🎙️ EP13: How to Fundraise During COVID-19 with Laura Connell, Principal at… | InvestHer Podcast

Welcome to today's episode, episode 13 of InvestHer Podcast. And today's a special one because it's our very first live podcast with special guest Laura Connell from Balderton Capital in London. Now, why is it special? Because we are recording this live, so we have participants who are on with us live and able to ask Laura questions about fundraising during COVID-19, which was really great. It made for a very interactive session. So So she shared loads of amazing advice to all of those founders out there looking for funding during these really funky times, and I think you're going to enjoy it. So listen in. It sounds a little bit different because it's a, it's a live one, and I'd love to hear what you think. If you like it, please, please, please go ahead and leave us a review. We love to hear from you, and I want to start reading out the reviews in our next podcast. So please do. If you like what you hear, leave us a review. We'd love to hear from you. Enjoy this next episode and see you soon. Investor Podcast is for you, the female founder who has a product, a service, or a message that you believe in and need to get funded. Or for you, the investor who wants to learn more about the huge untapped investment opportunity that gives you a higher return— women entrepreneurs. My name is Anne Ravanona. I'm an entrepreneur, TEDx speaker, and women's advocate, and I'm passionate about helping women entrepreneurs get funded. In each episode, we'll take a behind-the-scenes look into real-world funding tactics and strategies to help you get the funding you need faster. Let's put the fun into funding. Thanks for spending some time with me today. Now let's get started. So welcome everybody to our latest episode, episode 13, lucky 13, of InvestHer Podcast, and this is a special lucky because we are recording it live with Laura Connell, who is a principal at Balderton Capital in London. Welcome, Laura, how are you?

Very well, thank you. All the better for chatting to you today. Thanks for having me.

Oh, and thank you so much for being here. We're excited, so excited to have you here because, A, it's our first live podcast, which for everybody in the audience, both who are watching us and listening to us, what does that mean? It means that we are recording it live now. You can get to ask your questions live for those of you who are joining us. And for those listeners who'll be catching it, we'll be going— we will be publishing this podcast in a couple of hours, so that's why it's going to be very quick turnaround. You'll have it in InvestHer Podcast in your Apple, Stitcher, Spotify in about 2 hours, and we will have the video recording as well very shortly on our YouTube channel. So with that, I wanted to say thank you so much, Laura.

Thank you.

Let's kick things off by saying first of all that we have Loads of participants from around the world. We have the majority from the UK, Ireland, Bangladesh, India, Thailand, Switzerland, Germany, Bulgaria, and loads of pieces, France, and so on. And what's very exciting is quite a lot of our participants are at seed and pre-seed, pre-revenue level. So just to frame that for when we'll be talking, your advice on how to fundraise during COVID-19 would be super to note. So let's— before we start, can you tell us a little bit about yourself, Laura? Let our listeners know, who is Laura Connell?

Sure, absolutely. So, so hi everyone. A bit about my background then. As I was mentioning to Anne to begin with, I am half French and half British. I grew up in London but spent a lot of my time between— back and forth to Paris and the Big Smoke. Before joining Balderton, I started my career in investment banking. First of all, at Goldman Sachs, actually in the investment management division. I was investing across assets in their portfolio management team, and thereafter in the M&A team there, again covering European banks and insurers and fintech. And I did that for almost 6 years. And then interestingly, and I you know, it'd be great to hear what some of you have done when we get to kind of the Q&A. But interestingly, after that, I took a bit of a segue in my career and actually thought there was a good moment in time to go after something that I'd wanted to spend time on for some time, and that was to go back to academia and develop some products around neuroscience and diagnostics for early onset of various neurodegenerative diseases.

Wow.

Imperial College in the brain sciences team as an assistant researcher. So I spent some time there, and that transition actually in my career really set me on the path to working with other founders and the venture ecosystem generally in London first and foremost. But it's also how I really started to engage with, you know, the tries and tribulations of raising early rounds. So I started doing a lot of advisory work to fund myself through my research years. And that also set me on a path to familiarising myself with more of the VCs in the ecosystem, which is again how I kind of in the end joined Balderton a couple of years ago. Somewhere along the way, I did an MBA at Harvard as well. So a few different things there.

I mean, how amazing is that, everybody? She speaks fluent English, fluent French, she's done an MBA at Harvard, she's been working as a research assistant in neuroscience at Imperial College, and she's a VC and has invested in a few startups across different sectors. Talk about a fabulous guest to have with us. We're really, really pleased. So can you tell us a little bit, for those who don't know Balderton— now, people in Europe would know your name very well, but for those of us from around the world who may not know you yet, can you just give us a feel of who you are, what you invest in, so that we have an idea?

Sure. So Balderton has been one of the most active and long-standing venture funds in Europe. We've been around for the almost 20 years, in fact, just over 20 years now. We were initially part of Benchmark US and then spun out. And in fact, we've got, you know, some of the partners who were from the Benchmark days, but we've also now built the team out significantly to a really fantastic mix, I think, of ex-operators as well as professional lifelong investors, which is a really powerful combination, I think, from a founder perspective. And so historically, we've really focused on Series A. That's been our sweet spot, and we've invested the best part of $3 billion across 7 early-stage funds, doing seed and Series B opportunistically, but mostly really focusing on Series A. As you know, the definition of Series A has changed significantly over that timeframe, and we can talk a little bit about that.

Yes.

But we also have a slightly later-stage fund, which I help to run, that invest in Series B and onwards. And again, we can get to that. So that's a little bit about us. I think in terms of the sectors that we cover, we are a generalist fund.

Mm-hmm.

I'd say that we do a fairly even split of consumer and enterprise SaaS. You know, we've done a lot of fintech, and to give you a flavour of some of the names that we've invested in, we seeded Revolut, for instance. We were early backers of names like Cardless, Psychodictive, the Hutt Group, Cobalt, and we're still very active in this environment. So that's a bit about us.

Amazing. Can you tell us like one fun fact about yourself?

Yes, well, I don't know if it's fun, but I'm a twin. There's one of my facts about me.

So identical or non-identical?

Unidentical. I think, yeah, being an identical twin would have been much more fun, better party tricks. But yeah, not identical, but she also lives near me, which is great.

So cool, that is a cool fun fact, I love it. Okay, so as we have framed our discussion today, let's get down to the heart of things. How do you think this COVID-19 situation is affecting funding in the landscape as you see it, Laura? Let's start that. How's it going to impact things as we move forward? That's a big question.

Yeah, so I think, and if I Tell me if I've interpreted the question— if I'm interpreting the question correctly, but really, I think you're asking, you know, what is the appetite right now for financing in venture and from existing venture investors?

Yeah.

And the way I think about it is in terms of the different types of venture investors there are in the ecosystem. So on one hand, you have funds like ours, who are independent venture funds, early-stage venture funds, who've kind of are well capitalised. So we raised our latest fund at the early stage end of last year, so we've got lots of cash still to put to work. Then there is kind of another bucket of venture funds that are perhaps corporate venture funds, that often are part of a broader company, so sit under the company umbrella. Sometimes those companies might be publicly listed. And the reason I mention that as an example is The fact of being publicly listed or being, you know, a corporate with divergent— not necessarily diverging interests, but with other interests and other, you know, key areas of focus can mean that in this kind of an environment, there's less of an appetite to invest in liquid assets if your kind of public valuation or any of your liquid assets for that matter have come off significantly. So that can, you know, that obviously in that bucket, you'll see more of a muting often of appetite. And that is what we've seen play out. Not for all, but for some of them that have been more effective than others. And I guess the final bucket is strategics, by which I mean larger— like the PayPals of the world, or Stripe, for that matter— who may want to invest as part of their future growth and like to get in at the early stage.

Mm-hmm.

In those kinds of VC investors, early-stage investors, actually now is a really good time to be active, partly because they'll see— be completely transparent— the market's come off a little bit, valuations maybe may have come off a bit, and there are people who need funding and, you know, are more amenable to working with them. So, you know, I guess the point I'm trying to get across is it is quite variable. A lot of funds in our position are still very active, but for others who, for various reasons, are more impacted by illiquid assets, So can you kind of—

let's step back a little bit for those on the call who are live, and there's a lot of them who are pre-revenue and seed. So for those who are pre-revenue and seed who would be thinking of looking for funding, what specific advice would you give to them now, Laura, on how to navigate this situation?

Yeah, so I think, you know, Yeah, I mean, my best advice is don't sit on the sidelines and don't kind of self-select out of the process. You know, it is the case that investment decisions will probably take longer, meaning that you really want to get started sooner. There are people who— and funds who've been quite open about the fact they're not investing currently in this environment because they can't meet people in person at the early stage.

Yeah.

particularly at the seed and Series A stage, meeting and building rapport with the founder is absolutely critical, because so much of the decision is about the founder. But there are lots of other funds that are still investing. So if you kind of focus on that group of people, those funds that are still investing will just take a bit longer to invest. So you want to be having those conversations sooner, not later.

So when you say a bit longer, what kind of a timeframe do you see that as being? I mean, knowing that each sector also has its kind of timeframes as well, with regard to funding decisions?

Sure. I mean, look, it's hard to say, really, because— and I know that's not a very satisfactory answer, but put it this way. I think if you believe that one of the most important things is your ability to build rapport and understanding of the founder, you know, and of the team generally, how long is a piece of string, really? But you need— it will just take a kind of greater number of iterations to get there. So I don't want to say it's going to kind of take twice as long or whatever, because, you know, we've been in processes recently where actually we've moved quite quickly, provided we've had enough touchpoints. But, you know, you just want to give yourself the best shot and start sooner.

And I like the way you said at the beginning of this tip, you said, don't self-select out. And I think that's very, very relevant to first-time founders and specifically to female founders. So can you tell Tell us a bit more about what you mean by that.

Yeah, well, I think, you know, that there is a danger sometimes of when you look at the environment right now, it would be easy to say, God, this is such a mountain to climb, even in a good environment, that really I'm just going to sit on the sidelines for some time and come get back into the market when everyone, you know, decides that they have an incrementally greater appetite to invest. And I'd rather not kind of hit myself against a brick wall, so to speak. And the danger with that is that the mountain to climb is going to be the same whether you start now or later, and what you've done is just delay the process. And, you know, the other problem with that is that if you're thinking it, suffice it to say that other people are thinking the same thing. So you're not giving yourself an additional edge by waiting. In fact, you're just giving yourself less of an opportunity to build rapport So, you know, I think I'm guilty of it often. If I'm looking at a difficult situation and I don't have to do it right now necessarily, sometimes one can procrastinate. But don't, you know, try not to do that.

I think that's really sound advice. It's also because, like, when we think, look back and look at kind of the different times of the year, again, some people may think that early January in the new year is a bad time to be trying to talk to investors, or at Christmas time, or Thanksgiving, or, you know, somewhere around those holiday periods. How would you compare that kind of situation to what we're living now? Would there be a comparison or not really?

Yeah, it's a really interesting question because on the other hand, in this environment you'd say, well, okay, first there's COVID, then there's the summer. Yeah. And so what, should we wait until September? I mean, because we're mid-May now. But the truth of it is, is that we're in such an unusual environment. I honestly, I don't know what the summer will look like. I would posit that it's quite likely that given people are not going to be able to go on holidays or travel abroad, that they will keep working to a greater extent than would otherwise have been the case over the summer. But, you know, the range of possibilities is still quite large, so I don't think again the right thing is to say, well, things have happened in the past in this way, summer gets quiet, therefore, you know, let's just wait, because frankly I'm seeing a lot of people get on with investing anyway, and I suspect that that's going to carry on over the summer as well.

Because again, as you said, that for a lot of the funds who've just, you know, raised a fund and they need to start to deploy capital, they've got to get that money out and put it to work. So they'd be looking, fishing for the good deals because they've got to get it out in the first 2 years or 3 years of the fund and then continue. Because the other trend that I'm hearing is, ooh, like particularly in the States, Oh, you know, some of the funds are like, they're saying, no, we just want to reinvest in our current portfolio companies. We're getting a bit of cold feet, so we want to reinvest, shore up, you know, our current companies, just do a scan and see who's doing well, who needs more help, and re-inject and help those in our current portfolio before looking outside. Is that something that you're seeing or doing yourselves at Balderton?

Yeah, so look, I think that there's definitely an element of our working or kind of re-engaging with founders we've been speaking to for some time, who we've been building rapport with, and that does make things easier for us in terms of making a decision, for all the reasons I've just said. So much of the seed and Series A decision-making process is driven by our view of the founder, our kind of relationship with the founder, really, that you build over time. So, You know, I think it's fair to say that there is a natural skew in this environment to therefore those people you've already built that kind of a relationship with prior to COVID. But we are also very actively building new relationships, and we've just closed several investments over the— and announced them over the last couple of days.

Yep.

That have essentially been run almost entirely remotely. Yeah.

And they're big investments, and that sort of— oh, we're getting a bit of echo there, Laura. I don't know why. I can hear myself sometimes when I talk.

I don't know why, but If there's anybody—

I think everybody is on mute apart from us, so just, we need to keep an eye. Just to our listeners who are live with us, please type in your questions, any questions you have for Laura, stick it in the chat box. I'm not going to bother looking in the Q&A. Go straight in the chat so we can see it all, because I do want you to be able to ask your specific questions. And just let me know now in the chat box, are these questions helping you already to get a feel of what's happening in COVID? So just a quick Yes, no, I want more, just stick them in the chat box to see how we're doing so far, to make sure that we're giving you what you need, which is important. So while they're doing that, so how would you say, you know, VCs in London are specifically reacting to COVID? And then maybe from having spoken to partners across the waters in the US or in other countries, what differences you may see?

Yeah, so I think I'll give you the full story of how we responded, essentially. So, and I think there'll be lots of VCs who are in a similar position. We went from having a trial work-from-home day mid-March— it was on a Thursday and we were going to come back into the office on Friday— to not coming back into the office after that trial day. And have been working in a distributed fashion subsequently, and that will be true of all of VC funds at this point. In some ways, you know, the job of being a VC lends itself to that, because it is a kind of highly autonomous team generally, and we do tend to work in fairly independent ways and build rapport on a kind of bilateral basis with founders often. You know, I think we decided very early on that whatever term sheets we had issued prior to COVID, we would honour. Not everyone did that.

Yes.

You know, for reasons that are good and some that are not as good. I kind of can understand that, but that was not our— that was not the decision that we came to. And subsequently, we said, you know, this should be a really good opportunity for us to work with some really great founders. So we're still sourcing, we are still running our investment committee as usual on a Monday through Zoom. You know, I have as many meetings now, if not more so, than I did prior to COVID. And in some ways it's amazing. I think everyone's noticed how much more you can get done in a day, for better or for worse, by the way. When you're at home, you have no excuse to go anywhere else.

And again, I would say that with a caveat of if you don't have small children or pets or dependent others that you have to look after and cook for, because I know that There are a lot of women in particular who are really suffering from already having to carry a lot of that unpaid care work, and now it's just becoming extremely difficult. So yeah, I hear you, I hear you loud and clear. Yeah, definitely.

Absolutely, I think that's right. So on that point, I can't— I don't have nearly as much to manage as I think lots of other people do at this point. So, you know, yeah, absolutely. I think one of the interesting things that I've to give you an insight into some of the conversations I've had with seed-stage founders recently, is, you know, yes, it's a difficult environment to be operating in, but frankly, the opportunity cost of you doing this right now will never be lower. Meaning, there are not a massive number of other things or jobs waiting, or, you know, perhaps there will be for some of you, but for a lot of people, the job market out there is going to be very tough. And that means 2 things. One, opportunity cost for you is low if you want to start your business and go after it right now. 2, it should be a fantastic opportunity to pick up some really high-quality talent.

Exactly.

And, you know, we saw the same thing in 2008, 2009. It is— some of the best businesses around now were really forged in crisis over that period, you know, and a lot of that was driven by recombining really high-quality people. So I'd think about things in that positive light as much as anything else.

And I think that's really sound advice. I think that, you know, again, I like the way you're saying it is like looking at the silver lining to this, and I think we need to. And it's true that, you know, when we take away all the traveling and all the just commutes that we have to do and the fatigue, the extra fatigue that that brings on us, we just, we can have to say that we do have more focus, that we have more time. And as you say, this is the time, it's better now than ever to go out there looking for it. And Leslie, just, I wanted to share what she said. She said it was very reassuring to hear that deals are being closed. She says you're a great speaker, so great insights. So there you go from Leslie. Verity was also saying that, you know, the insights were very helpful. And we do have a question from Duangtip Champrang. So I'm sorry, Duangtip, if I'm saying your name wrong. So they would like to know, what's the current appetite of investors right now versus in the next 6 months when it comes to VC? So what's your— gosh, we're asking you to have a crystal ball, aren't we?

Yeah, I mean, fair enough. That is a question I'm also asking myself in terms of, you know— well, actually, this is a good moment to come back to, and maybe I'll come back to this after I've answered your question, but around the finance supply chain, as it were, for VCs and what our relationship is with like with our underlying LPs. But to answer your question, I don't know is as much as I can tell you right now. My sense is that if there is not a second peak, that the markets will continue to settle in the range of outcomes. So much of this is about narrowing the possible range of outcomes, right?

Right.

And people do not like uncertainty. They don't like investing under uncertainty. So the more information we have weekly about this first the kind of progress of the first peak, the more comfortable we will feel making decisions. If we assume that there might be a second peak, that range of outcomes then increases again. And the second peak, if there is one, will likely be on a 4 to 6 month basis, in which case we're going to have more market tremors. So the honest answer is I don't know. But I would work on the assumption that the world may not look hugely different in 6 months assuming there's a second peak, than it looks now, so we might as well all get on with it. This is honestly the best advice I can give.

Do you hear that, listeners? You might as well get on with it. I love it. I love it.

So Claire—

sorry, go on. You wanted to say something. Go ahead.

Yeah, I was just going to come back to this point about the LP relationship.

So remind people what an LP is for those early-stage founders who may not know that term yet.

I was going to, yep. Yeah, so LPs are limited partners, and they are the investors in the funds. So they're the underlying pension funds, or asset managers, or individuals who put capital into, or committed capital to, a venture fund. Now, I think there is a general, often a misconception, that when we say that we're a venture fund, that we have that capital sitting in an account somewhere. and that we can just deploy at will. Now, I mean, in some ways we are deploying at will, because those LPs essentially make a promise to meet our capital requirements over time.

Mm.

Every time we make a new investment, we have to go out to LPs and make what we call a capital call, in which we share brief details of the investment, but they are expected to commit. It is not a kind of deal-by-deal approval process, it's just that they hold on to their cash until we call it. Now, in this kind of an environment, there's been a lot of chat about underlying LPs in venture funds refusing to meet capital calls or asking venture funds to delay the pace of investment because, for various reasons, they may find themselves facing some liquidity constraints on their end, some cash constraints, meaning they're less likely or they'd rather not put as much cash to work over this period. That is not what we have seen with our limited And I think that is not what many of our— most of our VC competitors and others in the ecosystem have seen. But that is always something to bear in mind when you think about how the venture ecosystem works. It's not as simple as, in this environment in particular, VC deciding to commit capital and there it is. There is another process happening on the back end.

Which I think is always very helpful to remind founders that, you know, you guys are professionally managing other people's money, and therefore you have to deliver returns, and you have to, as you say, manage the outcomes and the risk, and therefore you want to de-risk your investments as much as possible by starting early, you know, following up, building those relationships over time. So it's, you know, it is a process that you can't skip any of those stages, and I think that's why it's so Thank you for sharing and reminding us about the capital calls, because I think there is this myth that, you know, in the funds basically you have this big pot of gold, like what's the name of that in the Harry Potter movies, you know, when they go to the bank? What do they call the bank? I can't remember.

Gringotts.

Gringotts Bank, there you go. So like VCs with the Gringotts Bank and you just go in and say, I want to take all my pile of coins, thank you very much. So it's good to clarify that. I can tell you're a true Harry Potter fan. You got that very fast. So we have a few questions coming in. Verity would like to know, is there any data around if investors are more likely to invest in a single founder or a small team of co-founders?

Good question, Verity. It is not data that I have seen. I'm trying to think of data around the investments that we've made over the last 12 months. I don't think that— our discussion doesn't usually hinge on whether or not there is a single founder or a co-founder so much as it rests on whether we feel the founder has attracted talent and a team around them that is able to help them execute. So that could be a co-founder, or that could be a CTO, or someone else on the product side, if the founder themselves isn't product-driven. So it's not so much about the status of the founders as it is the quality of the team generally.

And I think that that would be the common way of looking at things, although there are some funds who very clearly say, we don't want any single founders. We just don't want to, because it's too risky if the founder gets sick, Or whatever. I mean, you know, we're just not into it. But I think it's very reassuring to hear from you that, you know, you really are looking at the quality of the founder and the team and all of them working together, you know, and see how that goes.

Yeah.

Lesley wants to know, what's your view of investment in consumer-facing B2C— sorry, yeah, BC2 or B2C, I think she means fintech. So Your view of investment in consumer-facing fintech, given the impact on consumerism generally and the difficulty in estimating consumer behaviour now?

It's a really good question. I spend a lot of my time on fintech, partly by virtue of having started my career in the financial institutions group, but also just the nature of the European ecosystem. Obviously, fintech is such a significant part of it. Look, I think it will vary by sector within fintech. You know, we're in Revolut, the business is doing incredibly well and continues to do well in this environment. We're also in several other payments-driven businesses that are doing fantastically well. You know, it stands to reason that those bits of fintech that are more— even more procyclical, for instance consumer debt-driven, may be having a bit of a harder time. But still, you know, the demand for debt doesn't go away. It's just, it's a very pro-cyclical space. So, you know, you do— we are seeing quite a lot of volatility and variation by subsector. Again, though, you look at insurance, for instance, this should be a really good time for people to be disrupting incumbents. You know, I think that one of the most important things to remember in fintech is that this kind of environment, a lot of the traditional incumbents that have much higher cost bases have to pull back for various reasons, and so there should be a really good opportunity for new players to pick up— pick off different parts of the business that may be riskier, where, as I said, the larger incumbents have to pull back, often for regulatory reasons. And so it can be a hugely dynamic environment for larger fintech players— or sorry, for new fintech players versus larger incumbents.

Plus the larger companies, some of them are having to lay off staff. I mean, it's terrible. We see the waves and that, you know, the bigger you are and the faster you've grown, maybe the faster you have to prune in these very tough times. And so therefore there is another opportunity to nab some of that top talent.

For sure, for sure. I think that the question on consumerism generally is also one that I regularly mull over at the moment because On the one hand, you've got the first-order effects of, you know, literally people cannot spend as much as they would like to be spending, particularly leisure and travel, etc. But secondly, the second-order effect, of course, is that there are very real material layoffs happening right now that will not simply bounce back when the market comes back. And at the same time, so you see some sectors very significantly hit by the second-order effects. While at the same time, we know that there's going to be a reallocation towards consumer sectors. We've already seen it, be it social, gaming, you name it, and this kind of rapid acceleration to online shopping included, that are really going to benefit from this environment. So it's a bit— so much of this, if you're a consumer founder, is— and we do have longer discussions about this at the moment with the founders we're speaking to on the B2C side— You know, how do you think about the first and second order effects? Which of those do you stand to benefit from? Which of those could hurt you? And so it's not a question of, you know, give us the number that you think you'll get to by the end of the year or next, because that's quite hard to predict. But have you really thought about the first and second order effects in this space?

I really like that way of thinking, and I think that's very helpful for everybody to hear, because, you know, that's the way investors are thinking, guys. You know, we need to see— it's all about mitigating the risk, which you're doing anyway as a founder, and you want to be saying, okay, where are the next leads and the next, you know, clients and customers going to come from, and what are the threats to my business? That's something you're all doing, but I just think it's very helpful to hear it live from Laura. We had a question from Folake who wanted to know if you knew anything about the investment climate for early-stage startups in sub-Saharan Africa. Now, I know it's further afield, but just wondering, had you any inclinations or knowledge on that, Laura?

Do you know, I don't, and I wish we did, because I think it's going to be such an exciting time across kind of West Africa, East Africa, really just so much of sub-Saharan Africa is taking off. And I have— I've looked at businesses before in Nigeria and in fact in Ghana as well. Annoyingly, I have to say annoyingly, it's not part of our current remit, but I think it's There's just so much exciting stuff happening there at the moment. So I don't have much visibility into it at the moment, I'm afraid, but I wish I did, put it that way.

Well, it's good to hear that. I mean, I think we all know that Africa is the biggest growth continent. It's the future. I mean, it really, really is. So it's exciting to hear. And I suppose what general or generic advice could you give to them with regard to just Reaching out, probably if they're early stage, reaching out to business angels or their networks in Africa. What kind of key tips would you give to a founder there?

Sure. Well, I think the first thing to do is to map the ecosystem. I do say that to early-stage founders generally. You've got to map the ecosystem of the total addressable market, as it were, for venture investors. And what I always say to people not to do is don't just kind of do a quick Google and pick off the top 10 people that you find, or the first 10 people that you find. You really want to get an understanding of the total addressable market, so who's doing what, and really correlate that with what kind of investments have they made before.

Yep.

How much value-add can they bring? And that exercise does take some time, but it really is worth its weight in gold. Because the other thing to think about is, let's assume that you manage to whittle that addressable market down into the top 10 investors you'd really like to have on board or be involved. You really don't want to start with the top 10 investors. You want to give yourself the practice and the run-in with those other funds that, you know, and you never know, you might build a great relationship with some of them and it turns out that they are the right funds for you. But you want to give yourself a long run-in and practice before you speak to the kind of the top investors necessarily.

Great advice. It's one of the things that I share as well in our top funding tips as well. So definitely listen to Laura, please, because she's telling the truth. She's telling us straight from the horse's mouth, in the positive sense of the word.

Yeah.

Rasika has a question. Considering the limitation of travel due to COVID crisis, what are your thoughts about healthcare education and training in Based on simulation?

Yeah, look, I think it's such an interesting space. And, you know, I spend a lot of my time on health tech, given my background. And we were an investor in a business that actually helped with simulations for surgical training. I think this is a space that is going to absolutely kill it, so to speak, in the next couple of years and longer. You know, health Care generally has been an underinvested space from a VC perspective. And frankly, for a reason. It's traditionally an industry that is facing customers, often hospitals, with very long sales cycles, very slow decision-making processes, surprisingly limited tech or internet penetration, kind of general day-to-day processes.

Yeah.

And so right now, I think we're really— this environment is just going to accelerate, frankly, what should have been happening for years. And we're seeing that in the UK, we're seeing it across Europe and indeed the US. So I think it's a very exciting space.

We're going to shake the dinosaurs.

Yeah, exactly.

And I do think it's a very exciting space, and again, about bloody time, excuse the French. It really is. I mean, it's something that we— I think this crisis is really showing up our lack of investment in all the countries, in health in particular. So I think it's a good thing that we can switch on the access to that. Verity has a question and she wants to know, she's currently building her pitch deck and she wants her numbers to be as tight and accurate as possible, but her startup is a free B2C service that will create revenue through other streams such as advertising, donations, sponsorship, and licensing. Are there any resources you recommend to support me creating an accurate projection landscape?

Any resources I can think of? Well, first of all, maybe let's just talk through how I would approach doing this myself, and then maybe I can think of a couple of resources that would be helpful. The way you want to build your revenue projections is based on kind of reasonable assumption.

Mhm.

And so what that means is, you know, pricing, product pricing, client growth, and user metrics, right? And so, depending on the model, and it's hard to get a sense of, if you're talking about advertising, what are the underlying metrics that would drive your advertising revenue? And one thing to really think about here is, at the seed and the early stage, the very early stages, it's as important to understand that you've understood the metrics that are driving the business, as it is demonstrating a watertight revenue model.

Yeah.

The truth is, particularly in this environment, projections are going to be very tough to make. So what you want to demonstrate is that you understand, as I said, what the key drivers will be, and really disaggregate the key metrics, if that makes sense. So if it is the case that it's advertising, donations, sponsorship, you know, let's say it's sponsorship. When you're building your revenue projections, you should have some reasonable assumptions around level of sponsorship, number of clients, sponsorship for what, what are you charging, on what basis are you charging, etc. And similarly for the licensing. So you should be able to really disaggregate every one of those elements into its constituent parts. And in terms of useful resources, one thing I always suggest people do is if there are other larger businesses out there that have similar revenue models, then it's always helpful So go through their accounts, go through their decks if they're publicly listed, and understand how they report things and how they're communicating things.

Yes.

So that's just— it's just helpful to do that. You know, there is quite a lot of information out there that gives you a good idea of what best practices are. Again, you know, these are mostly for publicly listed businesses, so the read-across is obviously highly imperfect. But again, it should give you an idea of what the key metrics are and what intelligent investors want to see and understand.

Absolutely. I think that's fantastic advice for Verity. And I would also add that, you know, if you know who your— some, you know, key players are in your sector, Verity, you know, and if you can build some relationships with some other founders, ask them, say, how, you know, what are their key metrics and so on. Have a look at what they're doing. If you see them pitching at conferences and so on, or if you've watched online pitch and demo days, check what others are doing as well.

Yeah.

So see what are the current You know, always, this is a game. This, this I always talk about as the funding game, okay? There is a process and there is a performance. So part of that performance and process is that you just need to, you need to do your homework and you need to see, you know, what are the key things in your industry, your key metrics, and what do investors in that sector expect, and give it to them.

Yeah.

Do not be annoying Laura with the wrong stuff or going to her if you're not in her type of investment thesis. Okay, so that's super important, whether it's Laura or somebody else. We have— go ahead, Laura.

Just to add to that, and maybe this was— sorry if I've misunderstood the question, but to make sure I fully answered it, if you're talking about kind of templates for how to build a revenue model and a business model generally, then there are lots of resources available online. Canva is one of them and has lots. You know, there are lots of VCs who write a lot of new content and old content about best practices to do that. So, you know, make sure you Google that online and check some of those resources as well.

Absolutely. And I would say on our Global Investor website, if you go on to click on Academy, and you'll see we have a whole page of resources. We have a must-read section with a list of the key blogs by male and female investors. So we've kind of done that pre-selection for you, so you can have a look there as well. Guys, um, and, uh, Christine was also talking about Canva saying that they had some great, great templates. You were completely aligned on that one, Laura. That was wonderful. Um, Tatiana wants to know, do you think it's harder to raise VC funding for female founders, and what would you recommend female CEOs to do when they're looking for funding? I love this question, Tatiana. You're talking to my heart.

Look, the numbers speak for themselves. I don't want it to be true, but it is unfortunately clear in the numbers that for reasons that, frankly, I think elude us all, there is a dearth of— or there is less funding available for female founders. Now, what I've seen happen in the ecosystem over the last 18 months is a huge change or kind of continued progression to address that. There is not enough being done. We need to do a lot more. So I think the reality of it is, is that it just practically is true that it is harder, appears to be harder. Now, so what I don't want to do, however, is put the onus on female founders.

Exactly.

To fix or behave in a way that is different to what they would be doing. I don't think that's the right solution. So, you know, I often hear people discuss give advice like, you know, be more confident or be X, Y, and Z. I don't subscribe to that. I work very closely with lots of female founders who do a just fine job, just as good as anyone else, presenting themselves, but they're not being given the right opportunities.

Yes.

So, you know, I think just seek out those people who speak on this topic. I'm one of them. There are lots of other people, but I don't think there's anything, candidly, that you should be doing differently. I think the advice for you is just as much the same as I would give a male founder, which is make sure you've got your story straight. Understand that a lot of this is about you as much as anyone else. Don't be afraid to sell yourself hard and back yourself. If you're doing this, there's a reason that you thought you could execute on it. And so much of this is just about telling the right story and having the right belief, you know, in yourself about execution. So my advice is the same, by the way.

And I think it's really heartening to hear. I mean, the fact is, at the moment— what did they say last year? It was 2.8% of all venture capital went to female-only-led startups, and 18% to the mixed. I mean, it's a long way to go. And I remember actually going to VentureCrush dinner organised by Ed Zimmerman in Paris a couple of years ago where Rob Moffatt was there.

And he was—

so Rob is one of the key partners at Balderton, so, and Laura's colleague. And he was sitting opposite me, and of course I asked him, so what are you doing for female founders? And he was like kind of perplexed at that time, and that was a few years ago. And he was like, you know, really, is there an issue? And I told him what you've just said and explained that yes, there is, and we do not have the same opportunities. That's what we're talking about. So I'm just curious, what What would you say you've been doing at Balderton to kind of help female founders? And I know you're very active on this front, Laura, so please do share what you guys are doing.

Sure. So I think we kicked off a project over a year and a half ago. Now, when I joined, I was keen to do a lot more about this, and I know that everyone at Balderton is and recognizes that the whole ecosystem has to do more. Anyway, the way we've broken it out Is that there are kind of 3 different things that we need to think about. One is getting our own house in order. You know, what are our internal practices? What are we doing internally to support diversity of opinion and, you know, the team? So that's kind of one. 2, how do we think about our kind of external pipeline and our external network?

Yep.

I think that, you know, we've been doing a lot more around how should we be tracking the pipeline and indeed tracking the pipeline. to make sure that we're holding ourselves accountable to the right level of diversity in the pipeline that reflects the quality and gender balance that we have, that we should do. And that includes things like doing unconscious bias training and all that good stuff, and working increasingly with organisations that are working with kind of BAME and And diverse founders. So we spend a lot of time on that. And the third thing that we're really keen to do, and I feel very strongly about, is supporting the ecosystem and supporting the discussion and making space for the discussion. And what that means in practice is doing a lot of events where we highlight key topics that are really critical and kind of raise the profile of issues for a broader swathe of founders. That includes things like an event we did last year called Being a Founder and a Parent, the honest truth from several of our leading founders now from within and outside the portfolio. And that was a great event because we had 2 male CEOs talking about how they worked when their wives, you know, or partners had children, as well as female founders who were talking about the balance of work and division of labour in their households and how they'd managed that themselves and how they try to inspire instill the right culture within their firms for being a parent also. And I think so, you know, we're moving forward on all 3 fronts, and that's the way we've been thinking about it.

And I think that's fantastic to hear, and thank you, thank you so much, Laura. Thank you to Rob and to everybody at the Balderton team, because you are leading the way in this, and you take it seriously, you walk the talk. And I mean, just you being on this live podcast with us today is testament to that and to your own personal commitment to as to how important this topic is to get the message out and to help as many founders from diverse backgrounds as possible, which, as you can tell from the people who've signed up, we are very diverse in our audience.

Yes.

So we have another question here from Jyotha. So Jyotha wants to know, she says, we are a virtual transformation— we're in a virtual transformation of shopping. We bring together sustainable fashion brands with consumers in an innovative gamified experience. Because of the existence of games element, I found that commercial angels are very skeptical because they don't know about games, which is a niche sector, and at the same time, the gaming-oriented funds do not look to the commercial side of casual games. So how would you tackle this issue, and which type of angels' funds would you look at? And she says being a female founder adds up to the difficulties.

So yeah, it's interesting because there are lots of different strands to that narrative to the story, aren't there?

Hmm.

So what would I do? I think you have to decide what— which element here is the most important one in the story. Is it that it's, you know, you're really pushing on the sustainability point? In which case, the fact that it's a gamified experience is, you know, part of a great way to boost engagement, but the central thrust of the story is sustainable fashion.

Mm-hmm.

Or is it the fact that you're kind of thinking about a new way of driving engagement? And, you know, yes, it's sustainable fashion in e-commerce, but is it just e-commerce generally with, you know, something really differentiated about the gaming element? And depending on which of those you think is more important, you know, you've got to— you've just basically got to tighten up the story and then target those angels or early seed funds who are really who get it. And I think what is true is that sustainability and gaming tend to be 2 areas of focus for a very different group of people. That being said, there are generalist early-stage funds like ourselves and others that get both.

Hmm.

But I think just even in the way you described it, I think you need to get a sense of which of those bits of the story is the leading one. But I do understand there's a tension. It's difficult when you're pitching to angels who may have expertise in one or the other. But again, I would just tailor your pitch.

And I think that's really sound advice, and I would also add to that, like, that sometimes you can be surprised. Reshma Shetty, she's the co-founder of Ginkgo Bioworks, which is a company that makes living organisms, you know, and now they're at the forefront of doing research for COVID-19. And she was one of the— she was the very first biotech startup in Y Combinator, in the Y Combinator accelerator a few years ago. And I interviewed her a few years ago for my HuffPost series, and she's our day 6 of our funding tips. So go back and check her, check her out, her, her interview. Why do I mention her is because at the beginning when they started talking to— they were looking to talk to biotech funders, and they just didn't really get— because they were so specialized in what they were doing, and there's such a new niche, like Creating new living organisms. It was not a current thing. It was very cool. And what she found is they avoided going to the tech funds, you know, because they said, oh, they won't get this.

Right.

And actually, it turned out to be the other way. That was more— some of the tech funds maybe had a bigger appetite for that kind of coolness and so on. And so she did find some funders there. So I like the way you're saying, you know, pick a track and Test that one, and then if you choose the other track, adapt to that one too. And I think that's very good advice. It's in, in any case, it's like it's adapting the story to the audience. That's what you're saying, and that's really key, basically what we're saying here. Great question from Jota. Okay, so we're coming towards the end of our podcast, so I want to start asking you, let's drill down into some of the key dos and don'ts for our female founders for fundraising, In this climate? Let's kind of wrap up what we've been saying so far. So, key dos or don'ts, whichever you prefer.

Oh, sorry, you just broke up there.

Sorry. So I was just saying, oh, you know, everybody loves your answers, Laura. Again, Yota's just saying great answer, great answer. Everybody's like, you know, Leslie as well. So well done. And I love that it's live, you can get the live feedback too. My question was, what would be, if we had to recap If you were to wrap up your advice to female founders fundraising in this climate, what would be the key dos and don'ts?

Sure, so key dos: don't self-select out of the process because you think it's going to be hard. It's going to be hard anyway, and there's no assurances that in 6 months' time it will be easier. The thing that you do know is that relationships will take slightly longer to get built, and rapport takes longer in this environment, so get on and do it and start Start having those conversations. The second thing is, do not start talking to the best investors first.

Yeah.

Map the market out, have your kind of hit list of top 10 investors that you really like on board, be they angels or seed funds, and start in reverse order so that you give yourself a really good run-in, and by the time you get to your top investors, you know, you've got the pitch down to a T. Third piece of advice, when you're thinking about putting your business plan together, It is as much about understanding the key drivers and what the relevant metrics are to assess performance as it is putting numbers around that. So you really need to spend time understanding what they are. And I guess fourthly, key dos, in this environment, it's very hard to predict what consumer behavior is going to look like, frankly, what enterprise behavior is necessarily going to look like.

Mm-hmm.

Try to break it out into first and second order effects. And, you know, as we discussed, and I guess don't be discouraged by the fact that the figures today do make it look like it's a lot harder for female founders. There are lots of organisations and there's a lot of work going into making sure that those numbers change, and we need more of you coming into the, you know, engaging with us, coming into the pipeline.

And Global Aggressor is one of them.

Exactly, exactly. So please don't let that discourage you. Other don'ts: don't let someone tell you that you have to have a co-founder, because as Ekwueme said, you are likely enough. It is not about having a co-founder, it is about bringing other people into the team who can complement you. So I would also think about that. I think those are the main elements.

Fantastic. What do you think needs to change in this funding ecosystem moving forward, Laura?

Sorry, what do you think needs to change? Sorry, you're breaking up a tiny bit. In terms of just generally or specifically?

Generally.

Yeah, I mean, I think there's lots of things, but I think the main thing, if we just talk about diversity for a second, is that we need to make sure that in this environment where it is too easy to fall back on existing relationships— I talked a bit about it already— and people we know and to warm channels, what we don't want to have happen is us kind of go backwards when there's a lot of good work being done about supporting diverse founders. I think that That's something that everyone should be— needs to be very wary of as a venture fund and venture investor. And that's also true of government funds. There's been lots of debate about making sure that the funds allocated go to a diverse pool of highly talented founders. That has to be a KPI.

Mm-hmm.

So I think those are things that we have to be very wary of in this kind of an environment, where it is harder to reach out to cold— People— cold people— make cold intros, so to speak. So those are kind of some of the main elements about it. But I do think also, you know, I mean, it's not necessarily changing it, but making sure that as an investor, we kind of maintain conviction on the European tech ecosystem. It's a great time for us, just collectively. There are some absolutely fantastic founders coming out of the woodwork from all walks of life. I mean, it should be a really good opportunity to build some fantastic businesses with the amount of talent out there. So, you know, what we can't have is everyone pulling out of the market because it's— lots of people pulling out of the market because it's an uncertain time. So, you know, I hope that everyone keeps kind of forging ahead, because I, for one, am very excited about the next 12 months.

I love it. And what would be your favourite fundraising resources for founders? What kind of key resources would you point out?

Yeah, so there have been a couple. What I'm going to do actually is after this I'm going to post on my website about lots of the helpful resources I've seen, because I've been meaning to do that for a while, but there are lots of lists circulating at the moment about funds that are still active in this environment that have volunteered information about being active, so they've confirmed it themselves. So I would check those. You know, we spoke a little bit about CanVote, which is a great resource. I would check your website also, Anne, with details of blogs and where people are— top VCs are writing. You know, those are always— that content is always really helpful, particularly in sectors that are relevant to you. And that includes the Balderton website. You know, we're always publishing content, so make sure you check that out also.

And you also mentioned that you have office hours. Now, I think they've already gone for last month, so when would be the next office hours?

Yeah, so we're just going to release the date for office hours in the next week, hopefully, but we do it on a quarterly basis, so keep your eyes peeled for that. And if you sign up, if you go to the website and sign up to our newsletter, you'll get the update as to when we're opening applications.

Fantastic, and I'll put the link in the show notes to this podcast episode as well so that people can go straight to that part. So how can our listeners best connect with you, Laura? What are the best places for them to go and reach you and Follow you?

Sure, sure. So I'm on Twitter if you want to follow me there. I'm @LauraCornell18. In fact, I can type that here. I'm also— you can reach out to me on LinkedIn, you can reach out to me by email, it's on our website, so feel free to do that. And I always try to get back to everyone. Just bear with me because I am getting quite a lot of volume at the moment. So that's the other thing, if people don't get back to you by email, VCs keep chasing them. It's not because they won't ever answer, it's just there's a lot of inbound. So those are the main things, really.

So my last question to you is, how can we put more fun into funding, Laura? I love that question. So how can we put more fun into this whole process?

Yeah, I mean, I think, remember, this is— I think trying to maintain positivity about the mission and remembering that this is meant to be an opportunity to do something really different, to build something. It's really exciting. And, you know, it's very easy, particularly as you go through your initial meetings with investors, and you'll get some nos unnecessarily, you will, and it can be dispiriting, but everyone's been there, remember that. And just keep your eye on the prize. This should be a really exciting moment in your life if you decided to make the— to go after an interesting business proposal, the world usually does open up in some way to make that work for you. So just bear that in mind.

I love it. That's fantastic. So thank you so much, Laura, for being with us live. And for all our listeners who've been with us live, thank you very much for all your questions. You've been an awesome audience. And I love you. I just want to give you some of the feedback live. You can see it. So Laura, Julianne was saying that she really loves your plain-spoken and thoughtful openness with the audience, and she wants to hope to meet you in person soon. She's the VC in, in the States I'm talking about. Leslie says, amazing podcast. Thank you, Laura. What a badass. Thank you, Anne. Yes, you're a badass. Yes, she's a badass. Give her all your love there in the chat box, why don't you? This is the last few seconds. Thank you so much. I would say to everybody, Laura's Twitter— Christine, you wanted her Twitter, so it's Laura Connell.

Oh yeah.

Yeah, there you go, 18. Look at that, they're following up with you. Marie says, look at that, it's very positive, good session and everything. So that's fantastic. You could see all the goodness coming through, and even on the Q&A as well, great session, very clear and informative. It was very exciting. So listen, thank you so much, Laura, for your time today, and I will ping you to let you know when this is live so you can share across the networks. Thank you for everything you personally are doing.

Thank you.

To do everything here. And to, to Rob and to the whole Balderton team, we're lucky to have you in Europe and in this world. So thanks very much.

Thanks very much, Anne. And to you.

All right, thanks everybody. Take care.

Bye.

Thank you for listening to InvestHer Podcast. Don't miss more great funding tips and insights by subscribing to the podcast on Apple or your favorite podcast host. And while you're there, I'd love you to rate and review the show. We'd love to hear from you, so if you'd like to send in some questions, interact with our guests, or suggest other great people we should feature, join our community on the Flick InvestHer group. Or send us a message on investherpodcast.com. Want more great resources for female founders about funding? Check out our InvestHer Academy at academy.globalinvesther.com. I'm Anne Ravanona and look forward to having you with us Join us again for our next episode. Let's put the fun into funding and get more women entrepreneurs funded. Yay!