Situation Room #10: Special EditionFemale Founder Office Hours

Published in

byFounders

9 min readJun 14, 2020

Last year we hosted Denmark’s first-ever Female Founder Office Hours, facilitating meetings between female founders and female investors from all over Europe. With the ongoing situation, founders have been mostly unable to meet investors face to face. We created a digital space this time around with a stellar group of female investors dedicated to virtual roundtables allowing female founders to connect with the investors in a more intimate setting.

After the roundtables, Ida Åsle moderated a panel discussion featuring a selection of female investors from across the Nordics and Europe. They tackled topics such as:

What the various funds do to increase the diversity of their deal flow
How they evaluate teams
The issue of closed networks and “warm intro” requirement posed by some VCs, what this means for founders and how they can deal with it.
What it means for venture capital as an asset class, and hence, society overall.

Despite being seen as one of the most gender-equal regions globally, venture capital in the Nordics skews heavily towards all-male founding teams. In 2018, only 11,8% of venture capital investment went to teams with at least one female founder. Considering the vital role venture capital plays in shaping our future, this discrepancy raises some flags. How can it be that the future is built overwhelmingly by men, for men? What remains to be done, and how can we help each other get there?

Read the below summary or listen to the recording to learn with us on this important topic.

A situation report

Tips and tricks from investors

The messy cap table debate — recommended read on this: “Strangling yourself with a cap table” by Erik Byrenius.

It doesn’t necessarily mean a long list of investors or angels but rather when someone who should not have control has control.

2. How to think about investing in the current climate

Think about when it makes sense to bring in investors for your company
Think about what value can a specific investor bring to you other than cash
Think about your business and who would be the best ‘fit’ at this point. Is it an angel, a group of angels, or a VC?

3. Interactions between fundraising

Not everything takes place at the actual time of fundraising
There is a lot of back and forth, and you stay in touch — How do you do that? One of the best ways of doing that is finding that middle ground where you don’t become another.

4. Guideline on fundraising now and post COVID-19

Despite seeing some slowdown from many funds and investors at the beginning of COVID-19, funds will continue to invest
Many funds have a four-year cycle, so you will see them opening up again
Keep investors warm by keeping people posted
How you can argue for your valuation by looking at venture marks of other companies and also looking into your specific industry — be prepared to educate your investor about the industry you’re in and industry-specific timelines — this is to avoid investors comparing you to other companies who may have been around for the same time as you but operate on very different terms due to the difference within industries

Ida Åsle(byFounders), Hekla Arnardóttir (Crowberry), Pauliina Martikainen (Maki.vc), Louise Samet (BlossomCapital), Sanna Westman (Creandum), Sara Rywe(byFounders)

Balancing the ratio of investments between male to female founders — what can funds do?

Track the statistics
Actively seek out female founders
Ask questions when you meet male-heavy teams — it is always good to ask them why there are no women in the team, especially when they’re tackling female user dominated products
Actions you can do on the board level post-investment — when the founders are handing out stock options to new employees, there is a risk that bias has an effect. Startups must have a clear plan for stock options and stick to it to ensure that they are fair. So when the “clever” male arrives, there is a plan, and it will be more difficult for him to convince that he needs more than the others.

Diversifying deal flows

Two central problems to solve. Number one is the top of the funnel — how many female founders do we see? Even like walking through our door? And what can we do there?
Be visible, be very open, target specific events not only for male audiences to increase the number of women-led companies that walk through the door.
Ask yourself within the investment team: Where are we in the investment team about biases? Why do they exist? Do they exist? What are some warning signs for which we should look?
Then evaluate — ensure to assess on the same parameters, and in alignment with your colleagues
Look through those parameters with your team — it could be anything from previous experiences to skill sets, to how you complement each other in the team, but just force yourself to walk through those
Use a Red:Green: Yellow system — if there are too many red flags, maybe you should not invest — this will help reduce the biases and help you make a decision based on concrete variables
Have a diverse investment team — it can contribute to a great discussion with different perspectives if your team consists of different genders, ethnicities, and backgrounds

Being a venture investor is about seeing the alternate or seeing the potential where it isn’t visible to everyone else.

Decision making can be made easier based on available information, data, talking to other people, and gaining different perspectives.

Are female partners skewed towards female founders — is it this simple?

The existence of female partners doesn’t necessarily mean that the overall dealflow skews towards female founders…
However, female founders probably feel more comfortable reaching out to female partners.
The emphasis is on…not waiting for people to reach out to and being very active as an investor to get in touch with other people regardless of gender.

Taking a stab at the ‘taboo’ of female founders and planning for a family

Family and personal time is a priority for the new generation — there are still differences between the systemic approaches within different geographical areas
The first step in how you can combat this regardless of your location is by setting your company up for success based on some of the below parameters:

Have a co-founder or a good team who can take over while you need to go away.
Approach a mix of work and taking care of your family if this suits you better
Planning is critical — have a plan, be transparent about it, dare to show investors your plan, and prepare to take on failures
Consider if the investor is right for you — if you nail the above, but this is still a cause of concern for the investor you are talking to, ask yourself the question: are they right for me, and do I want to work with them in the first place?

The concept of warm intros — getting into a VC funds pipeline in the “right way.”

Warm intros are now more important than ever…?

Some investors see the ability to obtain a warm intro as a kind of test or sign of a founder’s scrappiness and hustle and an essential indicator of their success in later fundraising rounds
Others see this ability as more of a privilege or a signifier of such, and excluding to those who don’t have the right connections.

…or are they outdated and counterproductive?

The network which we see has very little to do with the ability to scale a business successfully. I know that you have some thoughts on that, in particular.

“I’m amazed that people still require it and think that it adds some value — I think it’s completely outdated.”

Everything is happening remotely at the moment — and relying on someone else’s judgment may be quicker than doing your validation as building trust between parties that have never met face to face takes time and quite some calls…
Try and find ways to have time to do that validation work yourself
Relying solely on warm intros is dangerous, especially now during a crisis, we should be extra cautious about not getting too comfortable relying on those old existing networks and systems.
Investors are also more approachable now because we all are back home — so even though you’re in Copenhagen, you can’t meet people.

“I appreciate when companies approach me with a tailored approach. Putting the energy into conveying the message directly, as a founder, can be very valuable to convince an investor. Why should we have the conversation around this? You're the best person to tell that story.”

It’s all about looking at who are you reaching out to
Go through this exercise every time before you decide to reach out to an investor:

How could they think that your product is exciting?
And how do you think that we could be working together?

References (especially in these times that are more important than ever) vs. warm intros.
Being able to reach out to people as an investor to hear how was this person to work with in a previous job, or how is this person was to work for can be very useful.

“The normal process for us might be that we have a couple of zoom calls, but then we get to a point where we visit the office, and we can meet with employees to see if they treat each other with respect? Do they have a good positive company culture, which might be very difficult to understand through a call.”

Are there any criteria that startups need to have in mind before partnering up with angel investors?

Show that everyone on the cap table is active within your company
Most importantly — that you are as a founder in CONTROL
A good CEO at seed stage should own the activities of the company
On the other hand, bringing in an angel gives you a fantastic opportunity to build your team without paying anything in payroll or without giving up and diluting yourself
Many angels are willing to support you on your journey, whether it be anything from operational things such as helping you with even sales or partnerships. It can also just be as simple as knowing how to fundraise and support you when you build your first pitch deck for your seed round.
Choosing the right angel investor is very important — as a founder and particularly early stage, it can feel lonely from time to time. No matter what, if an angel can support you on your journey and it’s a person you think you can trust, that will mean so much to you
When looking out for positive signals, try to consider who would compliment you — if you have managed to attract great angel investors, that’s amazing. If you’ve managed to attract any type of angel investors, that’s good, too. But it can be very positive if the person you choose is someone who complements you with sector knowledge or who is an experienced company builder.

Final words…

Huge thanks to everyone who contributed to this episode, the most engaging episode of our Situation Room Series to date!🙏💥

And a big thanks to the investors for hosting this episode with us:

Anna Grigoryeva (Karma), Beata Klein (Creandum), Ekaterina Gianelli (Inventure), Hekla Arnardottir (Crowberry), Helle Uth (PreSeed Ventures), Jenny Ruth Hrafnsdottir (Crowberry), Jessica Rameau (Wellstreet), Kajsa Gatenbeck (Schibsted Growth), Liisa Suvorova (Karma), Louise Samet (Blossom Capital) Magda Lukaszewicz (Balderton), Maxine Rior (Northzone), Pauliina Martikainen (Maki.vc), Sanna Westman (Creandum) Sara Rywe (byFounders), Thea Messel (Unconventional Ventures).

We are rounding off the season before the summer…

…and hope to see you for our final episode in two weeks on Wednesday, June 24th, for🧬 Situation Room #12: Putting trust back in Technology. 🧬 We will be talking to Lars Thinggaard, recently stepped down CEO of Milestones Systems and Thomas Madsen-Mygdal, co-founder of Techfestival.

Both members of our byFounders Collective, we’ll talk about Lars’ newly published book “Tech For Life”. In it, Lars and his co-author Jim Hagemann Snabe address the trust issues in tech and its leaders — encouraging opinion leaders in our community to take back control and use their immense influence in the world for good.🙌