On your podcast, you’ve hosted insect farming entrepreneurs and security experts, people from the U.K., Sweden, and France. Talk to me about some of the trends and the patterns that you’re seeing in the entrepreneurial landscape across Europe, either in terms of geographies, industries, funding for emerging tech, or maybe even the business environment in which they operate.
One thing Europe is doing well and I don’t know if it’s a double-edged sword actually is they have a lot of EU (European Union) grants. A lot of entrepreneurs that I come across when I asked them about their early stage funding it’s typically been from grants. So there was a company that was very high risk in the supply chain and blockchain technology. It was too high risk for VCs to put money into it. They got an EU grant. I sometimes wonder whether the reason those grants exist in the first place is because there isn’t enough funding in the very early stage of start-up. There are incredible statistics that show that in 2016, there were 5,300 pre-seed or small seed rounds between zero to two million. But in 2019, that has now gone to 3,500, so it’s actually decreased.
The second thing in terms of where in Europe entrepreneurship is, I think it’s thriving in every part of Europe. But the ones that I’ve seen which reached the unicorn status continue to be the five big countries in Europe, – UK, Germany, France, Spain and Sweden. The really big exits, the really big mega funding are all still in those big hubs of entrepreneurship.
Anu Duggal of the Female Founders Fund has a podcast called The Two Percent which references the amount of VC funding that goes to female-led businesses – 2%. I find it shocking. Tell me about your view of the culture of funding and any trends you’re seeing in the European space.
Actually it is really shocking because in my in my podcast, I’ve had so many women that it’s incredible seeing what these women are doing and accomplishing that so little money is actually going into female led businesses. If you look at just this year, apparently only 0.7% of all VC funding has gone to women-only businesses in Europe. Only 0.7% of the total funding, or about 400 million has actually gone to female led businesses. It shows that there’s still a huge gap when it comes to women entrepreneurs, not just globally, but definitely in Europe.
Specifically as these trends and patterns relate to women, what insights have your podcast conversations provided?
Let me start with the positives. The women that are becoming entrepreneurs are young, they’re ambitious. I’ll give you a few examples. I interviewed Olivia Ahn. She started a company called Planera, about creating biodegradable sanitary pads. It’s good for the environment, which is all reasonable, but her overall ambition is to change the language and the culture around women’s health and how we think about these things or the taboo in a lot of cultures around menstruation.
Or Mikela Druckman. She is a founder of Greyparrot.ai. She’s using AI to see how we can make garbage more data-driven because the truth is, even though we all want to recycle, something like 14% of everything you put in the recycling actually gets recycled because a lot of that is not sorted properly. She’s applying AI to digitize garbage so that more of it goes into recycling.
So these are really high-impact problems and being solved by such young women entrepreneurs that I feel very bullish about women entrepreneurs in Europe.
You also noticed that women entrepreneurs tend to solve problems they can relate to.
Like women’s health, fertility, beauty, wellness. But it also creates a question in my mind on why they have not been able to pitch before. Because on the other side, the people giving the funding, if you have men sitting there that can’t relate to the problem you’re trying to pitch, then it’s hard to close that deal.
A third trend I noticed is more women angels and VCs. I interviewed Mary Outtier who had a successful exit selling her company to Twitter. Now she does angel investing, trying to help other women to fund their businesses. Or Deepali Nangia, who’s a VC and a partner for SpeedInvest. She only funds women-led businesses. So I think we need more of these people on the other side.
Deepali was the one who said on your podcast that 90% of VCs are white males. What are they going to do with sanitary napkins.
I think because there are so many deals, it’s easy for them to not get into understanding that business and understanding that market and just moving on.
Is the amount of capital and available funding increasing?
If you look at reports on Europe by Pitchbook, Dealroom, the overall funding for European startups has been increasing. That trend continues to increase the number of mega funds. So there’s a lot of positive momentum. It’s just the gaps. When you dig deeper and you see that the very early pre-seed isn’t there, or women-led businesses continue to get less, that you see the problems, but at a very top level, yes, Europe is doing very well.
Ok, let’s get back to trends.
So I talked about some of the positives in terms of women-led businesses and what I’m seeing as patterns, but they’ve also been some really good insights on how to make this ecosystem better for women. One of the biggest blockers is not having enough women at the decision-making level for VCs. I read that only 10% of all the VC partners, the general partners, in Europe are women. If you’re not there at that decision-making table, then it becomes harder for some of these women startups to get funded.
That’s one big thing that needs to change.
Based on your 61 podcasts, what advice do you have for other entrepreneurs and founders and maybe we want to focus this around pitching or positioning.
Let me start with the pitching. The best advice I heard actually was Tim Sadler. He’s the co-founder of Tessian. He’s like, assume that you have the product and the numbers. The difference between what makes for an incredible funding round and a normal funding round is the story that you tell. What you as an entrepreneur need to do is paint a picture of what this company is going to look like at IPO.
Having gone on this journey, I feel that the biggest advice I can give is do what you’re passionate about. When I started this podcast, I didn’t really even think that this was a business. Then one thing has led to another, in terms of my consulting business, in terms of this community that I’m creating. It came because I just did what I thought I would love doing.
The other thing I did in the pandemic between starting these initiatives was I read Managing Oneself by Peter Drucker. What it does is it makes you think about what your value system is, what kind of environment do you work really well in? Do you like a collaborative environment? Do you like to work alone? Do you like to manage people? These little things that you probably have never thought explicitly, but that make a big difference in terms of whether you would be good as an entrepreneur, as a consultant or as a manager in a bigger company.
Then the last thing is, I’ve heard this from entrepreneurs and I’ve seen it in my own business. There’s so many signs and data you’re going to get that, saying, this is not on track and this is not going where you wanted it to go. It’s so easy to get discouraged. The best advice was actually one I heard Seth Godin give. He said, if you understand that what you’re doing is for someone else, like it’s actually giving value and helping someone else, it’s going to be easy for you to keep going, because then it’s not about you. It’s about your belief that you’re giving value to someone else.
We’re going to now enter the rapid round. You do this at the end of your podcast too, mine is a little bit different. Who are the world leaders or executives or public figures that you admire and why?
One is Jack Ma, the founder of Alibaba. I read his book and I was just amazed at how that streak of entrepreneurism existed in him, even as a young boy. Another one would be Obama. It’s not just about his charisma, but that when he was the President of the United States he didn’t forget what his priorities were in terms of his family, his wife and his children. That that is so hard to do, especially if you’re busy.