The inside scoop from Sydney’s top female VC investors
In part-two of our Women in Venture blog series, five of Sydney’s top female venture capitalists share their golden tips and red flags for startup founders seeking investors.
Photo by Olivana Smith-Lathouris
As part of the Festival of Future You, UTS Startups hosted a panel discussion moderated by Lauren Capelin, Head of Venture Community at Reinventure, and also included Georgie Turner, Principle at Tidal Ventures; Lucinda Hankin, Investment Associate at Grok Ventures; Hannah Yan Field, Investment Manager at Tempus Partners; and, Emily Close, Head of Venture Community and Business Development at Airtree Ventures.
The first of our Women in Venture blog posts focused on diversity in Australian venture capital firms and why a healthy startup ecosystem requires diversity in the people investing in them. Here in part-two, our panellists reveal what’s going through the mind of venture capital investors during pitches from startup founders, what investors are particularly looking for, and what raises alarm bells.
Top tips for founders
1. Hustle spirit
Lucinda Hankin argues the key indicator of a genuine founder and of a good investment, is someone whose passion for their startup shines bright.
“You have to really believe this person is doing this because it’s their sole passion in life,” she said.
2. Understanding the value of VC
Georgie Turner says she looks for founders who understand the value of venture capital and why it’s important for their particular startup.
“Not all founders have to take VC money and not all founders should, so I always look for founders who have really thought through why they’re taking this kind of capital and whether they know what to do with it once they’ve got it.”
And for startups trying to get their business off the ground, all money is good money, right? False.
Turner says that companies that don’t think they can go into a state of hyper-growth should not be considered venture capital.
“As soon as you take in venture, you set yourself on a course where you have to continue to take venture capital and continue to grow at the rate that your venture capital investors expect. You can often constrain yourself with what you want to do with the business and the product at that point.”
3. The superpower of storytelling
Emily says good storytellers who can convince people to join their companies are often the same people who can sell their vision to an investor.
“It’s incredible when founders can evangelise their vision,” she said.
“Good founders are wonderful sales people and they can tell their story to people and convince them to leave their high-paying corporate jobs to come work for them in the same way they raise capital.”
Something that UTS Startups strives to achieve through its community is creating a strong culture of support and it turns out, this is a key indicator of success for VCs looking for potential investments.
“We spend time in companies, in their office space, speaking to leavers, speaking to people who have just joined and really getting a sense of the culture.”
Hannah Yan Field looks for a startup who knows their problem space better than anyone.
“We look at founders who have worked in the problem space, who really understand it, who have suffered through the challenge first hand. They should know that space better than anybody and arguable know it better than us,” she said.
Red flags for VC investors
1. Money, money, money
Investment is important and so is creating a successful business, however Lucinda Hankin emphasised the difference between founders who are opportunistic and those that are building a company because it’s their primary passion in life.
Georgie Turner reinforced this point saying: “it’s not exciting to be in a long-term relationship with founders whose only motivation is to make a lot of money”.
2. Weak co-founder relationships
Hannah Yan Field said a big red flag is rocky founder relationships.
“If co-founding teams break up, that can be detrimental to a company and it’s been surprising meeting founders where there’s tension in the relationship so early on,” she said.
“That’s not a relationship that will go anywhere and not a company we’re interested in backing.”
She warned the audience that weaknesses in the relationship can often expose itself during interviews, meetings and in a lack of cohesive vision about what they’re trying to achieve.
“We look at how they interact, do they listen to each other and really hear each other out or are they competing for the spotlight and that says so much about a team and it’s a massive red flag,” she said.
The panellists were asked to provide their key piece of advice to anyone looking to go into venture capital.
Lucinda Hankin says remain genuine your personality, interests and goals. “There’s a lot to be said about authenticity, be authentic to who you are.”
Georgie Turner agreed, telling the audience to be introspective and instead of aspiring to be someone else, ask yourself ‘who am I?’ and let the answer guide your decisions.
Hannah Yan Field concluded by encouraging the audience to be flexible in their career journey and to embrace a wide range of entreprenerial skills and opportunities.
“Don’t optimise for a future point and if that future point is venture don’t craft and control your career path where you’re limiting out other amazing, fulfilling career opportunities for the sake of getting to the end point.”
If you want more tips and tricks to succeed in the world of startups, keep up to date with all our news and upcoming events by signing up to our newsletter.