Female Foundry Week 54: ChatGPT is eating the world. The short-lived story of a deck. Managing the temptations of pre-emptive deals. LPs get ESG-focused. FCA tightens promotion rules.
Welcome to The Week 54, 2023 Edition of the Female Foundry newsletter!
Female Foundry - where female investors and founders meet.
In The News
London-based Emperia, co-founded by Olga Dogadkina, bags a €9m Series A round led by Base10 Partners to scale its metaverse e-commerce; Madrid-based Twinco Capital, founded by Sandra Nolasco and Carmen Marín, cashes in an €11m equity and debt round led by Quona Capital for its global supply chain finance solution; Paris-based deep-tech startup Welinq, co-founded Eleni Diamanti, raises a $5m Series A round led by Quantonation to accelerate the development of quantum cryptography; Munich-based construction robotics startup Kewazo, co-founded by Ekaterina Grib, raises a $10 million Series A round led by Fifth Wall; TaskHer, a tradeswomen booking platform, co-founded by Anna Moynihan, fetches a £200k Pre-Seed round led by Bethnal Green Ventures.
Spotlight
ChatGPT is eating the world.
ChatGPT, the bot that upended artificial intelligence upon its release only two months ago and since, unleashed imagination of hundreds of millions of people around the world, is happy to answer just about any question — except how much it's worth. By contrast, the bot's creators (humans), have a very specific answer and that is: $29 billion. Microsoft invested $1 billion in OpenAI, ChatGPT’s parent company, in 2019 and announced last week it is putting forward a $10 billion investment offer, leveraging the unprecedented activity associated with ChatGPT's release, that, it believes, will change how Microsoft competes with Google, Apple and other tech giants. Since 2020, OpenAI has generated tens of millions of dollars in revenue, through selling its AI software to developers. Although some argue that the adoption of AI solutions will be sluggish, for sure, the Microsoft deal, once it happens, will represent one of the few market bright spots for a technology sector facing a myriad of challenges right now. Read full story ➯
Fundraising
The short-lived story of a deck.
2 minutes. 10 seconds per slide. This is how long I take on average to review a deck that comes through the Female Foundry Pitch Box (I review every deck). Most of the investors I know spend half of that time - I know, it is harsh. After spending hours building your storyline, selecting eye-catching colours and polishing your tagline, this is what you get. Surely, investors can do better than that! Just accept it and maximise the opportunity. Investors love strong traction and big markets, lack of those will not be compensated for with a perfectly-drawn graph. So focus on the business case (including ‘why now’) - make it simple, your business potential big and your messaging clear. Keep the intricate details of your technology away, there will be time to cover them - no one pulls up a check based on a deck. At least, not anymore. Read here ➯
Managing the temptations of pre-emptive offers.
Recently, I have observed the frantic behaviour of founders, who accept financing offers to boost their cashflow even though that does’t fit into their business strategy. Let’s talk about pre-emptive offers. You are in the full swing of developing a new feature of your product, when you receive a surprise investment proposal. It’s flattering. And since you have not started fundraising, accepting the offer will surely save you a lot of time! Cool down. First, is it just interest, or a legitimate offer? To me, without an issued term sheet, it’s only interest. Got a term sheet? Dive into the economics. Does the amount make sense? Will it get you to the next value inflection point? If not, ask for more funding. Is it the right time to give up equity? Based on the research, founders taking preemptive offers take extra dilution for less money. And bear in mind, a few months down the line, good companies will still get funded. Read here ➯
Analysis
LPs get ESG focused.
An increasing number of LPs are making net-zero pledges, and as a consequence, are paying extra attention to how GPs manage ESG risks internally and within their portfolio companies. GP-diversity and green-house emissions data are the two categories gaining the greatest interest. Green-house emissions used to be hard and expensive to measure and ESG reporting has been reserved mostly to public companies. However, in the recent months, there has been an explosion of user-friendly, and often free, tools making LPs want more accurate carbon footprint data, and GPs to include ESG in board meetings and asking ESG-probing due diligence questions. Read full story ➯
FCA tightens promotion rules for high-risk investments.
The last part of the FCA Financial Promotion Rules comes into force next Wednesday, (February 1st), and some of the micro funds, syndicates and emerging managers are concerned about how the regulation might impact them. The reasoning behind the new rules, that are meant to protect retail investors, is that given the uncertain economic climate, people are more likely to engage in high-risk and high-potential-return investment opportunities, outside of their usual risk tolerance. Consequently, it is more important than ever for fund managers and managers of syndicated deals to ensure that their investors are either high net worth or sophisticated investors, as exemptions to the application of promotions rules to this group are unchanged. If in doubt, speak with your lawyer. Read full story ➯
From the Community
European Blockchain Convention
Female Foundry is an official Community Partner of the European Blockchain Convention in Barcelona on 15-17 of February and we have 2 x €929 FREE General Entry tickets to give away to the Female Foundry Community!
To get a 25% promo code on all ticket types, respond to this newsletter. To enter the FREE ticket draw, submit your interest below. Deadline: 3 Feb. 10pm BST. T&C of EBC apply. I will announce the winners here next Saturday. Good luck!
Founder & Investor Meetups
Meetups next week: Monday, January 30, London ➯ Founder & VC Investors Networking Tuesday, January 31, London ➯ Women Who Lead Wednesday, February 1, Online ➯ Women In Venture Thursday, February 2, Paris ➯ Building Women Founders Friday, February 3, London ➯ Fempreneurs networking.
Hiring
This week hiring: Claire & Me ➯ Senior Backend Developer | Taina ➯ Marketing Executive | Olio ➯ CRM Manager. For more listings, check Female Foundry Job Board.
That’s it for this week! See you all next Saturday.
Agata
Written by Agata Leliwa Nowicka, an investor, a two-time entrepreneur, and a founder of Female Foundry based in London.
Suggestions? Drop me an email.
Check femalefoundry.co for more fundraising tools and investor content. View other Female Foundry articles.
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Thank you, Mariangela Cordella from Nauta Capital for sourcing our weekly meetups.