Jessica Rameau, Fund Manager for Wellstreet’s first Ventures Fund, gave an interview for the blog Unicorn Nest which was published on the 26 of August 2020, written by Roman Bdaitsiiev. Here’s an excerpt from it, focused on what are our offers.
JESSICA RAMEAU (WELLSTREET): I DON’T THINK YOU SHOULD DO WHAT YOU LOVE. I THINK YOU SHOULD DO WHAT YOU ARE GOOD AT
What industries are you interested in?
We are more defined by stage and type of company, rather than sector. We invest at a really early stage: from an entrepreneur with an idea, up to a Series A. We like to co-build companies together with the founders and entrepreneurs.
We are looking for companies that are capital efficient and can commercialise quickly, and reach positive unit economics without needing to be scaled globally before they are financially sustainable. That is really what defines us, rather than particular sectors. We are interested in many different sectors, with perhaps a special focus on ecommerce and fintech, since we have a strong track record in those areas.
What geography of companies are you interested in?
We are currently focused on Scandinavia. We would go out of Scandinavia if we see something that can essentially become global very quickly and has no real competition in Scandinavia today. The company might also be headquartered outside of Scandinavia, but if it’s targeting Scandinavia as one of its primary markets, then we will consider it.
At what stage of the company’s development are you investing?
In Wellstreet Ventures, we invest from idea stage up to a Series A round.
How big is a check you usually issue?
Typically between 50,000 up to 500,000 euros as a first investment, with then funds reserved for follow-ons.
What are the requirements for founders as an investor?
We like to see founders who have experience in the market or the industry in which they are launching a new product or service. Their professional experience should be tied to the problem that they are trying to solve.
Another key criteria is that Wellstreet can provide them with something other than cash, that another investor can’t. In other words, The Wellstreet Fit. We like to see how, as Wellstreet, we can provide them with an unfair advantage, aside from just cash.
What percentage of ownership of a company is fair to take for investment?
We invest at quite an early stage, so our target for a shareholding is usually between 10 and 20%.
What do you want to see in the company’s product?
We are very customer centric and approach our investment with the customer or user’s experience front of mind. It needs to be better than any alternative, the gains or outcomes for the customer need to be very clear, and the product and the way it is provided needs to be sustainable
What is your due diligence procedure and how long does it take you to cover the whole way from the first meeting with founders to contract and check to sign?
It depends on the state of the company and the complexity of the technology. We would probably have a handful of meetings in total, with me and then one with another partner at Wellstreet. Then perhaps a meeting with somebody from within our network who can help us assess the company and its potential, if knowledge of a specific sector which we don’t have in house is needed. Then our committee makes the decision to invest. After that, we finalize due diligence with the founding team. There might be a little deeper dive into the tech. But mostly it’s legal and financial due diligence and since they are early stage, then that is done relatively quickly. We could invest as fast as 4-6 weeks. We don’t have external dependencies. But if the founder is bringing in other investors, that can take them a while to round everyone up.
How startup teams usually find you? Do you wait for inflow or scout for interesting ideas and perspective teams?
It’s a combination of all different channels. We have an application form on our website. I also make sure I am visible in the startup community and make it very clear what we do and don’t invest in so that it’s easy for people who are in our target group to approach us. A large part of our dealflow also comes from referrals from our network, and we have a well-known brand in our ecosystem and many co-investors who send qualified opportunities our way.
Have you ever rejected a startup and then regret it?
Not yet. I think even if there is an excellent startup, but you have to walk away for whatever reason, you always need to know why you said no. Even if they’ll become successful, you’ll know that at that time it wasn’t the right company and it wasn’t the right deal for you.
Has your VC approach changed after the COVID-19 started?
No, quite the opposite.
As I mentioned before, we like to support companies to commercialise fast and in the right way to achieve sustainable financial success rather than companies fuelled just by capital and pursuing unsustainable growth. The former tend to be much more resistant in times of crisis because they manage their cost as their business actually grows. We have been proven right during COVID, and we think that those are the companies of the future.
With whom would you prefer to work rather, with Steve Jobs, Mark Zuckerberg, or Elon Musk?
I think you need to add a woman to that list! 🙂
What books/films would you recommend to a startup founder?
When it comes to reading for work, I read more short-form than books. I subscribe to several publications, newsletters, etc. Among the publications I would recommend for founders, there is Wired, Sifted and CB Insights.
Your free advice to founders
A lot of people say, do what you love. But I don’t think you should just do what you love. I think you should do what you’re good at. Find where your skills and experience lie. You need to be passionate about what you do, of course, but really think about where your key strengths are and where is the best place for you to make a unique contribution.