Start-ups from the perspective of investors: "It's primarily about the team"

Nina Wöss worked at the Austrian Cultural Forum in New York, the Kunsthistorisches Museum in Vienna, and saw her future clearly in the cultural sector.

Nina Wöss worked at the Austrian Cultural Forum in New York, the Kunsthistorisches Museum in Vienna, and saw her future clearly in the cultural sector.

SETTING: What makes your work so exciting?

NINA: The people! Seeing how teams evolve and how individual people reinvent products, services, or offerings, thereby changing the world on a small scale, and theoretically also on a larger scale. That's incredibly exciting.

SETTING: Do you have a concrete example?

NINA: We invested in Shpock four years ago. At that time, there was eBay and Willhaben, browser- and desktop-based options for selling things online, but there was nothing for smartphones. One of the most common feedback was "but who needs that?" Recently, I was at the Demo Day of Axel Springer, and there, a start-up mentioned Shpock as one of the established players to catch up with. That was pretty cool.

SETTING: You meet start-ups in very early stages. What do you pay attention to?

NINA: I look at how they communicate their idea, whether I understand what they want to do and where they stand. For us as a fund, it's interesting if the product or service already exists. That means the question is also whether they are already in the market or have test customers. If I find the idea exciting, the next step is to meet the people in person. And then it really depends on whether you trust them to be able to implement what they plan to do. Whether they have the perseverance, the knowledge, or the ability to acquire the knowledge. And whether the founders fit together. It's primarily about the team, secondarily about the product.

SETTING: Are there dos and don'ts in these meetings?

NINA: Do: Transparency! Be open, be transparent, ask questions. You can also ask the investor questions to get a feel for whether you are being understood or not. But otherwise, there's not much.

SETTING: And are there classic mistakes in the early stage that you observe?

NINA: It's important to know soon enough when you need to start fundraising again. Sometimes start-ups call and say, "In four weeks, the account will be empty, and we won't be able to pay salaries." That's not something you want to hear. But if you know it early enough, you can go out and look for more investors. "Always be fundraising" is true. Apart from that, it's a mistake to skimp on the team. It's better to get really good people. Because ultimately, they are the ones who carry the whole thing. Or can also bring it down. If the CTO jumps ship just before the next round, it doesn't even have to be someone from the founding team, there are many other important positions, it can lead to delays and make investors skeptical. High turnover also says something about the founding or management team.

SETTING: Finding the right people can sometimes take a long time.

NINA: Building a good team is essential. Hiring juniors is good, but sometimes you need people with prior experience. They are naturally often more advanced in terms of salary level or more difficult to reach, but in the end, it pays off to spend time on it and define employees as the biggest cost block. That's probably the most sensible thing to do in the early phase. Putting the wrong people in place will always be regretted. It's a waste of resources, a waste of time, and ultimately a waste of money. So it absolutely pays off to make sure you find the right people.

SETTING: Does having the right people mean more?

NINA: Yes! With some teams, it's really exciting to see how they develop. When we invest, start-ups usually have 6 or 7 people. Then it can go quickly. Some now have forty, fifty employees. And that's also nice, to be able to say that we have contributed to creating new jobs, speaking in terms of the economy. It's certainly not only thanks to us, of course, but it's nice to know that you're part of it and that you can initiate change in this way.

SETTING: Speaking of change. What's happening in Vienna and how do you see the two cities, Berlin and Vienna, in comparison?

NINA: Berlin and London are the most important start-up cities in Europe. Vienna has developed really well. Especially in the last five years, an incredible amount has happened. From the number of start-ups coming out of Vienna to politics. At least the word "start-up" pops up occasionally... What works well in Vienna is the first financing. But then, and that's the big difference to Berlin, once angels or seed investors have invested, there's nothing left for start-ups in Austria. Then they have to raise money from abroad. This is not necessarily bad, but it can lead to start-ups migrating or the system not maturing further. Whereas in Berlin, investors focus on Series A and later. But clearly, Berlin is bigger, more international, and it's easier to find people, also as employees or advisors. But this, in turn, means that people often hop between start-ups more frequently. I believe that loyalty is lower in Berlin. But that's a very subjective assessment.

SETTING: Are there such things as Berlin or Viennese trends in the start-up industry?

NINA: Berlin is considered a B2C Mecca. Vienna is mixed but tends more towards B2B or tech-oriented start-ups.

SETTING: And can Berlin start-ups learn anything from Viennese start-ups?

NINA: I think it's more that Viennese start-ups can still learn a lot from Berlin. Simply because Berlin is more international and more professional in some respects. The nice thing in Vienna is that everyone knows each other, but then you get into this bureaucratic story again. But the exchange with Berlin is happening. Everyone reads the same blogs, the same books, meets at the same events anyway. So the culture within the individual scenes is very similar. There's no such thing as a classic Viennese or Berlin start-up.

SETTING: Speaking of books, do you have a recommendation?

NINA: The Hard Thing About Hard Things! By Ben Horowitz! Very hands-on!

SETTING: Besides your work at Speedinvest, you also co-founded a Female Founders Initiative earlier this year.

NINA: Women are clearly in the minority in the start-up world. The ratio is not about 40 to 60 percent but rather about 15 to 5. You can see it even more clearly on panels, at event participants, and among the founders themselves.

SETTING: It's always said that finding women for events is so difficult.

NINA: At the kickoff of the Female Founders Initiative, we organized an event where only women pitched. The quality was great, there were enough applicants, and there are enough jurors who can contribute on a high-quality level. Women as speakers, founders, or jurors exist. They are just often under the radar. Sometimes unfortunately because they, let's be honest, are too shy. But if someone says, "We couldn't find a woman for our event!" that's an excuse. Then they looked in the wrong channels or tried half-heartedly. Sometimes you have to deviate from the usual paths.

SETTING: What exactly is the Female Founders Initiative about?

NINA: In Austria, 13% of all founders in the tech sector are female. That's way too little. It's about creating awareness that there is a problem and at the same time showing that there are solutions. The initiative brings together women interested in founding and women who have just founded and networks them. Also with potential female financiers, investors, or experienced female founders who can give feedback or want to work together. Women should see that it's possible, that founding a company is not "rocket science." Of course, it takes courage, but you can learn to muster it. We want to support women in this.