Sifted - The problem with VC: Reason #384

Good morning there,

In any given conversation with a VC, they’ll probably mention something about their firm’s ‘value add’ to founders, and how much they help with things like hiring, go-to-market strategy or fundraising. That may be true in some cases but often the VC industry can be decidedly unhelpful. Today, news editor Tim Smith explores how investors can dilute entrepreneurs’ vision and why founders need to stick to their guns — with the help of Carina Namih, cofounder of biotech company HelixNano and now partner at London-based firm Plural.  

Elsewhere, we look at reports that delivery giant Getir is pulling out of Germany, VC fund-of-funds firm Isomer getting into secondaries and the startups trying to mitigate the massive environmental impact of AI.

Also, we’re looking for startups in central Europe seeing exceptional growth to feature on our Leaderboard. If you think your company is among the fastest growing in the region, let us know.

— Anne Sraders, senior reporter

/A message from our sponsor Notion

Startups in the Sifted community can get six months of Notion — free

Want to try out Notion but don't want to spend? Test Notion Plus out for free, with unlimited AI (a value of up to $6k).  Submit an application using the custom link below and select Sifted on the partner list. Then just use the custom key SiftedXNotion. 

Email startups-help@makenotion.com with any questions.

The problem with VC: Reason #384

Many investors are happy to tell you the VC industry is the best thing since sliced bread — even better if it’s delivered to your door in 10 minutes. Evangelists praise the sector for lifting the world’s most innovative ideas and backing risky, moonshot companies.

Carina Namih — cofounder of biotech company HelixNano and partner at London-based Plural, a VC firm run exclusively by former startup operators — seems to view it differently.

Over a Brunch with Sifted interview, she tells me that she made the jump from founder to VC partly due to her frustration with how the investment industry works and that it often doesn’t suit founders.

Namih says pitching to investors can wear down bright-eyed entrepreneurs until they end up diluting their ideas into “a weighted average” of all the conversations they’ve had with potential funders. That’s no fun for VCs either: sitting on the other side of the table, she says it often feels like founders are just “telling you what they think you want to hear”.

She implores founders to hold onto “a really strong point of view that is truly your own” — and to not let the vision that made them start their company in the first place get slowly whittled down by opinionated VCs.

Namih knows that can be hard. When she founded HelixNano in 2013, the idea of applying AI computation to biological processes in healthcare was pretty far out and untested.

“People thought I was really nuts,” she tells me. She wasn’t: HelixNano’s first AI-designed therapy is now going through human trials.

The “brain damage” she’s suffered on this journey, however, hasn’t only come from pushing tech to its limits. It’s also down to how investors treated her. She recounts how VCs would repeatedly address commercial questions to her male cofounder, even though she was the one answering them. 

At Plural she’s trying to do things differently and keep in mind her position of power as an investor.

Namih says she and her partners at the firm “think very carefully about how not to waste founders’ time”. For example, they’ll never have “junior folks who’ve never built a business” meeting companies, “as we think that really dilutes the experience for the founder”.

In the same way that founders send their investors quarterly updates on progress, Plural also sends out a quarterly email to its founders about what it’s been working on with its portfolio.

It goes a long way, says Namih. It helps founders know which partners to ask for help on specific problems.

“You're laying a bit of a breadcrumb trail for the founders to know how to make use of you,” says Namih. “One of the great talents of good founders is knowing how to get the best out of the people around them and knowing who to ask for what.”

I found our conversation refreshing in a few ways. Not least due to her distinction between backing “impactful, ambitious businesses” (using the example of Danish startup Teton that’s utilising AI to free up nurses' time) and those working in more saturated fields like B2B SaaS. 

“[As a founder] you want your investor to be thinking about your mission while they're on a walk on the weekend,” Namih says. “For us that is probably not going to be the next optimisation of ad spend.”

Read the full interview here.

— Tim Smith, news editor 

🇬🇧 UK femtech startup Elvie has raised £9.6m in fresh funding, according to Companies House filings. The company sells women’s health products including a breast pump and kegel trainer. 

• The round, which Elvie confirmed to Sifted, was raised from existing investors. Since launching in 2013, the startup has picked up $136m, from investors including BlackRock, Octopus Ventures and the UK Business Growth Fund. 

🇹🇷 Turkish delivery startup Getir is reportedly planning to pull out of all markets excluding Turkey, which could result in 1,400 jobs lost in Germany alone, according to a Business Insider report, which says the company could announce the move as soon as next month. Getir told Sifted it does not comment on market rumours. 

🇪🇸 Spanish unicorn Glovo is on track to reach positive EBITDA in the second half of this year, according to its parent company Delivery Hero’s latest trading update. 

• It’ll be welcome news for the company, which has been dealing with its fair share of regulatory headaches over its classification of some delivery couriers as freelancers. On a recent episode of Startup Europe — The Sifted Podcast, cofounder and CEO Oscar Pierre said that Glovo had “started 2024 very strong” with strong customer growth cancelling out reduced spending as the economic downturn hits consumer buying power.  

💰 London investment firm Isomer Capital is raising its first dedicated secondaries fund.

• Isomer, best known for its VC fund of funds, has closed 20% of a target £100m for the new secondaries vehicle. It will primarily buy stakes in VC funds but will also invest in a small number of private companies.
• Editor Amy Lewin spoke to Isomer principal Omolade Adebisi about the fund’s strategy — and why the secondaries market is set to take off soon. 

A blueprint for success in B2B SaaS

B2B SaaS is the business model techies swear by — but for those just starting out, how do you stand out from the pack? The most important thing: to understand your market and customers. Our latest report guides you step-by-step through this, with advice from industry experts. 

💭 AI technology isn’t only expensive; it’s also a big strain on energy systems. AI’s huge energy demands — accelerated by the rise of large models like OpenAI’s GPT-4 — could increase global CO₂ emissions by 80%.

• Numerous founders are working to address this problem, building the data centres that power AI on the side of Norwegian hydroelectric power plants to make use of surplus renewable energy, or university professors spinning out companies to build futuristic, light-powered chips that are more energy-efficient. 
• Lower power consumption will translate into decreased costs for anyone developing or using an AI system, so it seems inevitable that the tech will become more efficient — and many are hopeful it will also accelerate efforts in the fight against climate change.

💷 15 UK startups (which aren’t from London) to watch, according to investors.

📌 How to use Pinterest as a marketing tool.

👶 All the new first-time European VC funds of 2024.

🩻 Clinical trials need a revamp — could Europe lead the charge? (Sponsored by Debiopharm Innovation Fund)

🙌 EIT Urban Mobility invested in more than 100 startups in 1,000 days. Here are its top picks to watch. (Sponsored by EIT Urban Mobility)

🎙️ Amy Lewin joined the Conscious Entrepreneur podcast this week, to discuss our research that showed half of founders want to quit their own startups. To find out why, take a listen.

Montpellier, France-based BforeAI, which uses AI to predict cyber attacks, raised $15m in Series A funding. SYN Ventures led the round and was joined by Karma Ventures, Karista, Addendum Capital and the Partnership Fund for New York City. 

Berlin-based Deltia.AI, which uses AI and computer vision to support manual assembly line processes, raised €4.5m in seed funding. Cavalry Ventures led the round and was joined by investors including Merantix, Robin Capital and Combination Ventures. 

Berlin-based roclub, a platform that allows medical examinations like MRIs to be done remotely, raised €4m in seed funding. Speedinvest led the round and was joined by investors including FJ Labs and better ventures.

Cambridge-based Owlstone Medical, a breath-based diagnostic testing platform for early disease detection, raised $6.5m in funding ($5m equity and $1.5m grant funding) from the Bill & Melinda Gates Foundation. 

Strasbourg, France-based Pixacare, which is developing a medical device to automate the monitoring of wound healing, raised €3m in funding. Elaia led the round and was joined by investors including Bpifrance and 50partners.

Paris-based Edonia, which is creating plant-based meat ingredients using microalgae, raised €2m in pre-seed funding. Asterion Ventures led the round and was joined by Bpifrance.

If you’d like to submit a deal, get in touch. 

For more deals, analysis and M&A insight, become a Pro subscriber to receive our weekly Deals newsletter.

• Sign up to our specialist newsletters if you want more on fintech, climate tech, startup life and VC.
• Tune in to Sifted’s podcast, Startup Europe.
• Join the Sifted team along with 3,000+ startups, founders and investors at Sifted Summit this October. Get your ticket now!
• Join Sifted’s journalists for live Sifted Talks with industry experts, diving into the biggest questions facing startup Europe.
• Access investment-grade research on the hottest sectors, rising stars and success stories from across European tech by subscribing to Sifted Pro.
• Follow us on LinkedIn and X.