Female Foundry Week 47: What has happened to Due Diligence? Driving sales with referral engine. Culture Canvas. Unwanted legacy of Elisabeth Holmes. Do syndicates make valuations accurate?
Welcome to The Week 47, 2022 Edition of the Female Foundry newsletter!
Female Foundry - where female investors and founders meet.
In The News
London-based Here We Flo co-founded by Tara Chandra and Susan Allen, picks up €1.9m in an angel round supported by Angel Investment Network, to bring a cultural shift to period care and sexual health; Also London-based Surfboard, founded by Natasha Ratanshi-Stein, raises €4.8m Seed round led by Speedinvest alongside Fly Ventures and Seedcamp to make team planning more collaborative and human-centric; Cambridge-based 52 North Health co-founded by Umaima Ahmad receives £1.2m grant from Innovate UK to bring more effective care to chemotherapy patients.
London-based Venture Capital firm, Pact, led by an all-female GP team, launches its first £30m fund to back early-stage European startups focused on inclusion, well-being, and climate tech.
Spotlight
What has happened to the VC Due Diligence process?
The recent abrupt collapse of FTX has exposed the questionable processes and judgment of some of the most prolific VC investors. Last week, Sequoia, one of the biggest backers of FTX, issued an official apology to its LPs for the $150 million it lost, promising significant improvement to its due diligence process. Temasek, another key backer, issued a statement last Thursday, saying it would write off its entire $275 million investment in FTX. Even though the FTX saga is far from over, increasingly, the fingers are being pointed not at the FTX executive team but at its investors. Here is an interesting analysis of the FTX DD process. This week, Sequoia stated that the firm in the future will have financial statements even of early-stage startups audited by one of the Big Four accounting firms. What sounds like an overreach, certainly sends an important message - FTX, Theranos, and even Slush pitch prize controversies might have been avoided and reputational damage saved if due diligence would have been done more purposefully. Read full story ➯
Fundraising
Increasing sales through a referral engine.
Referrals are one of the most efficient and powerful acquisition channels in a startup marketer’s arsenal. Sure, the fiercest brand advocates of your product most likely already talk about it regularly, however, what may sound like a sign of a good product-market fit, will most likely not deliver the kind of exponential growth you and your investors are looking for. How should you go about designing and building a referral engine that will enable you to tap into customer markets beyond family, acquaintances, colleagues, and friends? Read here ➯ I am also sharing a few tips on how to measure referral rate.
Building successful teams - Culture Canvas.
Every startup has a culture. Do you all turn up on Mondays late? Yep, that’s a very simple manifestation of your startup’s culture. Coherent and unique in its own right, company culture can be a driving force behind your startup’s success. On the contrary, a weak, uncared-for culture can break teams, keep customers away, and set you up for gradual failure. So where do you start to purposefully build company culture? Read here ➯ I am also including a talk with the very creator of Culture Canvas, Gustavo Razzetti who spent the last 20 years helping create successful teams. Here are a few practical examples of applications of Culture Canvas to get you started. Also, in the latest episode of the Three Point Zero podcast (see below), Steph Bowker reflects on how Culture Canvas helped her and her co-founders at Ourspace build the company culture.
Analysis
Unwanted legacy of Elisabeth Holmes.
Theranos’ founder Elizabeth Holmes has been sentenced to over 11 years in prison for defrauding investors - closing last weekend the key chapter to one of the biggest scandals in Silicon Valley’s history. Even though the verdict is harsh, the case, no doubt, will cast a long shadow on the startup female founder community. Charming, intelligent, a computer whizz turned Stanford dropout, and a woman - Elisabeth Holmes gained unprecedented backing and quickly become an inspiration for many women entrepreneurs. Now, female entrepreneurs, especially those in the biotechnology sector, do not want to be compared with her. Read full story ➯
Do syndicates make startup valuations more accurate?
The latest research from Purdue University reveals that having multiple VC investors around the table significantly increases transparency and therefore lowers the chances for company valuations to be manipulated. Even though the finding might not be surprising, it highlights an important issue in light of the recently slashed valuations of big tech startups. Syndicates, once a rare breed, have become very popular in the past 10 years, being a preferred route for startup founders these days. Syndicates provide founders with a more diversified value from investors and better follow-on fundraising options and, existing investors, with more capital deployment options and, at the very least, more transparency. Read full story ➯
From the Community
Three Point Zero Podcast: Building for collaborative team design with Steph Bowker, the co-founder of Ourspace.
This week, I spoke with Steph Bowker from Ourspace, who together with her co-founders Megan Murphy and Mark Allen, recently raised a €2.5m Pre-Seed round from Connect Ventures and Seedcamp (see Week 43).
In the episode, we talk about building products for collaborative team design, raising capital with VCs, and finding efficient ways to develop MVPs and scout for the best talent.
Hiring
Check Female Foundry Job Board, and join female-founded startups.
Rosaly ➯ Head of Sales (Paris) | Elvie ➯ Sales Analyst | Baobab ➯ Digital Marketing Manager (Berlin)
That’s it for this week. Have a great rest of the weekend!
Agata
Written by Agata Nowicka, a founder of Female Foundry, a serial entrepreneur, and an investor based in London.
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