Female Foundry Week 129: Fields of Vision. Sticky Business. Found and Lost. On founder equity splits.
Welcome to The Week 129, 2024 Edition of the Female Foundry newsletter!
Female Foundry - the Future of Venture is Here.
In the news
Barcelona-based FABBRIC, co-founded by Alba Rocafort Marco, picks up a €1.25m Seed round led by Hans(wo)men Group and Helena Torras for its fashion-creation platform; Rotterdam-based Paebbl, co-founded by Marta Sjögren, lands a €22.8m Series A round led by Capnamic to boost CO2 storage in buildings; Helsinki-based Munchfam, co-founded by Wei Zhou, raises a €600k Seed round co-led by Pitchdrive and Genesis to reduce the restaurant failure rate; London-based Zepz, co-founded by Catherine Wines, secures a $292m Series F round led by Accel to expand cross-border payments platform; London-based AMAKA Studio, founded by Adaora Oramah, fetches a $2m Seed round led by Equitane to empower Black and African creators globally; London-based Vested Impact, founded by Kimberley Abbott, raises a £1.1m Seed round led by Impact Shakers Venture to expand its platform for rapid, data-driven ESG and impact assessments.
Spotlight
Fields of Vision.
Geoffrey Hinton, often dubbed one of the ‘godfathers of AI’, alongside renowned physicist John Hopfield, received the Nobel Prize in Physics on Tuesday this week for their groundbreaking machine-learning discoveries from the early 1980s that paved the way for the AI boom. Their pioneering research utilised concepts from physics to develop artificial neural networks, laying the foundation for the AI revolution we see today.
Just a day later, AI made headlines again as Google DeepMind CEO Demis Hassabis, DeepMind director John Jumper, and University of Washington professor David Baker were awarded the Nobel Prize in Chemistry for 'cracking the code' for proteins' intricate structures, unlocking our understanding of the molecular biology that underpins health and disease.
The winners of each prize receive SEK 11 million (about £820k), a gold medal, and a diploma. But it’s the prestigious recognition that really matters. Each year, the Nobel Prizes are awarded in just six categories and there have been only 626 awards given since they were founded by Alfred Nobel on the 27th of November 1895.
This year’s awards highlight the interdisciplinary nature of AI and its potential impact on every aspect of our lives but while many researchers celebrated this year’s chemistry and physics prizes, others were disappointed by the focus on computational methods, stirring debate over how breakthroughs in computer science should be recognised.
At a press conference, the laureate Demis Hassabis said, ‘It's far too premature to claim that AI is involved in all prizes. The human ingenuity comes in first: asking the question, developing the hypothesis. AI systems can't do any of that at this stage. The committee’s decision to award two prizes linked to AI this year is an interesting statement’.
Fundraising
Sticky Business.
What a week! The event season is in full swing, and it was fantastic to see many of you at the Google Connect event in London on Thursday. Thanks for all the ideas and laughs—never underestimate the power of a good laugh while navigating the ups and downs of building a business!
On Friday, I spoke with a founder who, like many B2B entrepreneurs searching for a product-market fit, a few months ago launched a pilot with a corporate partner (a major retail bank). The pilot turned out to be longer and much more absorbing than expected and what’s worse, a few months down the line, she found herself no closer to converting a partner into a paying customer (despite delivering on all the objectives), and is now at the end of her runway (!).
While pilots with corporates can be a great way to refine your product, build strategic alliances, and access valuable market data, I often see founders who get overexcited by the possibility of a partnership, agreeing to all conditions without including any payment terms. Remember, if a major player is interested enough to involve their staff, invest time and internal resources into your project, they’re already vested in your idea, make sure you capitalise on that appetite!
Sure, the contract value will be heavily discounted because of the project’s unproven value. But three months down the line, even a small revenue stream from that pilot will boost your cash flow, serve as solid evidence of interest to your potential investors and even more importantly, open up the door to commercial conversations, making it easier to negotiate a full-fledged contract!
Be beware though: if a major corporation doesn’t want to pay for your pilot, treat that as a red flag. Unless they (contractually) can offer you a unique market data or technology access, don’t waste your time, they might just be ‘shopping’ for ideas.
Analysis
Found and Lost.
It looks like the closed IPO window that has made VCs scramble for liquidity is driving a sharp increase in exits where VCs recover less than their initial investments—the highest levels since the 2007-09 financial crisis, according to the newly-released report. Since 2022, 70% of VC-backed exits were valued at less than the capital investors put in. That figure was 58% for the period between 2009 and 2014.
The situation is affecting VCs across all stages: as much as 50% of early-stage startup investments have returned nothing or less than the amount invested and the scenario does not improve for growth-stage investments, with over 60% of late-stage company exits since 2022 resulting in a loss.
On founder equity splits.
The topic of founder equity splits is somewhat controversial. Some say that in order to ‘align incentives’ among the founding team, the split should be 50/50, while others argue that the split should reflect the input of each founder.
It might surprise you, but newly released data analysing 4,448 US-based startups founded between 2022 and 2024 found that among two-founder teams, 59% have not split exactly 50/50, and only about 25% of three-founder teams split the equity pie evenly at 33/33/33. What the data shows is that splits like 60/40, 58/42, and other variations are also common options.
Community
Stay tuned.
Stay tuned for next week’s announcement as we double down on innovation and data.
Hiring
This week hiring:
Findable ➯ Account Executive | Datamaran ➯ Client Advisor | Carmoola ➯ Social-First Marketing Designer | Deverium ➯ Senior Product Designer.
Founder & Investor Meetups
Pi Labs has just announced the launch of our 13th Growth Programme for early-stage companies redefining the built world. If your company is solving key sector challenges, demonstrating impressive early growth, and is ready to scale ➯ apply here.
Monday, October 14, Barcelona ➯ Women Investors’ Lunch | Tuesday, October 15, London ➯ Flight 2023 - Crane's GTM Summit, ➯ Ocean Tech Founders & Investors | Thursday, October 17, Paris ➯ 2024 MIT Paris Symposium | Friday, October 18, London ➯ Fintech Hackathon.
Enjoy the rest of the weekend! See you next Sunday.
Agata
Written by Agata Leliwa Nowicka, an investor, a startup adviser, a two-time entrepreneur, and a founder of Female Foundry based in London.
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♡
Thank you Alice and Anj for the research.
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