Welcome to Different

STAGE

SEED & SERIES A

LAST INVESTMENT

JANUARY 2021

AVG. TICKET SIZE

€500K - €2.5M

Companies Backed

45

At what stage do you invest?

We invest when founders are raising between €500k and €5m in total. Also known as ‘pre-Seed’, ‘Seed’, or ‘early Series A’.

These are the ‘teen’ years in a startup: volatile, exciting and life-changing. In many ways it’s the most formative time in a company’s journey, and it’s where we think a great founder-VC partnership can make the most impact.

What sectors do you invest in?

We prioritise founder exceptionalism over every other investment criteria. So we’re largely sector-agnostic. So far we’ve invested in everything from LabGenius (BioTech) to Thought Machine (FinTech) to Boiler Room (Entertainment) to the plant-based meat alternative THIS (FoodTech). We feel comfortable working from first principles alongside founders in many fields. We listen hard and learn fast.

In which countries are you active?

Most of our companies are based in Europe, but we’ve also invested outside of the region. For example, Invisible, Garten (previously Oh My Green), Medal and Pollen (previously Verve) are all based in the US.

We live in a time where world-changing companies are being built everywhere from Bucharest to Belfast. And where they are, we go.

How many investments do you make per year?

On average we do around 10 deals per year.

 

How much money do you usually invest?

We typically invest between €250k and €3m. We also ring-fence money to make follow-on investments in our portfolio companies at later stages.

What are your investment criteria?

We have a detailed list of criteria (as should you!) but as said, we prioritise your exceptionalism over any other company attribute.

Generally there are six traits we look for in founders:

FOUNDER — MARKET FIT. Why are you uniquely placed to execute this idea, and build this company, in this market, right now? What’s giving you a disproportionate competitive advantage?

GRIT. A lot of what goes into building a healthy, strong, successful company isn’t sexy. Do you have the resilience and commitment needed to keep this thing moving day in, day out?

SPEED. In so many of life’s scenarios, timing is everything. Do you think and execute at laser speed when needed?

AMBITION. There’s nothing wrong with a lifestyle business, but that’s just not what we back. How far do you want to take this thing?

POLITICAL QUOTIENT. Can you motivate the talent, customers and investors you’ll need alongside you on this journey — without resorting to some kind of Faustian pact?

GROWTH MINDSET. Do you have the self awareness to know your own strengths and weaknesses, and the hunger to keep developing yourself?

If a founder has these factors in place, we’ll move to assessing whether the business itself has venture-scale potential.

Will you only invest if you can lead the round?

We typically lead. In our latest fund we’ve led roughly 65% of the investments. And when we do, we roll up our sleeves and do that role justice. See below for the ways you can expect us to help.

But if there’s another VC that’s a better strategic fit, we’re more than happy to collaborate — we try to always prioritise what’s best for the founder and the company.

 

Is it true that you consult an oracle to reveal a founder’s cosmic destiny before making investments?

Errr…nope. Unless you mean Pascal?

 

How do I get in touch with you about my company?

The best thing to do is send your pitch to someone suitable in the BACKED Community – we collectively review community referred deals on a weekly basis.

Alternatively you can share your pitch via this form. We respond to these pitches as quickly as we can, but only after referred pitches.

You should also sign up for our newsletter so you get the inside scoop, our latest news and opportunities, and invitations to those terrible, boring events you’ve probably heard about.

What is your investment process?

INITIAL MEETING

A 30–45 minute meeting with a member of the investment BACKED team. We’ll get to know one another, learn more about what you’re building and introduce you to our fund. You decide how we run the conversation — we can walk through your deck or have a more free flowing conversation.

FOLLOW UP MEETING(S)

45–60 minute meetings with different members of the BACKED team. We’ll dive deeper into some of the topics we discussed in our initial conversation and help you get a better understanding of our fund. We’ll typically outline priority topics in advance to give you an idea of what we’ll spend time on.

DILIGENCE

If we both feel like there is a good fit, we transition into the diligence phase. Here we’ll dig deeper into your data and conduct reference calls with customers, peers, and prior investors. This phase will likely also involve further calls with the BACKED investment team that follow-on from topics discussed in prior meetings. At this point, you should also do your own diligence on us, and we’d be happy to connect you with any of our founders as part of that process. Mi casa es tu casa.

FINAL DECISION

We’ll have a final meeting with the whole investment team. We’ll use this time to tie up any loose ends and give you an opportunity to get to know the wider team. After this meeting, we’ll make a decision. If we decide to invest, we’ll issue a verbal offer and kick off the process of preparing a term sheet for you.

We’ll communicate frequently during the process. You might be invited to one of our events like a founder dinner, a workshop, or an evening gathering like VISIONQUEST. It’s a great way for you to meet more people in the BACKED community and for us to get to know each other more informally.

Whether we invest or not, we’ll always try to send you in the right direction if we can, whether that’s towards our angel network, another VC fund, or a helpful advisor. We also try to keep in touch with the best people we meet through our events and newsletters.

How long can I expect your investment process to take?

The process varies from founder to founder but from the first meeting to term sheet you can expect it to take between 2 to 4 weeks. 

The fastest deal we’ve ever done was two weeks from the first meeting to the funds hitting the company’s account.

 

What materials should my deck include?

You choose how to tell your story, but we think the best decks cover the following:

  • What is the problem you’re solving? Include any evidence you have of this problem and why it matters.
  • Who are you? Tell us who is in your team, what were they doing prior to joining your start-up, and why you’re the right team to be solving this problem.
  • How are people solving this problem today? Tell us about how other people are currently trying to solve this problem and if/ why these solutions aren’t as effective.
  • How are you solving this problem? Tell us how you’re solving this problem and why your solution is unique. If relevant, we encourage you to do a brief demo.
  • What is your business model? Tell us about how you’re going to make money from what you’re building.
  • What is your go-to-market strategy? Tell us about the customers you’re targeting and how you’re going to bring them on board.
  • How large is this market? Tell us about the size of the market you’re operating in and what share you believe you can capture.
  • What does the competitive landscape look like? Tell us about your main competitors and how you believe you’re better.
  • What have you proven-out so far? Tell us about the progress, either technical or commercial, you’ve achieved to-date.
  • How much capital are you raising and what for? Tell us roughly how much capital you’re raising and what you intend to achieve with it.

What support can I expect from you beyond money?

Our ambition is to be the best Seed VC partner for founders in Europe. Money is a critical component, but it doesn’t end there. Whenever a founder puts their trust in us, we put our energy, expertise, network and brand to work for them in return. Here’s an outline of what it means to be backed by BACKED:

FOUNDER DEVELOPMENT PLATFORM

Our founder development platform is designed to offer the optimal Seed experience to founders, by helping them and their companies develop along key measurable goals prior to their Series A round. It includes 30+ proprietary features including workshops, masterclasses with industry experts and self-service management tools that founders can use with their teams, across business functions. There’s also plenty of bespoke support from our Head of Founder Experience, Sonia Maciuszewicz.

THE BACKED PORTFOLIO COMMUNITY

From the day a founder becomes part of BACKED, they and their teams become part of our intra-portfolio community. The community shares know-how, advice, bargains collectively with service providers and builds mutually beneficial networks.

A few of the ways we foster this community:

  • Weekly newsletter
  • L&D workshops and masterclasses
  • Role Roundtables
  • Informal social gatherings
  • Portfolio-wide Slack workspace

 

ACTIVE BOARD PRESENCE

We use active deliberately. We like to work as peers and the best board meetings turn into whiteboard meetings. But we’re also there between boards. We want to be your first port of call when the shit hits the fan (which sooner or later it will. #startuplife). We’re not quite The Wolf from Pulp Fiction, but that’s the vibe.

THE NETWORK

We understand the competitive advantage of a powerful network, and invest heavily in ours: from angel investors to corporate customers, service providers and media titles. Our founders can find and access anyone in the network via the collaborative databases we’ve built. Seriously – our founders automatically gain access to anyone we’re connected to.

HIRING SUPPORT

The people in your team have a disproportionate influence on your company’s success at Seed. Sourcing, hiring and managing the right world class talent is crucial. Similarly the wrong hire can drain your energy, zap your team’s morale and in the worst cases even jeopardise your company.

We invest a lot in helping founders get it right: we’ve drafted job descriptions, assisted with interviews and helped to navigate the sensitivities of letting someone go. Our Founder Development Programme places a lot of emphasis on helping founders develop as people managers, and supporting those in people functions in our portfolio companies.

PORTFOLIO JOBS BOARD

We pool all live portfolio roles to amplify their reach: all roles, across the whole portfolio, filterable and searchable for top talent looking for opportunities. It also means we have visibility over the available roles in our portfolio and are able to refer exceptional talent to specific roles.

IN-HOUSE BRAND & COMMS EXPERTISE

Understanding and owning your narrative can be a significant competitive advantage in everything from fundraising to hiring and business development. Our Head of Brand & Content Vinay Chaudhri helps founders across the board, whether it’s building their brand strategies, developing key messaging, content ideation, sourcing creative agencies, writing press releases or talking to journalists.

How do you help your companies raise further capital?

We work tightly with our founders on further fundraising, establishing KPIs, structuring pitch materials, making introductions and back channeling on your behalf. Through our previous investments we have built a strong reputation and good relationships with many European and US Series A+ investors. And to date, we have re-invested in 100% of our portfolio companies that raised follow-on funding.

 

What makes BACKED different?

We think the depth and breadth of support we outlined above is pretty unique. But many of our founders tell us that the defining difference between us and other funds is in the human relationship they have with us.

We know that some VCs have reputations as spreadsheet automatons, bloodsucking vampires and douchebags. They’ve worked hard to earn those reputations. This is the point where we say “ we’re not like that!”. But the truth is: we’ve never voted against a founder. We know that you’re putting pretty much everything into your companies and we respect that.

 

How do I know this isn’t all bullsh*t and you really just want to harvest my soul?

Good question. Reference check us with any of the founders we’ve backed. We’ll happily put you in touch.

 

What’s your diversity, equality and inclusion strategy?

Words without actions are meaningless — we know we’ve done nowhere near enough to reduce bias and exclusionary behaviour within the venture-tech ecosystem to date.

We’re intentionally taking steps to make our community of founders, companies, employees and scouts amongst the most diverse and inclusive in the world.

Below is a list of our key initiatives, actions and policies. If you want to learn more about them, please get in touch with rachel[at]backed[dot]vc.

OUR HIRING PROCESS

We’ve worked hard to de-bias our recruitment processes and remove the structural barriers to entry for candidates outside of dominant groups:

  • All JDs are gender-bias filtered before going live
  • Job ads are posted to diversity-focused communities and job sites
  • All job descriptions include salary ranges, and we make sure our person specification includes only the minimum requirements — no ‘nice to haves’
  • Inbound responses are anonymised
  • All interviews follow a standard format with a pre-determined question set
  • Candidates are scored against pre-set criteria
  • New employees are asked to provide feedback on the interview process

 

OUR INVESTMENT PROCESS

Our main power as a fund is in capital allocation. We know enough to recognise that in this area both systemic bias and structural barriers are really prevelant, and result in depressingly few individuals outside the dominant (cis-white-heterosexual-abled-wealthy-male) archetype receiving investment to pursue their ambition. 

We are working consciously and intentionally to debias our deal sourcing and investment decision making process:

  • Our Sourcing Community has been deliberately designed to ensure significant representation of community leaders from underrepresented groups. As a result, it’s changing the breakdown of who gets referred into our pipeline (and broadening our perspective in due diligence to help counter bias for good measure).
  • We have a filter form for our cold inbound so that we review that deal source consistently.
  • We are actively engaging new deal flow sources: angels, accelerators and funds who focus on underrepresented and diverse founders
  • We are tracking the gender and (observed) racial and ethnicity breakdown of our investment deal flow on a weekly basis. We use this to hold ourselves accountable and measure the impact of the other initiatives mentioned here.
  • We consciously apply benefit of the doubt and take first meetings with founders that fall outside the “default” group, unless there is no doubt that the business is outside of scope or not venture appropriate.
  • Wherever possible, we ensure more than one member of the broader investment team will meet the founder(s).
  • Taking the decision on whether to pass or progress only after a dialogue that is structured to check and challenge bias and presumption — in particular around the founder-market fit, recognising that this area is where assumptions benefit the default group and work against others.
  • If we pass, a brief rationale is recorded in our CRM with the names of the two investment team members that participated in the dialogue referenced above.
  • If we pass, the feedback we provide must be constructive and we must always investigate who or where we can warmly refer the founder(s) to in order to have another opportunity to pitch for investment.

 

PORTFOLIO SUPPORT

We are also exploring how to support our portfolio companies in their own diversity and inclusion efforts. Here are some of the initiatives we are piloting:

  • Diverse & Inclusive Hiring Workshop
  • Portfolio Roles are promoted on diversity-focused jobs boards and talent communities on social media.

 

CONTENT AND EVENTS PROGRAMMING

When it comes to selecting who to profile for an interview or cast in a panel, we intentionally showcase and celebrate a diverse and balanced range of stars from the BACKED network.

BACKED DEMOGRAPHICS

Here are our current demographic numbers. We are aware that the classifications below are limited, but we do not yet have the infrastructure to collect or parse full ethnicity, gender identity, sexual orientation, disability, class and educational level data across our community.

BACKED Full Time Employees

  • White female 2/8 (25%)
  • White male 4/8 (50%)
  • NBPOC female 0/8 (0%)
  • NBPOC male 1/8 (12.5%)
  • Black female 1/8 (12.5%)
  • Black male 0/8 (0%)

 

BACKED Sourcing Community

  • White male 13/34 (38.2%)
  • White female 9/34 (26.4%)
  • Asian/NBPOC male 4/34 (11.7%)
  • Asian/NBPOC female 2/34 (5.8%)
  • Black male 4/34 (11.7%)
  • Black female 3/34 (8.8%)

 

BACKED Portfolio Founders

  • White female 5/56 (8.9%)
  • White male 42/56 (75%)
  • NBPOC female 1/56 (1.8%)
  • NBPOC male 7/56 (12.5%)
  • Black female 0/56 (0%)
  • Black male 1/56 (1.8%)

 

What’s your Anti-Discrimination & Anti-Harassment Policy?

Here’s our policy.

We are insistent on a safe work environment in which no member of our community is mistreated or discriminated against on the basis of sexual orientation, race, religion, age, nationality, gender identity or any other characteristic protected by applicable law.

 

How do I get in touch with you about getting a job?

Please check our Jobs Portal for all active job listings across our portfolio and BACKED.

 

Any parting wisdom for me?

The only thing left to say is: who you choose really does matter. A VC really is the one hire you can’t fire. Life is too short for hanging out with assholes. 

May the force be with you.


The journey is better with friends