markets.
If it were simply a question of lowering regulatory burdens or streamlining listing costs, easy steps could be taken to revitalise the City’s competitiveness.
But, if what Wagner and other founders say is true, and London has a fundamental animosity toward the 21st-century entrepreneur, then the problem may be far greater than previously imagined.