byFounders: “We don’t invest in good ideas, but in founders”
The venture fund, byFounders, is ready to invest in the first 10 startups with global scaling potential. The money will be invested in founders rather than in the best ideas, says managing partner Eric Lagier, discussing the newly launched fund in an interview.
Over the next four years, 40 startups will be able to grow their global potential with investment and knowledge from the venture fund byFounders. The aim is to fund 10 startups per year.
Through the eye of the needle
Eric Lagier, who shares managing partner duties in byFounders with Tommy Andersen, expects byFounders to assess a minimum of 1,000 startups over a year to find the first 10 to receive growth funding.
Previously, the fund has stated, that their focus point will be the same areas, as the 37 members that together constitute byFounders, represents.
Going for IoT, AI, and HR
Fund members include Kaare Danielsen, CEO and founder of Jobindex; Heini Zachariassen, who with Theis Søndergaard is behind the wine app Vivino; David Helgason, founder of billion-dollar company Unity; and Camilla Ley Valentin, founder and CCO of Queue-It, among others. Ley Valentin is one of two female fund members.
The fund have their sights on startups with globally scalable business models within machine learning, artificial intelligence, blockchain, innovation within fine tech, Internet of Things (IoT), and HR-tech. byFounders member Kasper Hultin is behind the latter with Peakon.
Next step – other Nordic countries
The next step is to strengthen the startup network’s presence in the remaining Nordic countries and the Baltics to increase the likelihood of spotting the next big growth business.
“We are looking forward to spend more time getting experienced entrepreneurs from other Nordic countries on-board. That way, we can strengthen the network and increase access to exciting startups in the Nordic region,” says Eric Lagier.
Money in teams
byFounders wants to be long-term investors. The fund expects to be with the companies they invest in for up to 10 years.
The fund focuses on seed money and series A, which in practice means that they, together with business angels and innovationfunds, will invest in startups that have a protype, and can demonstrate that their product has a market fit.
The venture fund also works with more developed startups that, as well as the above, have a functioning business model, ready to go the extra mile with added investment and guidance.
Ideas not the most important
First and foremost, founders are the point of focus for the fund. During the selection process, the teams’ ability to realise their own potential will be instrumental to whether or not their startup receives funding.
“We don’t invest in good ideas, but in founders. We would rather see a fantastic founding team with an okay idea, than a brilliant idea, where we doubt that they are able to realise it,” says Eric Lagier.
Founders must lead the way
byFounders do not want to replace and put together their own dream teams – that kills the passion necessary for success for existing founder teams, according to Eric Lagier.
Instead, the fund will spend a long time meeting with startup founders, so both parties get to know each other well.
“We will ensure clear communication and that everyone is treated well. We’ve been in the founders’ shoes,” says Eric Lagier.
Nor will byFounders steer operations in the startups they invest in – the responsibility has to remain with entrepreneurs, not investors.
From Denmark to the world
Instead, byFounders will bring their experience, network, and guidance to the table. The third principle is to think globally from day one.
“We are looking for entrepreneurs with global ambitions. We can take them on a journey starting in Randers or Copenhagen and, for example, have them in San Francisco in a few years,” says Eric Lagier.
Talks with further investors for the fund are already underway.
Eric Lagier does not wish to mention names, but says that byFounders are talking to entrepreneurs, family funds, and institutional investors.