Female Foundry Week 62: VCs retreat to basics. Timing is everything. How to sell your competition. Skin in an emerging manager’s game. Building companies with social impact.
Welcome to The Week 62, 2023 Edition of the Female Foundry newsletter!
Female Foundry - where investors and female founders meet.
In The News
London-based Oja, founded by Mariam Jimoh, picks an extension round led by LocalGlobe for its ethnic online supermarket; Paris-based ZEWAY, co-founded by Stephanie Gosset, picks a €26.8m Series B round led by Demeter, InnovAllianz to accelerate urban electric mobility; Dutch-based EV Biotech, co-founded by Agnieszka Wegrzyn and Linda Dijkshoorn bags a €4.5m Seed round led by Future Food Fund to improve the production of its fermented products; Paris-based Sifflet, co-founded by Salma Bakouk, raises a €12m Series A round, led by EQT Ventures to make data sets more reliable; London-based Piclo, co-founded by Alice Tyler, fetches a £8.3m Series B round from Future Energy Ventures and Clean Growth Fund to accelerate decarbonisation internationally.
Emblem, co-founded by Bénédicte de Raphélis Soissan, launches a €50m seed fund to back 30 startups in France, Denmark and Sweden across AI, fintech, future of work, software as a service and digital health with €500k to €3m tickets.
Spotlight
VCs retreat to basics.
Techstars Sweden announced on Tuesday that it would stop its accelerator program mid-term, quoting high costs. Y Combinator, declared last week it would pivot away from late-stage investing. Three years ago, the COVID pandemic caused a boom in venture fundraising, with firms raising $154.1bn in 2021 and $162.6bn in 2022, a jump from $60.5bn in 2018. Such a great boost in dry powder led to startups raising more funds, more quickly, and more frequently, driving high valuations. Consequently, VC funds began investing earlier to gain more ownership and lower their average per-share cost, or later, like Y-Combinator, to follow on the winners. But this is now changing. High interest rates, tanking valuations, and a slow fundraising market have pushed VCs to get back to their core and invest in what they know best. And that’s how it is likely going to stay for some time. Read full story ➯
Fundraising
Timing is everything.
With fast-changing capital markets and competitive fundraising conditions, today, it is more important than ever for you to understand the market forces driving your business proposition, to time your fundraising process well, and to convince investors why now is the best time to back you. To me, ‘Why now’ is an anchor slide in any pitch deck. See, investing in startups is a timing game: great investment opportunities come in ebbs and flows. Buy low, sell high. Maximising the value for shareholders means finding promising deals before everyone else, extracting the value of an emerging trend, and exiting at just the right time. Investors that do it well have a sense of pulse on the frontiers of the economy. So leverage that; above everything else, make sure that you understand what macroeconomic forces will make or break your business and cross-check your assumptions regularly. Why does the market need your product now and in the next 5 years? What external forces are currently helping your solution become more valuable? How long will they last? Why three years from now will it be too late? Read full story ➯
How to sell your competition.
I regularly come across founders proudly showing me a 2 by 2 matrix demonstrating their competitive position - with their lonely logo standing in an empty top right-hand side box. I've seen it a hundred times. Don’t make this mistake. Suggesting that you have no competition will likely work against you: it will send a signal that there might be no market for your solution - being too early is the same as being wrong; or that your proposition is untested, which means more risk to the investment. It will also make investors wonder whether you are not thinking hard enough, or are being coy and avoiding the question. Either one of those reasons is going to hurt your pitch. Instead of trying to make your company be seen as standing in its own league, use competitive positioning as an opportunity to demonstrate that you understand the players within your market, to position your product (premium vs. economical, tactical vs. strategic), and to showcase the features you believe your customers care about. Read full story ➯
Analysis
Skin in an emerging manager’s game.
There has been an ongoing debate about how much of a GP’s participation is needed to assure a clear alignment of incentives between a GP and its LPs. GP commitments historically tended to be 1% for tax reasons, but this has been recently changing. The latest report states that GP commitments have been rising steadily and are now typically in the 2%-5% range for 80% of firms. This trend has been criticised by many emerging managers, stating that it favours managers from privileged backgrounds, and works against bringing more diversity into the venture ecosystem. Also, if GP commitments become too large, the GP may pursue its own interests even if they contradict the partnership's interests. What has been driving this trend? Read full story ➯
From the Community
Three Point Zero Podcast
Building companies with social impact with Sara Stephens, the Founder of Rest Less
This week, I spoke with Sara Stephens from Rest Less who recently raised a €6.8m Series A round from Moneta Venture Capital for her platform that empowers over 50’s to live their best lives (see: Week 51).
In the episode, we talk about business opportunities driven by the aging population, why networks matter in the fundraising process, how to strike a balance between meeting investor expectations and delivering impact as a business with a social focus, and how to overcome fears of starting a family while building a business.
Ticket draw: Latitude59 | 24-26 of May 2023 | Tallin
The complimentary tickets winners are: Maja (8j5hf4) and Martina (bf4g6j). You can view the draw here. Congratulations! I will get in touch with you shortly.
Hiring
This week hiring:
Oja ➯ Customer Associate | Sifflet ➯ Finance Manager | Landfolk ➯ Digital Marketing Manager.
For more listings, check Female Foundry Job Board.
Founder & Investor Meetups
Wednesday, March 29, London ➯ Women's History Month London ➯ The Enterprise Day Berlin ➯ How to boost your tech career Amsterdam ➯ Techstars + ABN AMRO Fund my Fintech Online ➯ From Scientist to Founder | Thursday, March 30, London ➯ Career Roundtable London ➯ MeetFounders VC Night.
Have a great weekend. See you 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.
♡
Thank you Eden, and Mariangela Cordella from Nauta Capital for sourcing our weekly meetups.