Cryptos, cross-board investing, and diversity, here are some interesting learnings from GROW Invest 2022
For the second year in a row, we were proud to be co-creators of GROW Invest. It is a collaborative gathering for venture capitalists, angels, and startups to reflect on investment trends and best practices, challenges plaguing the startup world, and solutions that can make the ecosystem hopeful for a positive economic outlook.
It is hosted by Mindspark during the H22 City Expo, 35-day-long sustainability and innovation-driven smart city exhibition. Given the current trending topics that keep everyone on toes, the sessions started with exchanging notes on ideas on the future of crypto, blockchains, and NFTs. As the day progressed, the focus shifted to cross-border investments and biases to consider while investing.
Pane #1 Cryptos, NFTs & Blockchain - what lies ahead?
Crypto-curiosity is killing the investment world and everybody wants to be on top of their games. The panel allowed us to discuss the prospects and technicalities of blockchain integration into businesses and opportunities for investing in cryptocurrencies and cyber security.
Meet the panel:
Liselott Lading, Business Consultant at Stratiteq and a change manager with digital transformation; Mattias Tyrberg, serial entrepreneur and Co-founder at Meme.com, was named by Breakit as one of the blockchain companies to watch out for; Martin Mazur, 'software junkie' and CTO at 1337; Dima Sarle, serial entrepreneur, Founder at Tallin-based #WeeklyAction Club. #WeeklyAction Club, a weekly newsletter on self-development;
Moderated by Karsten Deppert, Founder, Mindpark;
Here are some of our key takeaways from the panel: speaking about the prospects of exploring crypto, Dima personally wants to explore how companies organize people. Given that we are on the cusp of a new way of organizing businesses for the first time in many years, it will be interesting to see how we build businesses and organizations of all kinds, Dima Sarle explains.
Crypto jargon is unfamiliar territory for many. Matthias Tyrberg explained that the token is a possibility of both being currency or goods or a good step to trading in a digital way. He explains that NFT as a type of token or digital goods that one can sell. It could be a game, a sword, or an artwork. He explains DAO (Decentralized Autonomous Organization) as an organization built by the community. It is not owned by anyone. It does not have centralized ownership controlling it. It does not have a physical location.
Defining Web 3.0, he continues, “There are so many different definitions of this. But if you think about the first version of the web, it was you read the information on the internet. The second version that most of we are using right now - the reading, the writing, and sending data. And third version is also own part of those data."
Responding to the status of crypto amidst turbulent times, Dima Sarle reassures that ‘it is the best possible time for crypto’. He says, “I love when crypto falls and goes down to zero, that's awesome. I believe that when it goes to turbulent times, that's when people show interest in blockchain technology and want to continue building something valuable. Unfortunately, the prices are still too good and people are still going the scamming way and building projects that have zero value to the world. But I think it filters out a lot of the people who are not doing the right thing. So for me, it's a very exciting time”.
In an interesting analogy, Martin Mazur compares the status of crypto to the Wild Wild West - a world full of risks but many possibilities, literally like the gold rush but nobody knows whether it is good or bad. Adds Liselott Lading referring to crypto as the financial system of the future of the internet, “It will be interesting to see how Web 3.0 will evolve and change individuals and the society."
While the panel agreed that there are many questions still left unanswered, it will be interesting to explore the possibilities that bitcoin and blockchain technology will throw into the market, especially towards building companies and introducing regulations at large.
Panel # 2 - Differences across border - early-stage perspectives
Venture capital may no longer be a local industry. Though rewarding, investing in cross-border markets comes with a lot of hiccups - geographical risks, legal and administrative red tapes, and lack of knowledge to begin with.
GROW Invest takes a look at investing patterns across the Nordics and as close as Sweden and Denmark along with investing within the other European countries.
Meet the panel:
Filip Larsson, entrepreneur, business angel, and real estate investor; Gulnaz K. , CEO and Founder at Copenhagen based Easysize; Kenneth Dambo, Tech investor at Copenhagen based Dreamcraft Ventures; Kilian Kaminski, Founder at Vienna based refurbed; Moderated by Alice Larsson, Innovation Advisor at Almi Företagspartner Skåne
Talking about cross-border investments, Filip shared that he has not invested outside of Sweden. “As an angel, it can get complicated to work outside of Sweden considering legislation and regulations. Working in Sweden is relatively fast and hassle-free since I have been working for the past 14 years in the industry.” says Filip Larsson.
On the other hand, as an angel investor, Gulnaz shared that her investments are not limited to Denmark but Europe. She explained that her investment philosophy did not match at the right time within Denmark. “I didn't find this (legislation) to be difficult from a legal perspective. Because as a small angel investor, I am not leading the rounds and therefore, I do not have to take care of legal matters. My focus is more on the companies that fit my investment focus or philosophy”.
Addressing the VC shift, Kenneth highlights that, “Borders are disappearing. I don't think that that's the main limitation anymore, especially from an operational perspective, and because of COVID, and remote work, people want to work from different countries. Previously, investors had a local network and therefore, saw local opportunities. Now, this is shifting. I see more and more VCs and mainly angels shifting in a borderless direction”. Coming from a comparatively smaller city like Vienna, Kilian highlighted that raising money gets challenging locally and it is a must to go after international funding, especially at Series A+.
Coming from outside Denmark, Gulnaz added that it was a challenge for her since she had a relatively small local network. 90% of the investments in her company come from outside Denmark. She concluded that it was important to take advantage of the international VC network and understand what kind of investments to look for.
Panel # 3 - Implicit biases in investments
It often seems like investors have everything under control and have confidence in their decisions when they keep hitting the jackpot. But when we peel back the layers, empirical research reveals implicit biases that must be combated to make investment decisions. And let's not forget gender discrepancies. Can we live with biases that hurt our judgments while investing?
Meet the panel:
Charlotta Tönsgård, CEO and Founder at Kind App, a professional digital space for patients; Tommy Andersen, Founder, and Managing Partner at byFounders, Copenhagen-based community-powered early-stage VC backing impact-aware founders; Alberte Katrine Schmidt, Investment Manager at PreSeed Ventures, a Danish early-stage VC living well over 400 journeys; Sami Niemi, Partner at Spintop Ventures, a VC backing innovative software technology companies in the Nordics;
Allow Ida Herbertsson to set the tone for the panel. In her words, “Long, long time ago, we were all biased to some extent. It was crucial for survival. But, it's not the case anymore. So, what role does bias play when we are investing in any investment decisions that we make? What responsibilities do we have as investors, as founders? And what can we do to overcome a look beyond our biases?”
When asked how biases affect the investment and startup industry today, Charlotta Tönsgård opened the discussion by agreeing that we all have biases; what is important is how quickly one recognizes those biases. According to her, biases are dangerous because it means that decisions are not being made rationally. Tommy Andersen agrees with Charlotta and his advice would be to push those aside when sitting across from a founder or startup. "From an investor's perspective, the more diverse the team, the better, because you are presenting your startup as a team with different viewpoints and perspectives on one thing”.
Alberte Katrine Schmidt tells us a mixed team is more likely to lead to a pitch and an investment and therefore receive positive feedback from PreSeed Ventures in terms of investments. When we talked about measuring diversity, Sami Niemi brought everyone's attention to the Diversity Commitment, a process used by the Danish investment community to measure and track gender representation on an annual basis. Sami emphasized that 9% of funds in the ecosystem sign up to this commitment to perform better and be accountable in terms of measurability.
Concerning addressing biases during the economic downturn, Charlotta shared that in terms of diversity perspective, there won't be any major setbacks. Tommy added, “ Last year, there was so much FOMO investing that we fell over each other's legs to invest. And that was stupid, honestly and we were part of it, too. I think there's a return to substance and timing and time to reflect on the core values of the company.”