5: Series C/Unicorns, Driving Social Change

[Music] You're listening to the Ellibode podcast. I'm your host, Louise Beaumont. As of 2022, Europe is home to more than 70 unicorns, companies that have been valued at over a billion dollars. These companies and their founders have a lot of implants that goes beyond their industries. So, once the startup goes from humble beginnings to unicorn status, how does their approach to impact change? How do millions of euros of funding provide new opportunities to make internal and external impact? That's exactly what we'll be exploring in this episode with some fantastic guests. First, I'll be taking a deep dive with Norvan Bowtham of Invested and Nina Vers of Female Founders, into how successful founders can positively influence their industries. Then, I'll be speaking to Valentin Stalf of N26, an early-world portfolio company, about how he's using his success to change the conversation around banking in Europe and beyond. [Music] We start with our deep dive conversation and joining us from Vienna in Austria is Nina Vers, the co-founder and CEO at Female Founders. Hello, Nina. Hi, Louise. Thanks a lot for having me. And then, from Berlin, Norvan Bowtham, the co-founder at Invested. Hello, Nor. Hey, Louis, you're a great beer. Thank you for the invitation. I'm excited to get into it, but before I do, let me just share a little bit more about you and the expertise you bring. Nina, you've been in the European tech ecosystem for the last 11 years, mostly on the investor side, working at Speed Invest in Avk, the Austrian Private Equity and Venture Capital Organization, before building Female Founders with your co-founder. Female Founders is Europe's fastest-growing community of entrepreneurial women, with a vision of contributing to real change in the tech world. They provide access to funding for female adventures with programs like their Startup Accelerator Grow F, and their leadership accelerator, Lead F, playing a huge role in helping female leaders succeed in their careers, and providing access to female talent. Now, she's got a background in HR, and has spent the last eight years in skill ops, which is Dutch and moved to Berlin to lead the People Team Sound Cloud, and most recently was the Chief People Officer at N26. That was until she started her own company, Invested. Invested helps companies grow from serious scene beyond, aiding founders in upskilling their organisations, and then, using the money they make, Nur and her team reinvest in the early stage Startup Scene with a focus on underrepresented founders. Nur, let's kick things off with you. You came off the back of huge successes like N26 and Sound Cloud. What made you want to found invested? Great question. Anna and I actually met already 13 years ago, and we were working together at TomTom. Basically, what we did, we came together with a bottle of wine, that's always the magic, and put together elder topics that are important to us and said, how can we create a business out of it? What's important to us is the position of women in work, and not only in the passive-active of a company context, because there we have been active for quite a while, but also especially in the part of investing, where you still see that capital is very unequally divided between men and women, and I'm sure that Nina can say much more about that. But there was one element where we wanted to play a part in it, and also on the second hand, we saw the way we both come from the people in talent space, that a lot of innovation is happening in that area. I think more companies start to recognize, and then not only an economic vehicle, with a social vehicle, and you also see a lot of innovation happening to support that part of being an employer. We wanted to combine the two, which leads to our consulting companies on how to scale and have a bigger impact as an employer, but at the same time, the money we make with that, we are reinvesting in the startup scene, again focused on those innovations in HR, but specifically focused on the representative founders. What a brilliant concept. I'd love to know, Nina, what led you to establishing female founders? What were your first steps? So that's a very long thought process that went into this to be super honest. My whole professional career has been to the startup ecosystem, and most of the time I used to be an investor. And it's really very obvious with both groups that we are looking also at today, and both lack diversity. So my co-founder, Lisa and me, we chose the topic of gender diversity that we are particularly focusing on. But overall, if you look at the European tech ecosystem, there are also many other aspects of diversity that are really not covered actively right now. So what my co-founder and me did in the very early days is that we built an association that we ran on the site, and we started out with making sure that all the women that were already in the ecosystem back then started to get to know each other and to collaborate. So we want to avoid building a parallel universe where everyone is female and super happy and super nice, because this is unfortunately just not what is going to happen. But really also thinking about how we can close the gaps that are out there, and also how we can start building bridges with every individual involved that wants to participate. And we came to a point where we were like, okay, either we find a person that is also paid to run this or we quit our own jobs and do it ourselves. And as we can see now, we decided to quit. And now we've been doing this two years full-time, and I can say it has been a very, very wild ride, but also a very good one. And now, well, you've had success with the programs offered by the organisation. But what gaps did you see in the VC and accelerator ecosystem? And how exactly does this female founders fill those gaps? We really try to think about the value add for the founder. So when we, for instance, create new event formats, the main question that our team is asking itself is, what is the concrete learning that an attendee should have when she leaves the event? And adding a specific point of network be it access to capital, which is one of the main drivers that we are pursuing, or be it access to talent. Because luckily, what we have been able to create is also an atmosphere of trust, which is important. If you want to build a company where you sometimes feel very, very much alone, especially if you're doing it for the first time. So you need reference points, you need bearing partners, you need mentors, you need other founders that you can check in with. And that's something that we very much strive to provide. And you're both mentors yourselves. How has that experience influenced how you think of impact? Or maybe let's start with you. I think one thing that's really important, the one I emphasised what Nina was saying before, is one creating the access in the existing system and don't create a parallel world. And that changed for me and Anna. So in the beginning, we thought like, okay, we want to build out our network or female investors, we want to encourage women to start investing, we want to get connected to female founders and we could connecting both together. And that's where our direction changed a bit, where we would like, like we want to be the bridge to integrate, actually, and making sure that the female founders that we are talking to, that once we invest, that we introduce them to big, male angel investors who mainly have a pipeline of white male founders. And also introducing female investors, connecting them to other male investors that we know scout programs with VCs, where they meet other investors. So really bringing that change from within the ecosystem. And I think that's very important, but for us, that was not a starting point. We learned that along the way. And the second thing is that what we really realise, because we experienced it ourselves, is one of the hurdles, why there are less women active in investment scene, is that with every new system that you enter, a system is intimidating. If you move to another company, to another country, because the language is different, the behaviours are different, the patterns are different, you don't know them. And the world of investing and money has a very strong male connotation. So the language has been created in a meal way of thinking, the systems, etc. And that's really intimidating. And for me and Anna, we wanted to go in that world, it was also intimidating. But we thought it helps when you're with two, to say we're not going to be intimidated. We're going to have calls with everyone that we know in the investment scene to explain to us how we understand the system. So we had call after call with literally a Google door, and wrote down every word that we never heard of, hang off the phone, Google the words. And I still remember the first call that we had where we called each other afterwards, oh my god, that understood the full conversation, B2, high five. And once you know a system, it's actually not that intimidating. But one of the important things for us is that we also want to show women and share, and there are a lot of great initiatives already in the financial world. That is demystifying this financial investment world to women. I think that's very important as well. and be experienced. ourselves that once you know the language that created a second fashion that we didn't define originally that we wanted to help to demystify it. So today the discussion surrounding diversity is much more prevalent and mainstream than it was 10 years ago and many of the continents unicorns got off to to their start but have you seen an increased interest from series C companies or from unicorns wanting to actually diversify their teams? Yes and no. So that's always very anecdotally I have to say but what we are seeing overall is also in terms of hiring and making sure that talented team members have access to knowledge and can learn and also in order to get promoted. There are more more scallops and unicorns that also actively either in-house or with partners like us make sure that diverse candidates get the same opportunities as other groups. So we can see that unfortunately what we also see I mean if you look at all the big unicorns in Europe that there are rarely any female co-founders yet. So I hope that this is something that is to come rather sooner than later. So what we also see is that many founders and co-founders of unicorn companies are available for things like mentoring, speakerships, etc. So that's a good first start but also honestly mentoring and speaking is just not enough. There need to be more resources to make sure that women get more access and that is actually committing to certain ways of how to promote women, how to educate them, giving them access to certain circles that right now they are not invited to and also giving them money in terms of the women who start their own companies. Two things I would add to it like our main clients are Ceresi and beyond companies and we help a lot with executive transition. So not on the founder side we do see that Ceresi is kind of the tipping point where they realize okay I'm also getting I mean it's not all coming from a noble cause they're going towards IPO and they know that new restrictions will come up of the diversity of the board and of the executive team so they know around that moment in time like now we really need to change something and very often the conclusion is that when they reach Ceresi status that they lack so far behind that they need to put aggressive measurements in for a more diverse executive team and board. So on one hand it's a little bit sad that that in general is still the state where they land I want Ceresi the positive thing is that they do really action it. The thing that I'm not seeing a lot and I hope that also a lot of HR leaders will be more active about it but employees also asking for it. I think founders who reach the unicorn state has is also the moment where founders start actively angel investing and a lot of times in their alumni groups and I think they should be way more transparent and explicit to the entire employee workforce also women. If you're proud of building a company and a culture where you create entrepreneurs be so explicit about it that you say to the women I also encourage you to be an entrepreneur we invest in alumni because I come from a company that like N26 is really creating entrepreneurs and the founders are super bought into it and they invest a lot in all of their alumni but I also see is that and this is a bit black and white but in general the men are not that hesitant to go to the founders to ask for that investment and they will give it to everyone who will ask but the women will not ask so why I want to ask the founders please tell them that you actively invest when they are leaving to start their own business be more proactive about it and the second thing is around Ceresi is also when companies start handing out more equity and we need more women participating in significant exits so that they can become angel investors and I really urge HR leaders and founders do more education with your female employees for them to understand the equity packages and why they need to opt in on equity over cash so that they have a bigger portion of those exit amounts in the end that will be a massive catalysator for change in the future. Nina can I ask you something also follow up like do you see a change in behavior from VCs to actively diversify their deal flow like RFCs more and more actively reaching out to you like I understand it's difficult to build a brand but you are a brand right? Luckily yes and honestly I think there are two reasons for that so on the one hand there is this intrinsic motivation that is shared by many investment teams like the honest belief that also diversity is contributing to a world intact that is more profitable also and gives opportunities to broader groups of people which will be good for all of us and then there is the second reason which is probably less noble but still something that is going to move a lot within the tech ecosystem is that more and more LPs so the investors who invest in funds are asking what are you actually doing to make sure that your portfolio is more diverse also in terms of the backgrounds of the companies that you're investing in and as LPs are getting more and more strict we also see an uptick in the interest in the field and this is the thing that gets the community going and I'm fine with that and we're here to collaborate there. You've both listed things that the ecosystem could do better or needs more of so what is it that founders can do to make sure that they themselves are the best leaders and role models that they can be? Well I like the founders who pride themselves that they create entrepreneurs are highly respected you have an entrepreneurial company you can shape entrepreneurs but for me the ideal founder is who not only enables the environment and reactively will support it but who proactively stands out on ensuring that those opportunities are for everyone and I think too often I don't have any science backgrounds but it's basically my observations too often the alumni starting the new companies are still people coming from privileged backgrounds high education McKinsey background then go to the startups and then they're funded by the alumni and I would love to see that those founders are passionate about being a role model for the people who don't come from that background and are underrepresented it so in my dream world that founder stands up and says you can all be an entrepreneur I'm here for you if you didn't have access to the mind things I will give it to you because that's the passion and that's what I want to be my legacy. I think that's a very beautiful way to put it and also something that is resonating a lot with me I can definitely also add from my side that I always also try to avoid to have like this blueprint personalities that we promote because I think that's exactly one of the problems that has led us to where we are right now that also like the mainstream idea of an entrepreneur is something around Elon Musk and that's just not attractive for many people out there who could become entrepreneurs because putting people like him so much on the top of what we're doing is really preventing people from entering the entrepreneurship community because they feel okay I'm so different than he is I cannot achieve what he has achieved because he's just so much more skilled accomplished has a better network etc so I think people like him are one way of being successful in the ecosystem and also thinking about what he has achieved is just impressive but this is not the only way of becoming successful in the tech world and making an impact with the product and the company that you might be building and that's also what we try to work on when we promote speakers and experts in our community to make sure that we show also how different success can look like and to show that this is also very important to see that regardless of age where you're coming from the specific education that you had there is always a way to get started. Okay I mean Elon Musk's family became Uber wealthy off of an emerald mine. Not many people are starting with that advantage when they begin their entrepreneurial careers so that that's a really good point there are so many paths to success and it's important to bring those stories to the forefront but when you're both working with founders what are some of the main challenges they face how do you help them to realign and stay true to their initial goals vision for their company. As a founder in the beginning stage you share with that group of people that community that still connects where do you want to go and kind of the community makes it work and all of a sudden as a founder where you could touch every little topic and you knew everything was happening you now have a system of problems that you can't single handedly all solve so you see some founders are going on super micro level so they think if I go deeper in the weeds I can solve all of it and I can be the glue that connects everyone and they can't because that's physically impossible so then they are going to put in leaders and they either promote them from within but those people are suffering the same problems that they are suffering because they have never seen these problems becoming problems or the hiring people from outside who have a bit of a heroism syndrome because They come from the outside to save you. So they come in to save your company and often not acknowledging what has already been done before. And then they need to marry those two worlds together. And their role as founder, all of a sudden, I mean, they had a great idea. They created it. They shared it. Everyone was inspired and made it work. And now all of a sudden, they wake up on day and the company is complaining, "Mary going, you don't communicate. The people who were there early stage think you're creating a corporate and the people who are coming in, I'm saying this is a kindergarten. Like how are you going to solve this?" And I think that's the biggest problem for a founder in that phase. And they just go in a pressure cooker and have to solve it. And they all think that they're the only person experiencing this. And I can tell you from all my customers, they're all experiencing this. And it needs to have like an acknowledgement of like this is normal. It's a long-go-street because then you can really and higher wing and very experienced HR leader as your twisted person to help you navigate. Like how do you, to say it unalligantly, we built a machine in a way that all the readers operate again and that the oil goes smoothly is really important. And I think a lot of time founders think that they need to solve it themselves, but they can hire someone to help them organize that machine and they can focus on what needs to come out of the machine and focus on the future and the output in the vision. So then look at it from the other side as an investor. Would advice do you have for investors who are investing in series C companies who want to make a greater impact? Yeah, as an investor I would really test with founders that there is a willingness to learn that they have a growth mindset and that there is a self-reflection piece because it's very painful to say it won't but okay I cannot solve this completely myself. I can solve A but I need other people to solve B. And very often in the early stage being really a bit more stubborn and really focused on your own path has always been rewarded. So all of a sudden you're moving in a different phase where something else is required. And I think investors need to check in on that and also make sure that they provide mentoring and guidance and safety for founders to go to that personal journey. Yes, so I can add to that is also when we collaborate with investors we are very much also looking at the composition of their investment team. So of course looking if there are female partners but also like you're looking at the diversity regardless of what role people have in the investment team. The second thing that is then actually enabling these women to have an impact is to see if they are really able to build their portfolio because you would be surprised like how many unfortunately female investors we see on European VC teams that are not able to get through a single deal. And this is not because they are not accomplished or they cannot source deals because it's of the dynamics that we see out there. So that's basically the hard KPI that we look at what kind of founders is the fund then working with and what kind of these are sourced by the team members that are on the investment team. And then I definitely agree it's super important to see more and more senior and experienced female entrepreneurs that then have the opportunity to also do the investment showing that being an entrepreneur and a female is absolutely possible and also enabling new stakeholders in the ecosystem to make their footprint in the world. That's exactly what we're trying to do. Thank you so much for your truly great insights both Neena and Neena. Founders can't and shouldn't do everything on their own and it's great that ventures like invested and female founders exist to support them. Coming up I'll be speaking to Valentin Stoff of N26, Europe's first and largest mobile bank. All about how reaching unicorn status can pave the way for creating a real impact. Hi podcast listeners. Want to learn more about Early Bird? We invest out of the family of funds into all growth and development phases of a company, providing financial resources and strategic support. Plus access to an international network in capital markets. With two billion Euros under management, eight IPOs and 30 trade sales, Early Bird is one of Europe's most established and active venture capital firms. We invite you to discover more on our website, earlybirds.com or head to our medium publication, EarlyBirdsView for deep dives and marketing sites. To connect with our team, find us on LinkedIn at EarlyBirdVinciCaptal or on Twitter at EarlyBirdVC. We hope to hear from you soon and thanks for tuning in. I believe that the startup organization is one of the greatest firms to make the world a better place. I think every moment in the history of business happens only once. Well into unicorn status, I work far more than just a billion dollars. Today, N26 is the leading challenger bank in Europe. At one point we said, okay, let's look back where we've been a year ago and we had maybe one million customers. Now we have more than 3.5 million. We were valued at 500 million. Now we valued at 3.5 billion. But sometimes you need to go back and say, okay, that's what you've achieved to be strong to take the next step. N26, Europe's first mobile bank, was founded in 2013 and since then the company has grown to have millions of users. Last year, N26 raised a $900 million series e-round and the company is now valued at more than $9 billion. So there's a note out that the company has reached unicorn status. For this episode's entrepreneurial insight segment, we're delighted to have the N26 co-founder Valentin Stalf, joining us from Vienna. Hello, Valentin. Hi, I'm super excited to join. I think a very cool series about impact and looking forward to give some insights. Now, you're originally from Austria and spent a year at Rocket Internet here in Berlin after graduating from University back in 2011. It's there at Rocket Internet that you and your co-founder, Max, decided to start building something of your own. But why a mobile bank? I think the banking industry is wrong in so many ways. There are so many things that people have fed up. At the same time, banks are also super huge companies. So if you look at some of the bigger banks in Europe, they have more than 100,000 employees. So I think, although a lot of the leading managers in banking, they understand the problems, but it's extremely hard to transform. And so in banking specifically, you have the unsatisfied customers as a result of very complex regumation and super huge companies. And together with the technological transformation, the smartphone actually being the branch today and not the branch anymore, and unsatisfied customers, there was exactly the right moment to go into banking. And when you first started in '26, how did you and the team define impact? And how has your definition changed as the company's growth? I think you need to actually measure yourself on the success that you have with customers in the beginning, because otherwise your company's gone. So in the beginning, at the end of '26, everything was about the customers. So the customer numbers is the retention there. Do people like the product? Do we have a good NPS from customers? They were the main KPIs that we looked at for the impact that we have. I think that the further you mature as a company, you have more opportunity also to give back some of the success you had in terms of the money you raised at one point or the profitability that you have. For me, as an entrepreneur, it has been in the beginning extreme difficult still. It's very hard to say you donate a million euros if you only raise a million euros. I think now that we've raised much more than a billion euros, it's much easier. For us, really the purpose is that we want to change people's relationship with money. And that is really the overall thing. But what we're doing is we're building a bank, the WorldBuffs to use. And that's why we have the highest impact on the day-to-day perspective. And now that we're in a stage that we are really, I would say, a leading company in Europe in the digital space, we need to think, I think, beyond that. You mentioned that as the company grows, the more you need to take, and active stance, and that really, really does resonate. Your own influence as a founder has also, obviously, grown as N26, are expanded. So how do you leverage your own success to be a positive influence or example for others? If, for me, personally, impact, I think from an outside, we have been successful in what we have been building. And therefore, I think I'm also a person that a lot of people, hopefully, some people take as an inspiration. As an entrepreneur, I see myself as being inspiring, motivating people to do things. If you can change something, if you want to have that impact, and that can be in a business sense, but that can also be in a non-business sense. I've been studying half a year in Tokyo. And what I was always inspiring with the Japanese societies, these people, they have their small shop for like 50 years, and it's the perfect job to buy a knife. And it's not about profit. It's about the perfect experience. And I think that's entrepreneurship. Doing something that you love and bringing it to a different level and having customers that really love it. On the other hand, you need to, and what you said, taking a stand, obviously, I want to take a stand in society matters in things that matter for me and I think a big thing is how we work together today and when you when you go through our company. I think if you have a job at N26 I think it's just fun hopefully. Your job is a big part of your life and I think if we can be a change there I think it's very important but there are many more dimensions where you can have impact on. Oh and something that that Nora also mentioned during the deep dive was how much she enjoyed working for N26 precisely because it was it was about encouraging employees to become entrepreneurs. So I guess coming back to your initial why? How have you stayed true to your early motivations for founding the company especially as you've just raised such a large funding round? I think it's about the value system that you have and the value system that you created but you need to challenge it all the time and you challenge it best with the people that you surround you with. It's always a balance between confidence in yourself and still checking if it's the right thing just because you're confident doesn't mean that you cannot say okay I need to think about that idea afterwards you can challenge your own idea maybe you take a different decision. I think when you talked to out of people they would say okay I'm a very future focused person so for me it's not very hard to take a different decision and I think that is that is very important on the other hand is also very challenging but coming back to what we did in the beginning and coming back to kind of put in the customer first the customer for me is the automotive truth in a certain value system. I think that's an excellent way of looking at it the customer really is the ultimate truth. So Valentin the the serity funding round that you've raised is the second largest round ever raised in Europe it made N26 the second largest bank in Germany just eight years after it was founded so listen to put that into perspective for you. Commerce bank the largest bank was started in 1870 that's a 143 year head start so beyond offering new products and new expansions what are some of the things that N26 has done or will be doing with this serity funding. The next step perhaps is really also talking about how do you save money we've already done a lot of things there with our space as product and so on but now going the next step in terms of how do you invest how do you build future wealth especially with the low interest surrounding that we have the whole topic of how do you invest goes even further it's about a sustainable investment impact investing I mean if you open up that there is another whole journey but I think in the end I said in the beginning we want to change the relationship with money as a company and if we want to do that the transaction piece is what changes your relationship because it gives you freedom the investment piece where you secure your future wealth and if you can do that with the values that we think are important sustainability green investing diversity investing I think there's a lot of things you can do there we are only in the beginning of uncovering I would say the next phase of that so we'd be remiss if we ignore the fact that you're really quite a celebrity within this space and an inspiration to many has the success of N26 given you a platform as a founder perhaps beyond banking I'm also working in the advisory board of the University of Vienna so that's also things that I'm important to myself I think that's where we can have the biggest impact investment and entrepreneurship is something that I'm very excited about personally and where I try to have an impact beyond kind of the business so off the back of that would advice do you have for founders at the unicorn stage and beyond you have a duty to make your business successful but you make the business successful in a way that is according to your values and so that's things I think you should always try to connect the impact to what you're really good at and that's normally your core business. Valentin thank you so much for your time. Thank you very much thanks for hosting me. This episode was jam-packed with incredible lessons from some of the most experienced names in the ecosystem to recap. Companies who've reached unicorn status and have thousands of employees can use their existing experience their network and their resources to make changes in new ways like in boldening employees to become entrepreneurs themselves or to use their product and expertise to solve real-world problems. Speaking of the real world our guests don't want to create a parallel world where all investors and stakeholders are women or underrepresented founders the change needs to come from within the ecosystem and operate in the real world and one way to make this a reality is to tune up your HR and hiring practices make sure you're not simply hiring the heroes to fix your problems. On board people that are different from you who think differently because if everyone on your team holds the same opinion your company can become really unproductive really quickly. So who do I guess see having a real impact on society? For Nore it's Hase Coppins founder and CEO at OpenUp. Hase is on a mission to make psychological support available to everyone. He started an affordable private practice and expanded it to an international employee mental health benefits provider. For Nore he's a founder who combines a really strong mission with drive and ambition. Nina had a few of her own including DiPali Nanjir co-founder at Alma Angels an angel investor network. DiPali is also now a partner at speed invest with a clear goal of investing in underrepresented founders and being super approachable and open. Another inspiration is Johann Hansmann a super angel with more than 40 portfolio companies. He is one of the biggest supporters of what Nina and the team are doing at female founders both in terms of opening his network and looking into their deal flow. Valentin Stalf definitely has founders he admires and he also looks beyond his ecosystem to politicians to sports people and even mountaineers for inspiration. Inspiring for myself and the impact on society and themselves is always also people that are super successful in sports and then afterwards transform that and are still inspiring for whole generation. So we just had an offside that famous mountaineer Rheinord Messner was joining us. He's now I think 78 or something around that and he's still he's living for mountains. He's living for bringing mountains closer to people. And so I think that is inspiring to me. If people take their professional and bring it to people to give them inspiration for doing things that they would not have done before. Thank you to Nina, to Noah and Valentin for joining us. Coming up in the final episode of this series we explore where we go from here with a focus on demystifying the world of investment, expanding our own networks and how disruptive technologies will bring about the biggest global changes. We don't expect you to be a social impact warrior but I guarantee you and we have seen it that because of the networks they have they just naturally have diversity as a value. It doesn't have to be a merdy. This podcast was produced by Bear Radio for Early Bird I'm your host Louise Bond.