Good morning Sifted reader,

In the VC world, it doesn’t pay to become known as a troublemaker. The industry is small, memories are long and you never know when you might want to work or do a deal with another investor.

That means it takes a lot of bravery — or, in some people’s eyes, foolishness — to speak up about bad behaviour.

Last week, Sifted published allegations of sexual harassment by Nenad Marovac, an award-winning investor and founding partner of London-based VC firm DN Capital. (DN and Marovac deny the allegations, and the fund tells Sifted it has set up an externally-led investigation into the claims.)

Dozens of readers got in touch with us in response to the piece.

For some, it raised the question as to whether LPs (the investors in VC firms) could (or should) be doing more due diligence on workplace culture at VC firms.

We asked several investors what they thought and many said that LP due diligence — as it’s currently conducted — is important, yes, but unlikely to ever uncover something that former or current employees don’t want to share.

Why? Because it’s mostly just not in their interest (financially, or reputationally) to blow the whistle.

“People want to get jobs in VC and it's very hard to get a job in VC. When you get one, it's not in your interest to speak out when you're actually at the fund. But then afterwards, it's not really in your interest either,” one male VC partner told Sifted.

Funds can, after all, choose to withhold carry payments from former or current employees who are in their bad books.

“It’s not a lack of DD,” a female investor added. “It’s people’s fear of being honest.”

Others saw room for improvement, suggesting that LPs could demand better policies to keep whistleblowers anonymous.

“Making sure that they have the right setup internally should be part of the DD,” said the male VC partner. “It should be something the LPs ask: ‘What's your policy that allows employees to whistle blow?’”

— Amy Lewin, editor

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B2B SaaS rising 100 — our latest ranking

We’ve listed 100 B2B SaaS startups across Europe and Israel that will likely join the ranks of the $1bn-plus valuation startups. They’re tackling some of the industries’ biggest challenges, from finance to supply chains.

Who made the cut?

🏴󠁧󠁢󠁳󠁣󠁴󠁿 Scottish alternative meat startup ENOUGH has raised €40m to scale its production of mycoprotein — a vegan protein ingredient that comes from fungus, which can be made into alternative meat, seafood and dairy products. The investment was led by climate tech VC World Fund and CPT Capital. The University of Strathclyde spinout has now raised more than €95m, making it Europe’s best-funded mycoprotein startup.

Funding in french tech from 2018 to 2023

Despite harbouring ambitions to use the startup downturn to come out on top in Europe, the French startup ecosystem has been battered like most of the continent this year. Year to date tech funding has nosedived 61% compared to last year.

The country's tech scene is also dealing with a debate around its diversity and inclusion record. Foreign workers make up only 20% of startup employees (they make up 50% in London), and the nation's promising startups are staffed by founders who graduated from its most prestigious universities. Sifted's latest briefing digs further into French tech in 2023, and unpacks the trends you need to follow, the country's most active investors and the startups to watch.

🇬🇧 The city that brought us The Beatles is having a rough summer, and we’re not just talking about Liverpool FC. At £1.22m the median valuation of startups in Liverpool is the lowest of any city in the UK, according to new data from PitchBook. Southampton (£5.01m), Oxford (£4.67m) and Cambridge (£4.41m) come out on top. It’s a similar story for total VC deal value. Startups in Liverpool have raised just £150m since 2012. In London — which far outstrips the rest of the country — they’ve raised just over £85bn.

💬 “If I wasn’t Black, would they have backed me? If I wasn’t Black, would this fund have hired me?” Former Atomico angel and founder and general partner of WarwickTECH and Simplify, Harry McLaverty, shares why Europe's venture diversity machine is 'out of control'.

📈 The 10 fastest growing fintechs in Europe

Inside the KPIs of 3 chief product officers at European startups

You’ll find them at the heart of any startup’s product roadmap and they’re the person that keeps the tech team whirring. But what exactly does a chief product officer do? Product leads from Forto, SumUp and WeSchool unpack their roles and share the KPIs that underpin their success, including:

Understanding how hyper-specific metrics drive wider company KPIs — which at SumUp includes bookings vs revenue, annual recurring revenue (ARR) and churn. “Take any KPI and you should start unpicking it to get into the underlying metrics that support it," says SumUp CPO Anna Kuriakose.
Performing an excavation on the metrics that are lagging — which could include figuring out why churn is happening, and highlighting the indicators that imply a customer is likely to churn based on how they're using your product.
Realising there's no one playbook — "In startups you have to build things, break things on the way, learn from your mistakes and iterate, iterate, iterate," says Wojtek Strzałkowski, head of product at Italian edtech WeSchool. "And that will require you to be a little bit more resourceful when it comes to metrics that you want to employ, and when it comes to people you want to hire.”

More startup life stories from around the web: How to manage the climate-conscious worker | Shared workspaces are growing up

For insights on how (and how not) to run your business sign up to Sifted's Startup Life newsletter, dropped into your inbox every Wednesday.

How are climate tech startups securing funding? | August 30

Join Sifted’s Freya Pratty and Dr Clea Kolster from Lowercarbon Capital as they discuss the future of climate tech investment and the strategic choices VCs are making.

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Join our early-stage B2B pitch event | September 5

We’ll be showcasing the very best early-stage B2B startups at our next pitch event, exclusive to Sifted Pro. Join us virtually on September 5 at 12:30pm BST.

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The VC slowdown: Is it set to get even worse? | September 7

The European startup ecosystem has had a slow — and tricky — summer. As we look ahead, will things finally pick up, or continue on a downhill trajectory? Join Amy Lewin and Hussein Kanji from Hoxton Ventures as they explore what’s next for venture capital.

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