Backed is a VC firm that operates in close relationships with the founders and companies it invests in. The firm aims to bring a community-driven ethos to the European venture world and has recently set up a community of high-impact individuals called “Scouts,” who find and connect world-changing talent to founders in the Backed portfolio.
Daisy, reveals in an inspiring interview, the secret sauce to setting up a thriving portfolio community where members mutually benefit each other, and shares insights into how the Scout network has been of significant importance to Backed.
1. Sompani Talent Communities: Daisy, great to get the chance to chat with you. The last months have been tough for the tech ecosystem, and many founders had to rethink their way forward. Did you feel there was more cooperation amongst founders you invested in during these difficult times?
Daisy: Oh, that's a really good question! I think so actually because we launched our webinar series around this time, and we had been worried for a while about launching too many things. Our founders are really time-poor, and we never want to be that VC that's making them “show up to stuff.” But as soon as we did, the uptake was so significant. I believe this is actually because they wanted to come together and support each other.
The first couple of them didn't even really have a clear purpose or format. Later on, they were about specific topics, but the first few were just like, “let's all get together and talk about the impact of COVID” so they all jumped in to hear from each other to feel less alone, to share and, to be supportive.
I think that in general hardship, crisis, or chaos usually have this unifying factor because people don't want to do it alone. And they want to be of service to each other. This has been a really strong galvanizing moment bringing them together.
2. Sompani Talent Communities: What has been the secret to building a thriving ecosystem around your portfolio in which founders support each other?
Daisy: For us, it has to do with the fact that we are really upfront, when we meet founders, about the fact that community is really crucial to us. We talk about it, point out how it’s our strength and that it's one of the best things that we're bringing to the table. I think that sets expectations and the sort of founder who's interested in that is also the sort of founder who's willing to join a community and participate in it. And of course, participating in a community goes hand in hand with being willing to support others in the community. So I think there's a sort of self-selection.
Beyond that, we also try to constantly find bases on which to link our founders up. Whether it’s picking four or five founders that are in a particular sector, or in an archetype in their business, we may put them in a slack or WhatsApp group, set up a regular call structure, create buddy programs, or more ad hoc, we link founders up.
Instead of trying to be all things to everyone, it’s realizing that nine out of ten times it's always going to be better to get a founder to talk to another founder than it is to solve it yourself as a VC. That’s how it is for us and I suspect that's what everybody's doing in VC platform support.
3. Sompani Talent Communities: Backed partnered with a community of bright individuals called Scouts. What was your initial goal of setting up the Scout community, and how did it evolve?
Daisy: That’s actually a very interesting time to ask this question! We initially wanted to gather people in the ecosystem that were super connectors in the traffic of deal flow but were not investors, angels, or part of any pre-seed fund. This could mean maybe they are journalists, who interviewed a great number of founders because they are community leaders or maybe because they run a coworking space. Whatever it may be, these are people that are well-placed and who tend to see things before any other investor sees them, perhaps because they have a personal relationship with the founder.
Apart from the basic value exchange, this person probably wants to have a VC that they can send these founders to, because that’s a way for them to be supportive to the people that they care about. If you are a coworking leader, community leader, journalist or entrepreneur, you generally would prefer to send the deck to someone who you can trust and respect when someone you know is looking for funding.
Beyond that, we also wanted to understand if building this community and integrating it into Backend can also help expand our thinking and do our due diligence in different ways, by bringing a rich tapestry of additional perspective into the fund, as well as if it can help us boost our brand and reach across the ecosystem, by having these ambassadors vouch for Backed in the public.
From us in return, we thought, how do we bring these people closer to each other so they get value from the community, by interacting and engaging with one another? Since they are a group of people with different disciplines and different backgrounds, we knew there was a good basis for them to meaningfully help each other, from genuine emotional support to brand development and network building.
The piece that we could really bring to the table, as a member of this community, was VC learning and development. Being in this ecosystem often means a need to understand venture, either for their own sake or for the sake of the founders that they want to support. Opening up our IC and doing a sort of communal triage, sending detailed feedback, doing salons that focused on VCs and interesting questions within Venture Capital was what we could bring to the table and also be a value add in the community.
We realized that while the critical archetype within our community should be these non-investor nodes, it’s also important for us to bring more angel investors and more mature and seasoned investors. Until now we had more of a formalized community structure around our non-investor nodes and dealt with angel investors more ad-hoc. We realized it would be a bit silly if we built an incredibly robust and scalable community structure and kept it for only one portion of our sourcing network when we can really extend it and have all these different groups together. Building the community as a platform is something we are embarking on now, where the person can choose to stay and pick and choose what he or she wants to engage with. Currently, we are going to make sure we proactively bring into the fold of this community some of the other angels.
4. Sompani Talent Communities: European VC firms started assisting their portfolio companies with platform support only a few years ago. Do companies expect platform support as an element of VC investment now?
Daisy: I would say definitely! I think it's twofold. First, anything that becomes commonplace, or even just true across a majority of offerings, you will begin to expect as a customer. This is just true in any kind of commercial exchange. If you see a platform being offered in six out of nine cases then those three are going to look really weird to you unless there's a really good reason. Anything becomes normal eventually if it's prevalent.
Another side is that there is a shift in general how a VC sees itself and how the founder sees VCs. I think the idea that you can raise money from multiple sources, crowdfund really effectively, bootstrap incredibly profitably and continue to scale, and command money from beyond Europe, has completely shifted away from the power imbalance where VCs are on the top and founders take what they can get. Now founders are your customers, and you essentially have to serve them to be able to convince them to take your money.
As there is already a lot of capital at an early stage, it's very competitive now to be an early-stage investor. If you don't have a strong value proposition why someone should take your money when there's an equivalent bag of money over here, plus value added, then it is unclear to me how you would win that particular persuasion. I think, in a nutshell, it has become an expectation. And I think this is a good thing for shifting the power bottoms and making it a more horizontal exchange between investors and founders.
Sompani Talent Communities: Thank you very much for these insights Daisy, we are excited to watch your progress with the Scouts network in the coming months.
Read more about Sompani Talent Communities here.