My first 5 months working in VC
In May this year, I was presented with an exciting opportunity to work in Venture Capital (VC). I had little experience wearing an investing hat but had experience running marketing initiatives in a successful startup. 5 months later here I am, working at Icehouse Ventures and managing ArcAngels, New Zealand’s first and only angel network focused on backing female founders.
The last 5 months have been invigorating and stimulating. Everyday I learn something new and meet with intelligent and ambitious people. I’m grateful and humbled to be working in this industry. So what did I learn in my first 5 months working in VC? Here are my 3 key takeaways:
1. New Zealand is full of incredible talent
Aotearoa is full of amazing talent. I’m in a wonderful position to meet all kinds of founders with ideas ready to change the world. These talented people and ideas range from a 20-year old offering AI solutions for diagnosing heart disease, to technology which enables people to herd cows remotely, to wireless phone charging or our very own space exploration companies.
A recent startup we invested in is Chnnl — a mental health app for employees. Dr Liz Berryman (CEO & Founder) experienced bullying in her own workplace and decided to do something about it. I admire each and every founder for taking the courageous step into entreprenuership. The New Zealand startup ecosystem is bursting with new and exciting game-changing ideas - and I’ve been thrilled to immerse myself in this space.
2. Female founders face challenges when raising capital
Among this amazing kiwi talent, there is an unfortunate underrepresentation of females. My role is to lead ArcAngels, an angel network and fund that invests exclusively in female-led startups. So why does ArcAngels exist and why is my role necessary?
Shockingly, only 18% of angel investment went to New Zealand female ventures in 2018 (AANZ Survey 2018). It’s even worse overseas. In the US, only 3% of VC funding went to female-led companies last year. One key driver of these statistics is the unconscious bias that exists against women pitching startup ideas. Women are often held to higher standards than their male counterparts. The types of questions asked are more often posed as detracting vs promotional, and investors are often viewed as having less potential without proof.
ArcAngels’ mission is to do our part to reduce these gender based challenges that females face when raising capital. We wish to provide our wahine leaders with the support they need to reach essential milestones, build their platforms and overall feel empowered.
3. The importance of learning fast and being resilient
This leads nicely into my third takeaway. In my first week, I was given the role of raising the ArcAngels fund which has plans to invest into 20 female-led startups. The goal was $2m and today the fund is oversubscribed at $2.5m. Knowing little about fundraising in the VC space, I thought to myself — where do I start?
I have so much appreciation for my colleagues who taught me how to pitch the fund and circumvent tricky questions an investor might ask. They helped me gain confidence and fortitude. My first pitch to an investor was at a cafe on Teed St in Newmarket. I talked about the benefits of the fund for his portfolio and how it economically makes sense to invest in females, not just from an emotional view (studies show women are 35% more capital efficient). This investor was lovely, but he didn’t quite agree with the investment thesis. That was okay, I learned that not everyone was going to say yes.
What I can tell you is that many of the investors loved everything about the fund and all it stood for. Some were first-time investors and others were serial angel investors with years of experience. It didn’t matter though because they had one thing in common — they believed in the fund’s purpose and the impact it would have on female entreprenuers. Between our investor’s shared vision and learning quickly from my incredible team, together we were able to exceed the goal. The fund very quickly became my passion project. Not everyone gave me a “yes”, but the ones that did decided to write a cheque. Those cheques quickly added up to the $2.5m fund that will support female startups in New Zealand.
Overall, I’m incredibly excited for the future of the New Zealand startup ecosystem. The talented founders (both male and female), the angel investors, our portfolio companies, my supportive team and so forth have all instilled a deep passion and fascination with what’s possible.
Lauren Fong
