EUVC Newsletter | 28.6.2024
Welcome to our community-sourced newsletter featuring the latest submissions to the eu.vc insights platform — the platform that collects & amplifies the best long-form pieces from the EUVC community.
This week, we feature submissions from Seedcamp, Notion Capital, Reference Capital, Nucleus, BACKED, Underline, and many more legendary European firms.
Click here to submit your own articles, events or projects 📥
Co-Founder Feuds, Arguments, and Disputes > Getting to an outcome.
by Carlos Eduardo Espinal, Managing Partner at Seedcamp.
Why it matters: Co-founder disputes are a common and often disruptive issue for startups. For VCs and LPs, understanding how to navigate and resolve these conflicts can ensure the stability and growth of their investments. Effective resolution prevents loss of productivity and maintains company morale, ultimately protecting the value of the startup.
What it is: This blog post provides strategies to rescue a co-founding relationship rather than dissolving it. Key points include avoiding blame, careful involvement of third parties, managing egos, recognizing strengths through conflict, and realigning around common goals. The post also emphasizes the importance of regular, open communication and setting clear decision-making structures from the outset.
Scratching the surface: uncovering geothermal energy's potential
by Hélène van Berchem, General Partner at Reference Capital
Why it matters: Geothermal energy is a largely untapped resource with massive potential to contribute to net-zero emissions. As the demand for electricity grows, geothermal offers a stable and weather-independent power source. For VCs and LPs, this sector presents a significant investment opportunity, especially given its potential to outperform oil and gas reserves by over 50,000 times.
What it is: Geothermal energy utilizes the Earth's internal heat to generate electricity and provide heating. Despite its benefits, widespread adoption faces challenges like high upfront costs, technical difficulties, and regulatory delays. However, advancements in technology and increased governmental support could unlock this energy source's full potential, making it a key player in the renewable energy market by 2050.
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What Ochre Bio’s Latest Partnership Illustrates About Biotech’s Business Model Evolution
by Alex Brunicki, co-founder and partner at BACKED VC.
Why it matters: 🌍 Ochre Bio’s $37.5M partnership with GSK marks a shift in biotech business models, leveraging data and AI-driven platforms. These deals, focusing on data licences and platform agreements, offer higher margins and lower risks compared to traditional asset-centred partnerships.
What it is: 🚀 Ochre Bio’s recent partnerships with GSK and Boehringer Ingelheim highlight a new era where biotech companies can generate revenue through data-driven collaborations, reducing reliance on dilutive equity funding and enabling a more independent growth path.
Rising Tides: Why Water Tech Should Be Top of Mind Among VCs
by Dr. Isabella Fandrych, General Partner at Nucleus Capital
Why it matters: Climate change is turning water scarcity into a billion-person problem, hitting industries hard. 🌍
With 1.1 billion lacking clean water and half the world heading towards water stress by 2025, it's crisis time. 🚰
Freshwater demand is skyrocketing while climate change shrinks supply – time for radical innovation! 🚀
What it is: Nucleus Capital's report highlights mission-driven startups tackling water woes through transparency, recycling, and efficiency. 💡
Key focus areas: monitoring water usage, treating and recycling wastewater, and valorizing waste streams for valuable materials. ♻️
Companies to watch: Pipe Predict, Constellr, Nala, Concert Bio, Rhizocore, Hydraloop, Matter, Aquature, Shit2Power, Green Hydrogen Technologies. 🌐
The best investor databases and lists on the internet
by Chris Tottman, Founding General Partner at Notion Capital
Why it matters: 🌍 Finding the right investors is crucial for startups at any stage. Whether you're at pre-seed or looking for industry-specific VCs, having access to comprehensive databases and lists can streamline your search and increase your chances of securing funding. These curated resources help entrepreneurs connect with the most relevant investors, tailored to their needs and geography. 💸
What it is: 🗂️ Chris Tottman shares a treasure trove of investor databases, categorized by stage, location, and industry. These lists include VCs & Angel investors by Stage, Location, and Industry. These resources can significantly aid in identifying the right investment partners, making the fundraising process more efficient and targeted. 🎯
The ideal founder’s background
by Luis Llorens Gonzales, Principal at Plug & Play Tech Center.
Why it matters: Understanding the ideal founder’s background is crucial for VCs and LPs to spot potential high-performers. Traits like resilience, flexibility, conviction, and ambition are consistent indicators of success. These qualities help founders navigate challenges, pivot when necessary, and build trust with stakeholders, all of which are vital for startup longevity and growth.
What it is: Successful entrepreneurs often have a mix of deep industry expertise and essential personality traits. Founders who are adaptable, committed, and have a clear vision tend to perform better. While industry experience helps in reducing risks, young founders with strong teams also succeed. Interestingly, studies show that the average age of successful tech founders is around 40-45, though many outliers are younger. Gender disparity remains an issue, with a significant gap in the number of female founders and their access to VC funding.
Carbon cost of compute: AI's energy consumption
by Estia Ryan, Principal & Head of Research at Eka Ventures, and Arthur Bessieres, Ventures Lead for France at Plug and Play Tech Center.
Why it matters: 🌍 AI is a double-edged sword: it’s driving productivity and helping tackle climate change, yet its energy consumption is spiraling. In 2022, data centers, cryptocurrencies, and AI used 2% of global energy (460 TWh), potentially hitting 8% by 2026 (1,050 TWh). VCs and LPs need to balance investing in AI advancements with their hefty carbon footprints. 🌱
What it is: 🚀 Generative AI boosts worker productivity by 40% and offers solutions for climate and health challenges. But it guzzles energy—predicted to exceed Portugal's total electricity use by 2027. Innovations in green compute, like high-efficiency cooling, quantum computing, and sustainable chip design, aim to curb this. Regulatory efforts in Europe, the US, and China push for greener data centers. 🌐
Why and how the European Investment Fund backs impact VC, interview w. Anna Finizio (EIF)
by August Soliv, Consultant at Monitor Deloitte & Author of Impact Supporters
Why it matters: 🌱 The European Investment Fund (EIF) plays a pivotal role in driving impact VC across Europe. By backing funds that focus on social and environmental issues, the EIF helps fill critical market gaps and mobilizes significant capital to tackle pressing global challenges. Understanding the EIF's criteria and strategy can guide emerging impact funds in aligning their missions with potential funding opportunities. 🌍
What it is: 🗂️ August Soliv interviews Anna Finizio, an Investment Manager at the EIF, to uncover the EIF's approach to supporting impact VCs. Key points include:
Screening Criteria: Team skills, clear strategy, track record, impact vision, and independent governance are crucial.
Top Performers: Successful impact funds are thesis-driven, have a clear strategy, and a robust impact framework.
Impact Methodology: Funds set impact KPIs, and carry interest is linked to these KPIs, promoting accountability.
Financing Gaps: EIF focuses on underserved EU countries, diversity-driven social funds, and those addressing specific social challenges.
Mobilizing Capital: EIF's efforts in 2023 mobilized €134.6bn, highlighting the need for transparency and new definitions of value in impact investing. 💡
The obstacle of sales is the way to progress
by Bogdan Iordache, solo GP at Underline Ventures
Why it matters: 🐾 Sales aren’t just a hurdle for founders; they’re the proving ground for product-market fit and scaling. Digitail’s journey from DIY sales to an $11M Series A led by Atomico highlights the crucial role of founder-led sales in understanding client needs, securing early adopters, and iterating on the product. For VCs and LPs, this underscores the importance of backing founders who can sell their vision and adapt to market feedback. 🚀
What it is: 🌟 Digitail, a cloud veterinary software, has grown to serve 750 clinics worldwide by reducing admin work by 40-60%. Initially, co-founder Sebastian Gabor learned sales through trial and error, focusing on customer needs and iterating based on feedback. By engaging directly with clients and understanding their pain points, he built a product that resonated with the market, eventually expanding from Romania to the US and securing high-profile clients. 🐶
Cyber security predictions for 2024: what SMBs need to know
by Farid Singh, General Partner at Startup Wise Guys Cybersecurity Fund
Why it matters: 📈 SMBs, buckle up: cybercrime costs are set to skyrocket by 15% to $10.5 trillion. You’re prime targets for cybercriminals due to limited resources and expertise. Ignoring cybersecurity is no longer an option – it’s a must for survival in 2024. 💻
What it is: 🚨 Ransomware attacks will rise, with SMBs facing sophisticated threats like double extortion and cloud data encryption. Cloud security becomes crucial as 63% of SMB workloads move online. AI will be both a boon and a bane, aiding cybersecurity while also powering more realistic phishing and advanced malware. 🕵️♂️
Returns and Sustainability Go Hand in Hand
by Patricia Borlovan, Content Writer at EUVC based on report by European Women in VC
Why it matters: 🌍 VCs are getting woke for good – and it's paying off. With 1/3 of €53B raised by European tech in 2023 funneled into impact startups, the VC world is vibing with sustainability. 💚 Plus, they're betting that more diversity = more $$$, so the ecosystem is in for a major glow-up. ✨
What it is: 📊 The report, based on insights from 300+ European VC Partners and LPs, shows a booming interest in impact investing. Key stats:
1/3 of €53B in 2023 went to positive impact startups.
87% have or will adopt ESG policies.
50% prioritize ESG in the next year.
The Nordics are smashing it with 61% of their VC investments in impact startups. It's clear: VCs are doubling down on doing good and making bank. 💸
Greencode Venture´s first annual Impact Report is out!
by Karin Henriksson, Venture Partner at Greencode Ventures.
Why it matters: Greencode Ventures' report underscores the critical role of sustainable investments in driving economic growth and addressing climate challenges. For VCs and LPs, it highlights the importance of integrating ESG criteria in investment decisions. This approach not only fosters sustainable development but also showcases the economic viability of green technologies, potentially leading to more lucrative and impactful investment opportunities.
What it is: The report details Greencode's commitment to the green transition, focusing on digital-first solutions for rapid change. Key sections include an overview of their ESG approach, impact results, and sustainability performance. Notably, the fund, classified under SFDR Article 9, achieved a net impact of +45% across society, knowledge, health, and environment categories in 2023. This demonstrates the substantial positive influence of their portfolio companies on green economies and societies.
Lorenzo Franzi on putting Italy on the map with Italian Founders Fund
by Lorenzo Franzi, Founding Partner at Italian Founders Fund & Robin Haak, Founder and solo GP at Robin Capital
Why it matters: 🌍 Italy's startup ecosystem is emerging from the shadows of its more mature European counterparts. With legacy firms dominating and digital ventures being scarce, the Italian Founders Fund (IFF) aims to bridge this gap. VCs and LPs, take note: Italy 1.0 is here, bringing untapped opportunities and a fresh wave of innovation. 🍝
What it is: 🚀 IFF has raised €50 million to invest in 25 Italian startups, supported by over 100 venture founders. Lorenzo Franzi, with a background in Zipjet and Rocket Internet, leads the charge. By focusing on pre-seed and seed stages, IFF aims to nurture Italy's tech talent and drive the country's venture capital scene forward. From B2B SaaS to AI-driven models, the fund is poised to transform Italy into a tech powerhouse. 🇮🇹
The differentiation for GPs nobody talks about
by Benedikt Langer, General Manager at The Sutton Firm & Author of Embracing Emergence
Why it matters: 🔍 As the market for Emerging Managers becomes crowded, GPs must find unique ways to stand out. Traditional pitches with similar slides and strategies often blur together, making it difficult for Limited Partners (LPs) to distinguish one from another. The real differentiator? The language you use to describe your fund and strategy. This approach can create a lasting impression, setting you apart from the competition. 💡
What it is: 🗣️ Language consistency is a powerful yet underutilized tool for Emerging Managers. By crafting a unique, consistent linguistic style around your fund, you can spark the imagination of LPs. This involves detailed and engaging narratives about your investment focus, personal stories, market perspectives, and founder traits. GPs who master this can make a more memorable and compelling case than any pitch deck. 📚
Alt Goes Mainstream Podcast with Ritholtz Wealth Management's Michael Batnick - Real Talk on Private Markets
by Michael Sidgmore, co-founder & Partner at Broadhaven Ventures
Why it matters: 🎙️ Michael Batnick, Managing Partner at Ritholtz Wealth Management, offers a wealth manager’s perspective on the often mystifying world of private markets. As alternative investments grow in popularity, understanding their integration into traditional wealth management is crucial. Batnick’s insights illuminate why alts are still a tough sell for many advisors, emphasizing the need for education and thoughtful strategy. 📈
What it is: 🌐 The podcast episode covers Batnick's unconventional journey into wealth management and his partnership with Josh Brown. Key points include:
The importance of education and content in building a wealth management brand.
The hesitancy of advisors to adopt alternative products, often due to workflow and operational challenges.
The difference in risk perception between public and private markets.
The evolving landscape of wealth management, where staying grounded in fundamentals and long-term investing is key. 💡
Listen to the podcast episode here.
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