Female Foundry Week 90: You. Me. Together. How to scale yourself down. Female Foundry x Slush. Venture capital management fees dip. Is European VC outperforming American?
Welcome to The Week 90, 2023 Edition of the Female Foundry newsletter!
Female Foundry - where investors and female founders meet.
In the news
London-based Elyos Energy, co-founded by Philippa Brown, picks up a £2.5m Seed round led by Rebel Fund; Amsterdam-based Cino, founded by Lina Saleh and Elena Churilova, fetches a €1.4m Seed round led by Tera Ventures and APX; London-based Lightning Reach, founded by Ren Yi Hooi, fetches €1m funding from several investors including Growth Impact Fund; Munich-based Orbem, co-founded by Maria Laparidou, bags a €30m Series A round led by 83North; Berlin-based HealthCaters, founded by Tatyana Eliseeva and Lilia Krause, secures a €1.2m Seed round led by Barmenia Next Strategies; Copenhagen-based Klimate.co, co-founded by Katja Grothe-Eberhardt, secures a €3.5m Seed round led by Rockstart.
Spotlight
You. Me. Together.
The growing M&A activity among alternative asset managers, such as the recent announcement of abrdn selling its private equity unit to Brazil's giant Patria, may now be picking up within venture firms too. In the past two weeks, two significant VC M&A deals have been announced.
First, Motive Partners announced a merger with ABN Amro's fintech venture fund. This is not Motive's first M&A transaction. Around the same time last year, Motive agreed to acquire embedded/capital, just eight months after embedded/capital closed its €100m fund. This time, by taking over ABN Amro's €150m portfolio, Motive will significantly expand its asset base (and most likely increase management fees), while ABN Amro will retain the financial upside as an LP.
Second, following suit, American General Catalyst announced earlier this week its merger with a German early-stage VC fund - La Famiglia, which just 6 months ago closed its €250m fund. While this move seems somewhat more surprising, General Catalyst will undoubtedly benefit from La Famiglia’s European early stage networks and knowledge, and La Famiglia, a much smaller fund ($25bn vs $360m in AUM), will make its fundraising more future-proof.
With a shaky fundraising environment and diminishing management fees on the horizon, this might just be the beginning of consolidation with more VC M&A to come.
Fundraising
How to scale yourself down.
As an early-stage startup founder, you are constantly challenged by a lack of resources. You need traction to raise capital but to gain meaningful traction you need capital. It is paradox that almost every early-stage founder faces - but only a few manage to break-through this seemingly closed circle. How do they do it? They know how to scale themselves down, how to delegate.
Here, there are really only two questions to ask: WHAT shall I delegate? WHO is the best person I should delegate ‘WHAT’ to. WHAT: Remember, as a founder you should use your time on the most critical tasks for the business, and the tasks that only you can do. Delegate what you can’t do. WHO: Give the work to people who deliver, not the people who are the least busy. Leverage technology. Hire only the best - don’t settle.
Remember, by delegating, the key is to free yourself to do the essential: drive vision, fundraise, make strategic connections, so invest your effort in communication. Establish clear deadlines and milestones to check up on progress. Always give enough detail for clarity - but focus on the outcome and direction - TRUST. Remember, delegate responsibility AND authority, not just the task.
Finally, embrace your fear of delegating. When done right - delegating will allow you to drive vision, bring the team together and open up a new set of opportunities, that in return will drive vision, bring the team together and open up a new set of opportunities..
Community
Female Foundry x Slush
Slush, which is taking place on the Nov 30–Dec 1 in Helsinki, is an official partner of the State of Gender Diversity in European Venture initiative we are leading at Female Foundry. We have one ticket to give away to a lucky winner who has completed the Survey. To enter a FREE ticket draw, fill in our 3-minute survey.
*We have a number of free perks that we will go to lucky winners that have completed the Survey. We will be announcing the winner of the Slush ticket in the newsletter in 2 weeks’ time. Good luck!
Analysis
Venture capital management fees dip.
Management fees are one of the biggest costs for limited partners when investing in private capital, often determining the relationship between GPs and an LPs. According to the report released last week, venture capital management fees slipped to 1.97% in 2023 from 2.02% in 2022, marking their lowest level since 2017. In 2022, one-fifth of VC funds charged a management fee above 2.5% — in 2023 that percentage declined to 16.29%. Tighter monetary policy globally means that GPs are now competing for a more limited pool of capital, which clearly has been strengthening LPs' position in negotiations.
Is European VC outperforming American?
Recently released data reveals that European venture capital has been outperforming American - with Europe surpassing the US over the past 20, 10, and 5 years in net annual returns by 0.31%, 1.92%, and 6.24%, respectively. Many industry players have found the findings of the study surprising; Europe has long been regarded as more risk-averse and deploying less capital in venture. The difference in capital availability between the two regions is actually significant and relevant.
Currently, the US has about 2,361 venture firms with an estimated $271bn under management. Europe has 199 firms with about $44bn under management. To put that in context, the US has 55,079 startups, while Europe has 39,668. That means the US has $4.9m per startup and 23 startups per VC firm. In Europe, that’s just $1.1m — and as many as 199 startups per firm. That abundance doesn't appear to drive better outcomes for venture capital.
The study concludes that European venture capitalists' focus on higher quality investments, not just deployment speed, has been paying off, resulting in higher returns. Interesting.
Hiring
This week hiring:
Opna ➯ Marketing Lead | Incapto ➯ Customer service agent con Francés | Morphoses ➯ Business Development Representative.
See more jobs on the Female Foundry Job Board.
Founder & Investor Meetups
Monday, October 23, London ➯ Climate Pitch Techstars London x Techstars Sustainability Paris | Tuesday, October 24, Amsterdam ➯ Hackathon Circular Biobased HUB | Wednesday, October 25, London ➯ London AI Breakfast | Thursday, October 26, Berlin ➯ The Black Girls Tech Summit 2023: Berlin Edition.
Have a great rest of the weekend! See you next weekend!
Agata
Written by Agata Leliwa Nowicka, an investor, a startup adviser, 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 Tatiana for your help.