encourageventures: Powerful Women with a Common Goal
More female investors, more female-led start-ups. encourageventures has a mission: It will connect female founders to female investors, mentors, opportunities. We talked to Co-Chairwoman Ina Schlie and co-initiator Alexa Gorman about their newly launched investment network
The female start-up scene has been rather stagnant for many years. Only about sixteen percent of all German start-ups had a woman on their founding team last year, and only four percent were founded exclusively by women, studies show. Why is there so little movement?
Ina: For one thing, the VC world is very male-dominated. If you have to deal exclusively with male investors as a female founder, that may be a deterrent – or at least not exactly motivating. At the same time, representation is a fundamental problem in the German economy as a whole; the proportion of women in management positions is quite low in companies too. So with encourageventures, we set out to make the start-up scene more diverse. To succeed as a female entrepreneur, you need a strong network with experienced female investors who can provide sound expertise. We offer all of that. By the way, the meaning of our name is twofold: On the one hand, we want to encourage women to become founders, but at the same time, we also want to encourage them to invest. More female start-ups and more female investors – they go hand in hand.
How did the idea come about?
Ina: The initial spark was when I invested in "Tandemploy", along with four other women. I was approached so often after that. There are quite a few women who have funds and don't know how or where to invest them: That connection is missing. We bring women with money together with women who need money. It’s totally simple, actually. Yet this kind of platform didn’t exist before.
Alexa: What is unique about it, in my eyes, is that all the women bring along excellent expertise and contacts. And this access to female experts, knowledge, and a network that is willing to share its insight and open doors, is infinitely valuable. With those resources, start-ups can access the right opportunities to grow faster. They can receive support on different topics, from finance to sales, because they have women with years of experience by their side.
Are there any investment areas that are particularly interesting to you?
Ina: We discussed this aspect for a long time, but then the development phase took over. As of today, 60 women are part of our association "encourageventures". And counting. This means that we cover not only many industries and sectors, but also that our participants have different competencies within these branches, be it sales, operations, and so on. When it comes to picking a field, we’re agnostic. We are so diverse that we don't need to limit ourselves in terms of the start-ups’ business models. We focus on the business part and see which ventures have a better chance of success. Each application is evaluated by a sounding board, which then decides whether to invite them to pitch.
Alexa: I think the key differentiator is the quality of the start-ups. At our Pitch Nights, we have top-class women in the room, so we too have to make sure we present top candidates with great potential.
What are the decisive criteria in selecting start-ups?
Alexa: First and foremost, the team itself, i.e. its composition and degree of expertise. We ask ourselves: Can we trust these founders to achieve major growth? How good is the solution or product they offer? How do they differentiate themselves from the competition? What is the unique selling point? Have they had any initial successes or attracted customers already? But of course, this last aspect does not apply to the seed phase, when it's more about potential. With some of them, the idea is good in principle, but they still need to work further on the specifics, in which case we might provide them with a mentor. If they make it to Pitch Night, then the final question is always what they need. Is it funding, could they use some mentoring, are they looking for a distribution channel? That's exactly where we offer our help.
As of the date of this interview, you haven't even yet launched your platform. How do potential founders find you?
Ina: Even before the official launch, we have been approached very often. This usually happens through our networks. We also have many active female investors on board, such as Martina Pfeifer, who has her own investment firm. So we already have very good connections in place. In the future, we will also be able to create partnerships through our website, where the start-ups will upload their information.
What would you consider a good result at the one-year mark? Have you defined any key numbers or KPIs?
Ina: Honestly, our KPIs are in constant evolution. We are overwhelmed by the response. If someone had told me a month ago that we would already have 60 members before the launch, I would have called them crazy. And who knows, maybe it will be 200 by the end of the year? Therefore, I think it's best to put a pin on the question of KPIs for the time being and concentrate on our mission: bringing more diversity to the female investor and founder scene. What will be important, however, is the amount of investment. As well as the encourageventures association, we are planning to set up a VC fund in cooperation with Auxxo and other top-class experts from our network. The question is, how much can we raise? How many major investors can we attract? At the moment, we’re aiming for a range of 100 to 200 million euros. Because – and I would like to emphasize this – as investors, we are naturally also interested in generating returns. We’re not a non-profit company. And there is evidence that it pays to invest in female start-ups. According to a study by BCG, the return on investment is higher. When you invest in a female-led start-up, you get 78 cents for every dollar invested, compared to 31 cents for male-led start-ups. That's more than twice as much.
On a global level, are there any role models for your company? And to what extent do you plan to internationalize your search for start-ups?
Alexa: We are open to it. At Pitch Night tomorrow, for example, one of the candidates will be an African company. About role models: Through my work at SAP, I know a few similar initiatives from the U.S., such as the Golden Seeds, the Pipeline Angels, or the 37 Angels, whose goal is to promote diversity in a broader sense. But in Europe, and especially in Germany, there are few comparable platforms. I think that also explains the success of encourageventures.
Ina: What makes us so unique is that we accompany the start-ups holistically and sustainably across all their life cycles. There is nothing like that in Germany.
Your initiative was born during the pandemic. Is that coincidence or serendipity?
Ina: We started in October, but virtually, none of us had ever met in person. And the concept too was created completely remotely, we worked with design thinking methods and other agile tools – like a start-up. The pandemic helped us to adopt this working style rather than hindering us.
What has been your biggest wow moment so far?
Ina: For me, it was when I first saw a name on our network list that I didn't know. That showed me that our project had started to run on its own legs. We had hit a nerve in our industry. And the growing size of our network had another important consequence: It meant we could represent different perspectives. We have no intention to speak with one voice. On the contrary. And there’s one last thing I would like to emphasize: our strength is our independence. There is no VC fund or investment bank behind our project. That's a big advantage.
Alexa: My wow moment was our first Pitch Night. That event reinforced my belief that we really were making a difference with encourageventures. We raised all the seed funding for a start-up that night and provided the founders with mentors and other investors. The atmosphere was great that evening. It was one of those moments when you realize: We're onto something.
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