Anya Navidski is the founding partner at Voulez Capital, a venture capital fund here in London that only invests in companies with a female founder. Established in June 2018, Voulez has already invested in medtech firm Medivrse and cosmetics company SkinNinja.
Anya came in to the Techworld office earlier this year to chat about her career to date, what Voulez looks for in an investment and what needs to change for the industry to become truly diverse and inclusive. Below is a transcript of the conversation from the above video, edited for clarity.
Scott Carey, editor at Techworld: I think the best place to start is with your career. You founded Voulez Capital last year, what was the idea behind founding a fund of your own?
Anya Navidski, Founding Partner of Voulez Capital: So I never really anticipated running a venture capital firm and I certainly didn't consider VC as a career option for many, many years.
I guess it was a result of an entrepreneurial choice. Like a lot of my choices of the last 10-15 years. I saw a gap in the market. You know, funnily enough, I was pregnant at the time and I was looking for a breast pump and was trying to find something that wasn't designed in the 1950s. I came across a story of Naya in the US. It's basically like the iPhone of breast pumps. It's redesigned technology, it looks amazing, but the founder had a horrific time raising money. Male VCs - and mostly VCs are male - found it hard to connect with the product, they found it disgusting, they didn't really understand the market, and they couldn't see the potential of it.
In the US there are funds focused on women entrepreneurs, and they were doing really well. In Europe at the time when we launched, there was nothing. So I felt like there was a huge opportunity. So for me, it was very much a startup-y choice, rather than an investor choice and I guess now I'm on this side of the table, and now I'm referred to as the former entrepreneur.
When you talk about spotting a gap in the market, it's obviously a fund focused entirely on investing in female founders, is that where the idea came from?
Very much so. So our investment criteria is at least one of the founders has to be a woman. The premise for this is very straightforward. If you have a woman-run business, let's say the founding team is all women, it very quickly becomes diverse. Data shows that over and over again. If you have an all-male founding team, it typically stays all-male for a very long time. As an investor, I want to invest in diverse businesses because they bring better results, better returns. The founding team has a better perspective on the business that they are trying to run, on their customer needs and all those things. So it just makes business sense.
Since last year, we actually now have some more statistics, we have some more information about the makeup of the industry. Did that data surprise you? Or did that kind of reaffirm what you thought about the industry as a whole?
So the industry has stayed very stable for about 30 years. If you look at some of the numbers coming out of HBR, over the last 25-30 years, there's been very little change. So I'm not surprised by the numbers. But I think the numbers come from both sides.
Partly it's how the venture capital industry functions as a whole is focused on valuations, it focuses on trying to find one unicorn out of 100, if you found two out of 100, then you are a superstar in the VC world. That tends to repel female founders. They want to grow their businesses just as much as the men do, in fact some research shows they're even more ambitious with regards to growth, but they want to have the right investor on their side, they see it as a partnership and if an investor doesn't match the culture of their business or what they're trying to do with their business, they tend to just decide to go and do it on our own, we'd rather grow more slowly, but do it on our own terms. So that creates the imbalance.
If you look at applications to VC, you'll see that they're less than 5%, from female founders. So the problem is in both ends of the equation. I actually personally think if if the VC is doing their job right, women will come to them. That's kind of the premise of Voulez Capital. I don't have a deal flow problem that a lot of my colleagues in the industry will say exists. I think that's partly because of the culture that we create. It resonates with the female founders, they see us as a long term partner to their business and that seems to work.
I cover the technology business and what we have seen over the last few years is that some of these aggressive, male run companies that have been piled with VC cash and they've grown very, very fast, it's kind of tumbled down on them eventually, it's come back to bite them. I think a steadier approach is just good for business. Is that what you're seeing with the companies that you're engaged with?
Very much so, it's going back to the fundamentals of business. Growth at any cost may have worked for some like Facebook, but it doesn't necessarily work for every single business. There is that kind of balloon/hot air element to the industry at the moment, and it does eventually explode and it's not great for investors, it's not great for customers, it's not good for great for companies. So I try and go back to the fundamentals of business, there has to be real value that's being generated.
That also means actually people are willing to pay for it. At the end of the day, if customers are not willing to pay for the value that you create, then clearly you're doing something wrong. So going back to revenue, going back to steady growth, going back to strong relationships with your customers, strong relationships with your suppliers, being a real player in the ecosystem, and for me, it's about finding those kinds of businesses. Women, historically, are quite good at identifying those areas and they focus on that steady, consistent growth over time. And that's what I'd like to see in our companies.
One thing that keeps coming up when we talk about these issues within the industry and for female entrepreneurs finding funding, finding the right partners, one thing that we keep coming across is that they have historically had trouble getting into the right networks.
Is that an issue that you definitely see in the industry? Is there anything that you can do to get women into those networks that leads to the funding and leads to the success that they've seen from their male counterparts in the entrepreneurial business?
I think you've identified a very important question. A lot of VCs tend to have a fairly narrow pipeline source, and that's usually their business school networks and other, similar ecosystems. One of the things that we're trying to do is have as broad an ecosystem as possible in terms of a deal pipeline and I think that's what really works for us. That takes real action on behalf of an investor and not just the entrepreneur.
At the end of the day, yes, warm introductions are important. But fundamentally, I get 50% of my deal flow as direct approaches to Voulez Capital through our website. We make it very easy for someone to send us a deck, we make sure to go through every single one of them and if people ask for feedback, we always give that. So again, they can learn and figure out where they fit within the ecosystem. That's really, really important.
Yes, women need to network more, but I think at the end of the day it's the homework that you do on the investors that you're approaching. Quite often people just try and approach hundreds of investors and hope something will stick or they take the first cash available and I really encourage entrepreneurs to find the right fit. Because at the end of the day, if you do due diligence on the investor as much as they do on you, it becomes a solid relationship going forwards, a long term relationship with your investor and that's really important for the success of their businesses. So I definitely encourage people to do the right networking, and do as much homework as possible on the investors, talk to their portfolio company CEOs, they are usually very happy to do so. What is it like working with that investor and find the right fit for you? So yes, it's about networking, but it's a very strategic targeted networking with the right people that you want on board.
What do you look for in a company when they approached you for funding? What do you look for in a founder? What do you look for in a business idea?
I think the first thing we look at is a business that really has value, that changes an industry or creates a step change in the industry. So that's really important to me, because yes, it is about scale, it is about growth and potential, but fundamentally it's about the value they will create for customers in that industry. Sometimes it means that we look at things that are a bit harder to generate initial sales in, because if you're the first one in the market it takes a while for people to get used to the idea. But longer term, I think those kinds of things will bring a lot more results.
The other side is, again, the founding team. They need to really understand their industry, know it inside out, have that drive, have that determination, and actually be willing to listen and learn from people around them. So I see our relationship with the founders as a two way street. I don't know everything. They're the experts in the industry. I can ask them the right questions, I can help them build the business because that's my expertise, is building businesses across different industries, but at the end of the day, they need to be able to listen and relate. That chemistry with the founding team, for me, is really important, because we invest at seed and Series A level and that involves a lot of time working with our companies. So that personal relationship needs to work as well.
The last element is, because we're still relatively small, we can't do hundreds of investments. So it needs to be things that really fire up my imagination, that genuinely make me get up in the morning and feel excited about working with those businesses. So we have said no to some amazing companies that have great business potential, but they're just not that interesting. So at the end of the day, sometimes with an investor it's just not the right fit from that point of view.
I think looking at your background, when you were at JP Morgan and your entrepreneurial career before you founded this fund, I think Energy looks like an area that you're interested in, is that something that continues on with your work now in terms of looking at certain companies?
I think renewable energy and sustainability will always be a key driver of things that we look at. It's definitely a big segment of the market that we look at. Also things that improves the lives of families and women and children is also very close to my heart with a young daughter myself. So it's an area that I know a lot about and I want to see a lot of change in that area and there is scope for change. It's things like residential care, it's things like education, things like healthcare, all of those areas have huge potential. In some ways there's an impact element to it.
We're certainly not an impact fund, we are a traditional commercial fund, but I like it when our companies create some kind of good in the world as well as just the pure commercial benefit. I'd love to have it both ways. But naturally, I gravitate towards businesses that do create some kind of positive good in the world. And I actually think business should be a driver of change in those areas too.
How do you feel about [diversity and inclusion] policies? Do you think that they're band aids over the issue? Or do you think that they're all kind of helping towards getting the industry into a more diverse place?
I think every little helps, yes. I am a big believer in disclosure. I think once you understand what you're looking at, the extent of the problem, it's a lot easier to focus on the solution. I also think that a lot of established VCs will take time to change their culture.
I talked to a lot of associates within the market space, I mentor quite a few of them and there is a great desire to create venture capital firms of the future that are diverse and focused on women and minorities and pretty much treat everyone as an individual in their own right. But I think investment committees, and that's where the biggest bottleneck is, they will take time to change because typically they are 40-50 year old males, here are very few women on investment committees, and I see a lot of juniors take amazing opportunities to the investment committees but not being able to get them through. They don't yet have the gravitas to push that particular button.
I think this is where people like ourselves have a chance to do it over the right way from the very beginning. Hopefully over the next 5-10 years, things will genuinely shift within the rest of the industry. If I don't have to invest in female founders in 5-10 years time, great. I will invest in whatever makes sense at the time. But my goal is to really not help normalise the industry and I think it will take a while yet. But all of those steps are steps in the right direction.
I think becoming aware of the problem already helps you change some of the elements of how you work day-to-day. So we collaborate extensively with the British Business Bank, with Diversity VC, we work collaboratively with about 30 other investors as part of a female founders pitch clinics that we run at the Google campus.
For me, that's all helping create an ecosystem that supports the right into entrepreneurs because at the end of the day, I want to get the right companies, the right founders funded so that they can grow their businesses and create that value. We do that in partnership with other investors. We can't do it on our own.
It's brilliant work and thank you so much for joining us today on you. It's been a pleasure.
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