Female Founder Office Hours: Meet the Investors Part V(ft. Beringea, Frontline Ventures and Playfair)
We’re very excited to be just a week away from the third edition of Female Founder Office Hours on June 4th. In the lead-up to the event, we have been sharing material to ensure all founders attending (& those not attending!) have a chance to get to know the funds and individual investors before their meetings.
We published our team’s tips and advice on getting what you want from each meeting a few weeks ago. This was followed by the launch of our ‘Meet the Investors’ series, where we have been interviewing the 30+ VCs attending Female Founder Office Hours over the past five weeks. Across Part I, Part II, Part III and Part IV we have had some fantastic advice on approaching investors, office hours and tackling COVID-19.
This week, we’re joined by our fifth group of investors at Beringea, Frontline and our own Managing Partner Chris Smith. Read on for insights into their investment strategy, what they enjoy discussing with founders and their top tips for office hours below:
1. What is unique about your fund?
Carrie Babcock and Emma Biasiolo, Beringea
Beringea is a transatlantic venture capital firm with over $650m under management across our offices in the UK and the US. Our footprint on either side of the Atlantic helps our portfolio companies to scale internationally through providing insights on go-to-market strategy, introductions to advisers and investors, as well as practical advice on expanding in the US.
Beringea also has a track-record spanning more than three-decades of investing, which is not always common among venture firms. As a result, our investors have seen a lot of ups and downs, and learnt what it takes to build a successful company even during a downturn. This experience has proved invaluable over the last few months.
Helena Cavell, Frontline Ventures
Platform: We were the first fund in Europe to hire for Platform over 6 years ago. You’ll find a version of this role — as Portfolio Support — in most VCs nowadays, but everyone does it slightly differently. For us, Platform is about accelerating the learning curve of our founders and CEOs. It’s about gathering and sharing knowledge effectively across the portfolio using content and events. And promoting network effects to help founders solve pressing pain points and learn faster than the speed of their own experience.
Our diligence process: When I joined Frontline, I was extremely impressed with the efficiency and transparency at which due diligence is conducted. We always aim to respect the founder by providing honest feedback and executing in a timely manner. Even when we decide not to invest in a founder, we actively try to deliver value to them — be it by helping them identify the right investor for their company and/or making key introductions.
Our network in the US: Yes, that’s what everyone says…but our secret sauce is our growth fund, Frontline X. This fund invests in US companies expanding to Europe, which opens up a US customer base as well as stellar US funds.
Chris Smith, Playfair Capital
Playfair invests in pre-seed and seed-stage tech companies that aim to rethink the way we live and work. We are driven not just by delivering strong financial returns, but by being a force for good and living our values. Everything we do is intended to maximise our positive impact in the ecosystem, especially with first time and underrepresented founders.
We are defined by our ‘angel DNA’, being founder-focussed, and seeking and orchestrating collaboration. Each team member has specific domain expertise that they bring to our founders spanning sales & marketing, hiring, and commercial and financial strategy. We invest because we share each founder’s passion for their business — we love getting hands-on and our fund size is optimised to allow us to spend quality time with each founder.
2. What investments do you enjoy looking at?
Carrie Babcock, Beringea
I spend a lot of my time looking at the technologies shaping the modern enterprise. The current crisis has demonstrated that businesses must embrace platforms and solutions that enable them to work remotely, flexibly and at pace, and there will continue to be vast opportunity for B2B solutions from workflow tools to payments.
In particular, I am interested in the cyber security industry. As our reliance on digital technologies increases, our exposure to cyber risks is also growing. As a result, I feel that there is a tremendous scope for entrepreneurs to build technologies that ensure businesses can guarantee the security of their operations, their employees and their customers.
Emma Biasiolo, Beringea
I am fascinated by the changing world of retail. On the one hand, it is remarkable to see how direct-to-consumer brands today build a tribal community of followers — Drunk Elephant and ADAY as well as Papier in our own portfolio are perfect examples of these tribal brands.
On the other hand, it is fascinating to look at the technologies and innovations redefining the way that brands, retailers and marketplaces serve their customers. The past few months have shown the vital importance of e-commerce, but it must be built on platforms and processes that are better, faster, and easier to use.
Whether it is a pricing tool or fraud detection that saves hours of manual process or thousands of pounds through better detection, I am interested as long as it has a strong story on improving and disrupting a current process and can show genuine adoption.
Helena Cavell, Frontline Ventures
We focus on pre-seed and seed stage startups in B2B SaaS across Europe. Despite being sector agnostic, we have a lot of experience in the devtool and fintech space. Personally, I’d love to see more B2B healthcare and agritech businesses! Check out my latest blog for areas within telemedicine I think will grow in a post Covid world.
Chris Smith, Playfair Capital
I enjoy looking at any investments where you have genuinely passionate and mission driven entrepreneurs. It is the joy of being an investor that we get to speak to such a diverse range of people building their dreams whilst learning about new markets, pain points and solutions.
More specifically, I tend to favour B2B business models (although my team are doing a great job of showing me that not all B2C is bad!). I guess this comes from having built a B2C telecoms business at university and then being an operator at a B2B telecoms business immediately before joining Playfair. I learned to love many elements of B2B models, not least the security of contracted revenue, generally higher contract values and lower customer service overhead.
I also really love businesses in overlooked and unsexy sectors. We have invested in founders in the shipping, construction, and waste management sectors. All old-fashioned industries with huge potential to use tech to save money or time, open new business lines, or improve safety.
3. Which part of a business do you most enjoy discussing with a founder?
Carrie Babcock, Beringea
I always love discussing the company’s origin story — it provides so much insight into the founder’s mentality and why they’re best suited to solve this problem.
Emma Biasiolo, Beringea
Every good business starts with a moment of frustration and the question: “surely there’s another way?” So I find it remarkably valuable to understand that problem and look at how the founder has shaped it into a commercial proposition.
It’s also helpful to understand what makes a business unique. Whether it is the product, the team, the business model, every business needs its advantage and it is not always obvious as an outsider. Once you have a clear sense of that USP, it is much easier to understand the road ahead.
Helena Cavell, Frontline Ventures
I most enjoy delving into the nitty gritty of a product and discussing how it solves a real pain point for customers.
Chris Smith, Playfair Capital
I love hearing a founder’s personal story, understanding how they met their co-founder(s) and what lead them to setup the company. It is here that mission driven founders really shine — their story is authentic, and you can see their eyes light up with excitement as they talk about their journey so far. It’s infectious.
In terms of a functional business area — sales. I assumed earlier in my career that sales was easy. After two years building and running the sales team at plan.com, I realised how incorrect that assumption was, as I wrote in this blog post (tl;dr initial disaster -> found my feet -> did OK in the end). Building a robust go to market plan and baking sales into a company’s DNA is a critical ingredient in creating a successful business. Often it gets overlooked as something that can be added on later or is considered of secondary importance to the technology/product.
4. What are your top 3 tips on how to make the most of office hours?
Carrie Babcock and Emma Biasiolo, Beringea
- Keep it short. Meetings during office hours are a bit of a whirlwind. Used in the wrong way, they can be manic overloads of information. So don’t feel nervous to leave a few things out — it is about getting to know you in a relaxed and informal setting.
- Be clear with what you need. Whether you are looking for investment, introductions, or commercial advice, be up front with us. This will ensure that we can focus our conversation on what matters and build a plan together.
- Learn about the investor. This is also about developing a useful connection, so do not be afraid to put us on the spot! Any investor should be prepared to tell you about them, their interests and experience, and how we might be able to help you.
Helena Cavell, Frontline Ventures
- Do your homework on your investors to ask pointed/relevant questions. This will help you leverage our experience as best you can.
- Don’t sweat it; this meeting isn’t about impressing the investor. It’s an opportunity for you to ask a VC for advice in a more casual setting :)
- If you want funding from an investor, be upfront about it.
Chris Smith, Playfair Capital
1. Research the investor you are meeting to figure out an appropriate plan for each one
2. Ensure you keep a close eye on the time and pace the session
3. This is cheating a bit, but ensure you don’t make any of the relevant mistakes here
5. What advice are you giving to startups on how to navigate Covid-19? Are you giving the same advice to scale-ups (post-series B)?
Carrie Babcock, Beringea
Runway is the name of the game at the moment. This means creating financial projections that take into account a number of scenarios and ensure that you create contingencies for significant hits to your revenue.
Once you’ve made these models, be transparent with your investors about what lies ahead and what funding you may require. Speak with any debt providers that you may have and look to renegotiate your terms. And speak with your customers and suppliers to understand their outlook.
You may, of course, have to make operational cuts or use the furlough scheme. In this instance, I would encourage every start-up to communicate clearly and compassionately. We have seen that successful teams during a downturn create cohesion by explaining the road ahead and ensuring that everyone is reading off the same page.
Emma Biasiolo, Beringea
It certainly differs between B2C and B2B businesses. For B2C businesses, ecommerce across many verticals is exploding right now as people are stuck at home and purchasing online. If your product tends to rely upon the experience of buying in-person, take a look at what you can tweak for people purchasing at home. Can you provide a virtual class or showroom, or do you need to adapt your product lines and marketing to focus on loungewear and homeware?
For B2B businesses, it is essential to understand the problems faced by your existing customers. Retention will be key, as generating new sales in a world without events, conferences or in-person meetings is clearly challenging. Therefore, evaluate your customer base one by one, highlight who might be at risk of churning and immediately focus on the customers that might need a bit of TLC!
Helena Cavell, Frontline Ventures
- Cash is King. Assuming no further sales, ensure you have a 12 month runway.
- Build a structured Covid financial plan to communicate to the team and investors alike. Your employees and investors will appreciate the transparency a lot.
- Covid could be a good opportunity to explore the market and work on your product. Stay lean and talk to prospective customers.
If you’d like more detail on the points above, check out my colleague’s blog!
Chris Smith, Playfair Capital
There has been some fantastic advice on this in previous interviews, so I am just going to focus on one. And that is for start-ups and scale-ups to carefully balance cutting costs to extend runway with maintaining momentum. The objective here is not just to extend runway until the funding environment improves; it is to make sure that you continue delivering on the milestones that get the business to the next level. Get this balance wrong and there is a risk that you become a zombie.
You can follow the Playfair team on LinkedIn, Twitter, Forbes, Vimeo and here on Medium. If you’re a male founder and would still like to pitch us, please submit your application on our open-to-anyone pitch page.
You can follow Tech Nation on LinkedIn and Twitter. If you’re a founder, you can register for the free Founders’ Network programme.
