Meet Francesca de Quesada Covey, partner at TheVentureCity
TheVentureCity is headquartered in Miami and Madrid and invests in EMEA, the US, and Latin AmericaRead more...
Venture capital used to be a cottage industry, with very few investing in tomorrow's products and services. Oh, how times have changed! While there are more startups than ever, there's also more money chasing them. In this series, we look at the new (or relatively new) VCs in the early stages: seed and Series A.
But just who are these funds and venture capitalists that run them? What kinds of investments do they like making, and how do they see themselves in the VC landscape?
We're highlighting key members of the community to find out.
Azin Radsan van Alebeek is co-founder and Managing Director at Emmeline Ventures.
Alebeek has been charting her own professional path across the US and Europe for the past 30+ years. As an executive and board-level advisor, she draws on out-of-the-box thinking paired with compassion, bravery, and candor.
She is an enthusiastic and intuitive educator, often finding herself in intimate conversations with strangers or close peers, uncovering their full potential and accelerating their growth through listening, empathy and curiosity. Having lived various lives herself, she knows that the pathways to fulfillment and purposeful impact are infinite. She is dedicated to providing women the knowledge to be financially sovereign.
VatorNews: Tell me about Emmeline Ventures, your philosophy and methodology and where you fit into the venture ecosystem.
Azin Radsan van Alebeek: We are three women of color and we met about 18 months ago via a Pipeline Angels event; it was a bootcamp and we had a long weekend of all virtual meetings. Pipeline Angels’ tagline is, “disrupt the VC ecosystem,” which attracted all three of us from the different points where we were at that time because the VC ecosystem, as you know, is funding the future. If 97% of the future is being controlled by white men, no offense to them, then they are holding the dollars, they are funding startups, which are primarily 97%, again, white men, solving pain points and problems that they know well, which means that our collective future is starting to skew. We felt that's just wrong because women make up 50% of the world and our pain points are not being well represented because it is not a conversation that that 97% want to talk about, that they know about, it's not their lived experience. It's just a very natural bias and we thought, “it is about time that we get involved and start funding the future that is going to have a significant impact for us and half of the world.” Most importantly, once you fund women, you make the world better for everyone, so it's this huge win-win.
That, in a nutshell, explains what our passion is: it’s our own lived experiences, which also cross different cultural backgrounds. We've entered this at different decades, so I'm in my 50s, Naseem is in her 40s, and La Keisha is in her 30s, and even that informs a different viewpoint from the female perspective what we know, what our experiences in the workforce have been, and what our experience is with different services and products that we all want.
VN: People talk about femtech like it’s a niche space, but I always think, “that’s 50% of the population, how is that niche?”
AA: Let's add that it's 50% of the population and that everyone enters into this world because of femtech. Maternal care is a touch point for everyone. My father is a former OBGYN and I have three adult children, two of whom I delivered in the Netherlands and one in the US, and so my exposure and experience is also global on how healthcare is delivered to women, and how different medical systems work. One of our partners has adopted, one of our partners just delivered a month ago, so maternal care is an area that we're fully focused on, but it's not only maternal care: it's all the pre-stuff, and all the post-stuff, and it continues through the menopause stage, it's the entire lifecycle of a female. In healthcare, so many studies have been conducted only on men, and actually only on white men, for a long period of time and we know that our physiology is different, and medicines behave differently in female bodies and in people of different cultures and of different ethnic backgrounds.
We have a beta fund that the three of us have invested our own personal capital in since meeting 18 months ago and we very quickly realized, “Hey, this is something that really excites us, we really enjoy working together, there is a commonality of thought approach, of ethos, of conviction, of passion.” Our working styles are slightly different, and our experiences are slightly different, but they overlap really, really well. And so, we have a beta fund of 13 companies that we invested in along the same thesis that we're using for Emmeline Ventures. Our deal flow is coming from a number of different sources: we've been building partnerships with other VCs, we're actively involved in accelerator programs, incubator programs, with a few professional networks. Through one of these, we came across a company called Infiuss Health and what they're doing is helping big pharma in the U.S. source and pull together databases of patients in Africa to allow a broader cross section of sample groups to be in clinical trials. I mean, it's brilliant: they need to start testing their products and medicines on broader groups, they don't know how to do it, and here's someone who's giving them a way. Africa is huge: it includes the size of Europe, Asia, and parts of South America, and a number of dialects and different types of people. The founder is a wonderful woman who's been working in this area.
VN: So, obviously healthcare is one area for you. Do you have other verticals that you'd like to invest in? Or are you more of a general firm investing in female founders?
AA: It’s a little of both. Our first cut is female founders; we're really focused on that and have passed on deal flow that looks really interesting, and looks like it could make a lot of money, but there's no female on the C-level, or someone who's really steering the ship. If there is a male-female duo, that's fine, we just need a woman who's in a decision making seat. And then we're looking at femtech, FinTech, and sustainability.
Femtech is an area that's really booming and we have a number of investments in that space, and we're still looking to broaden out: we're specifically looking to get involved in menopause, as it’s something that's on the top of my mind, personally, but I feel like it's also something that's been underfunded for way too long and has too much impact. We also have been looking strongly in sexual health and wellness, and are close to closing a deal in that area as well. And so, we feel we are pretty well spread out in the femtech space and have a number of good plays that we're really happy with.
The FinTech space is where we really want to start focusing next; our first investment, Clutch Wallet, is in that world, but we need to find more opportunities. As a personal banner that I throw out there, there are two things for me that women must have to have gender equality: financial sovereignty and sexual sovereignty. Hence, two of our pillars are strongly aligned with my personal ethos. And then in sustainability, we have been looking at companies primarily involved with media bias; changing the narrative and rewriting the code is something we talk about a lot. We have Rebel Girls as one of our investments out of our beta fund portfolio. They are rewriting stories that young women read; if they read it, they know they can be it. And so, they are writing books, they have an app, podcasts, video games, they will hopefully soon be releasing some movies and films; basically, they're going to become Disney, but telling the story in a way so that young girls know that they can be anything, and they can be in charge of their own destiny, rather than waiting for that Prince Charming, as lovely as he is, to come in and save them.
VN: What’s the macro trend that you’re betting on?
AA: I'm going to answer that this way, which is not really a macro trend, but in a way it is. Women founders who have been severely underfunded and when they are funded, they're funded at much lower levels. Women founders, thus, have been extremely efficient with their capital. So, in my brain, a macro trend is finding those overlooked women, and they're still an excellent bet because they are working twice as hard for half as much. That is one way to answer your question.
Other macro trends are going to be Web3, crypto, and, as I mentioned, some healthcare in the menopause area.
VN: Are Web3 and crypto spaces that you're going to bet on going forward? In the future you'd like to also invest in those companies?
AA: Yes, definitely. So, Clutch Wallet is definitely right squarely in that space. They're all about creating a wallet that is more attractive to women. The crypto space is, just like VC, heavily dominated by men. The discourse channels are in the language and lingo of culture of a certain type of male, not all men are going to be attracted by that, but certainly it's not attractive to most women. And so, Clutch Wallet is creating a space where women can enter, feel comfortable, where the dialogue is respectful and encouraging and supportive.
VN: You had mentioned your beta fund, is that what you're investing out of currently? What's the size of that fund and how many investments do you make per year?
AA: We have finished funding through that vehicle. So, that has 13 investments in it and it's just under $500,000. That was our personal capital that we invested in, so the checks are small; they've been $30,000 to 50,000 and they have been really at the pre-seed and seed stage. Our last investment was last month, so we've been making them from March of 2021 until March of 2022. Three of them are well on their way toward a Series A, four of them are exploring acquisition discussions. So, we're feeling very positive about that.
VN: Since you've deployed that fund, are you now raising a new fund and is that going to be a VC fund?
AA: Correct, exactly. That was our private capital fund, we've closed it off, and now with Emmeline Ventures we've fully registered and incorporated in a VC fund way, so that our beta fund is invested under a different LLC and under a different partnership, just to be clear.
VN: And so, you're currently raising that funding? Can you tell me what you want the size of that fund to be?
AA: Yes, absolutely. What we're looking for with this Fund I is to raise a sub-$10 million fund and we're very deliberate about that number. We have three wonderful advisors who work with us actively, because of what we're investing in and there's some pushback from them because there's so much need, and there's so much opportunity. So, they keep asking, “why are you not raising more money?” and we keep pushing back and there are two main reasons for. one being, and this is strongly in our ethos, that if we want to change the VC landscape, that involves three different constituents: it's VCs like us who are bringing more women in as VCs; it's bringing more women in as founders, which a lot of people are focusing on; and it's bringing in a broader base of LPs. Again, in the LP community, women are underrepresented, as are people of color. One of the issues is, in addition to having to be an accredited investor, you have to have the network to know about venture investing and you have to be willing to write minimum checks that are often really large because of the economics of the fund; if you're going to raise a $50 million fund, and you can only have 99 LPs, well those LPs are writing big checks. So, we deliberately said, “Let's do a sub-$10, because then we can have a larger number of LPs, which means we can have our LPs write smaller checks and this can be the fund for emerging LPs, if you will, and an opportunity for them." They have to be accredited, but they can still write the smaller checks, start learning and growing with us.
Secondly, given our portfolio strategy of being in the pre-seed and seed stage, writing checks between $50,000 and $100,000 across about 20 companies, saving half of our fund for follow-on rounds, the economics of it mean we shouldn't be raising that much more than a sub-$10. You can throw lots of money and you can get lots of money, but that does not make things better. Oftentimes, you can drown in it and not actually propel yourself forward well.
VN: Since you're investing in pre-see and seed, I'm assuming those are very, very early in their lifecycle. So, at that point, do they actually have to have any numbers for you to want to invest in? Do they have to have ARR or a minimum number of customers, or anything like that? Or is it just too early for that?
AA: It's often too early. We do like to see an MVP and we have invested prior to that as well. Our preference is definitely for an MVP and our preference is for revenue, but we have jumped in earlier.
VN: So, idea on a napkin? That early?
AA: That's a little too early. So, there's a stage in between where we feel like there's discussions, there's letters of intent, there's relationships that are building, so not fully pie in the sky that, like, “Here our great idea, let us go run.” We haven't gotten in that early and I doubt that we will.
VN: When it comes to the product, what do you want to see? Do you want to be able to use it? How do you test it out? How do you make sure it’s a good product?
AA: We are keen on seeing some kind of product market fit. Does this consumer actually want this? Is there a problem that this is solving and is this solving it in the correct way? So, looking at the consumer interest. We can test that out both by being our own beta testers, we have a network that we rely on our own friends and family to do some checking, and both experts in different industries, and just the target market.
VN: You want to invest in female founders, obviously, but what are the actual qualities of that person that you look for? What are the tangibles of that entrepreneur or that founder that you want to see from them to want to invest?
AA: What we look for is coachability. Honestly, that's huge. Grit, perseverance, whatever adjective you want to give to that tenacity, someone who was just going to keep walking forward, which is different from the next word, I'm going to say, which is pivot. What we have noticed already in our founders is their ability to take new information, reevaluate, look at what they're doing, and make adjustments. Also, the ability to get new information and recognize that what they're doing is the right course; a pivot of staying the course is just as important as knowing when to switch. One thing I look for as well, personally, is that the founder has a good understanding of how the financials work. They should have some accounting mentality, and be responsible with money.
VN: I want to go back to what you said about coachability. That’s an interesting word. Maybe I'm wrong about this, but when you say that, what I think is, “someone who is going to listen to me.” Is that what you mean by it?
AA: I do not, actually. I have worn many hats in my 55 years and one of them is as a personal life coach and, prior to that, I was a consultant. And the reason I tell you this is there’s a big difference between the two: as a consultant you get to tell people what to do. You're the expert, you do the research, and you give the plan with the three options and which option you're going to lead them to. As a coach, the whole idea of your understanding of the other person is they are creative, resourceful, and whole. They know exactly what they need to do and what's going on, so your job as a coach is to ask questions, because you know nothing. And I'll tell you, it was a big switch for me to go from one to the other, but I actually love the idea of coaching because, again, you are creative, resourceful, and whole. You know everything, my job is to unlock, and to untap, and help you discover that, but that also means that you, as the founder, have to be open and willing to engage in exploring and to think. So, I'm not telling you what to do; you know it, but you have to be reflective, thoughtful, and able to open your eyes to questions and problems and solutions that you might not want to always.
I'll give you another example: I've actually spent a lot of time coaching sports as well, primarily basketball and soccer. Again, it's the idea of that athlete who was maybe very skillful and is the alpha player on the team, but they still need to improve.
VN: Is the idea of teasing out a person's qualities like that a unique insight that you bring to venture? I've talked to a lot of VCs and that's the first time I've heard somebody put it in those terms. Do you feel like that coaching experience gives you unique insight into venture capital and the entrepreneurs?
AA: I'll say yes; if you haven't heard it before, then it must be something that I bring differently to the table as a VC. I'm glad for it; I think it also relates well to the fact that I am an older woman and I have a long lived experience. I've raised three adult children who basically I could frame as having been my own little startup ventures that I push through and now they're all launched into the world and independent and they're off my books, or at least two of them are, one is still in college. So, yes, that is something I bring differently and I really try to tap into it.
Honestly, and I was thinking about this last night, I would love for a beginning coaching module to be part of every person's education. It is so strong and wonderful and beneficial towards communication because they teach you all about listening and listening and listening.
VN: I want to ask you a little bit about valuations and what you see happening in the market. This is an interesting time coming out of Coronavirus and COVID, and I'd love to hear what you've seen in the market in terms of valuations. Where you see them now and where do you see them going?
AA: What we've all been reading is valuations are hyped up. As people look on the horizon, there's a sense that there might be even some down rounds. In addition to doing VC investing, I like to spend some time in the equities markets as well and they're all related. To answer your question, as I look forward, I'm feeling comfortable given that we invest in female founders and female founders tend to be extremely efficient with their capital. I'm feeling, going forward, even more so that betting on and investing in female founders is the right path for the future because the valuations are not hyped; they're fighting to get their money, they're fighting to get their valuations. As the market drops, they're already at a conservative level.
VN: You talked about your LPs before and that's very interesting to me because you seem to have different LPS than a lot of other funds. How do you source your LPs? How do you find them? Are you bringing in new people into the LP market that aren't there currently?
AA: 100%. We are currently in the midst of an LP drive, so we are fundraising for ourselves and hoping for our first close by the first week of May, just to let us know where we stand. So, we're still in very early days in terms of getting our LPs.
Our target so far has really been within our own friends and family circle, those who are accredited, but they have not yet been in the VC space. And so, they are new to venture investing, which is great. Again, we are a wonderful first step into this asset class. In addition, we have been fortunate that we are being invited to different events. For example, next week will be in LA in Venice and there will be an opportunity to meet different gatherings of people that are being organized by groups specifically to bring in different types of LPs. We have a banking relationship with Silicon Valley Bank, and so they will be helpful. Carta has actually been very helpful just in introducing us into different peer group networks and providing us some platform to share our story. Both our advisors and founders have been wonderful in introducing us to others as well.
VN: Talk to me about your differentiation to entrepreneurs. I assume one of those is that you are an all female team, but what do you offer them? Because for the best companies, they can take money from a lot of different places, they have a lot of different options. So, what's your pitch to those entrepreneurs?
AA: One is, of course, that we're all women, and it's mission aligned for many of our female founders to make sure that they have female representation on the cap table. So, we have had instances with our beta fund portfolio companies where they actually will carve out money from other VCs to make sure that we can enter onto the cap table as well. So, that is a wonderful sign of their support for us. And why would they do that other than just having our female faces there? It's because what we are finding, and what we actively promote and look for, is actually also one of our gatekeepers of how we will invest: we don't want to just give money and say, “Here you go, see ya.” That's not our model. We want to say, “Hey, we're bringing all of our currencies to the table. We will write you a check, we will check in with you monthly or as frequently as you'd like, we will review your documents with you, we will be your first call, whether it is a call of tears or a call of elation.” That is the relationship we want to have with our founders and that is the relationship we are seeing that we have, and it's extremely powerful. It's building the network, and it's building the sisterhood community. I don't want to sound cliche, but it really does come down to that. When you do have that founder where you’re the first call because something so wonderful has happened with the company, it's like you're the mother again. One founder actually calls us her fairy godmothers and that is how I like to think of ourselves. We're VCs but I wear that fairy godmother hat too, and if I can sprinkle some fairy dust for them, whatever that means, if that fairy dust is some money, if that fairy dust is a warm introduction, which I know is going to unlock more opportunities for them, let me do that.
I've also had founders who have one-on-ones where there have been emotional things not even related to the company, and they'll start crying with me and sharing a story. That, to me, is also a really important relationship because it shows the amount of trust and also we're holistic humans, everything impacts everything else. So, if there's something going on that is strongly emotional to them, that's going to impede their business success, so let us be able to talk about that. And, by the way, to further that notion, when we are talking to our founders and they're talking about female incontinence or vaginal bacterial growth, like I'm saying these words with you and I'm kind of laughing, but that's a typical conversation that's very comfortable to have when it's all women in the room.
VN: When you mentioned crying with the founders, my thought was, “I don't know if they would be comfortable doing that with a male VC.” The relationship is different between a female VC and a female founder than it would be between a male VC and a female founder. I've heard from a lot of women in the workplace that they don't want to appear weak in front of men, so they would have to hide their emotions in a way that maybe they don't have to with you.
AA: Correct, absolutely. I'm going to give you a different but similar example: the other day, one of my partners had a one-on-one with a potential founder, we’re still in due diligence. This founder has a one year old and her babysitter was late, so she's juggling a one year old waiting for the babysitter to come and, at the same time, my business partner is rolling with it because she's been in that same exact situation. We felt really actually proud of the fact that this founder felt comfortable enough to do that. It was the third or fourth meeting, and we've had social events with her, so that interaction is really beautiful.
VN: I know I used the word “unique,” earlier but, again, this is unique for venture capital.
AA: We have the opportunity to disrupt VC in so many ways. And one of them is taking some of this VC culture and saying, “No, we don't want to behave that way. We don't need to be rude, we don't need to be short, we don't need to discredit people for all these different reasons.” We often say we lead with our brain, our heart, and our soul. We bring the whole package and we want our founders to bring that whole package. And that is something that we're very explicitly and deliberately trying to function and it's different because, remember, all three of us have operated in different environments in the male way. And the three of us are even unlearning some of our own biases, and it's great to be continually learning and improving and changing for a better path.
VN: You talked about a couple of companies earlier that you invested in. I don't know if you want to do a deeper dive into those, or if you want to mention a couple others, it’s just always great to hear what it was about those companies that made you want to invest. What was so intriguing about them, and the founders and their story?
AA: I spoke briefly about Rebel Girls. Changing the base level of a problem is something that we talk about a lot. We don't want a band-aid solution; I often describe it as diabetes: you can prescribe a drug to help you with your diabetes, but better would be to figure out how to stop that diabetes from presenting itself. With Rebel Girls, they are going to the root: it is the storytelling that we as children all hear. They're rewriting it, they're telling us new stories, giving us new visions. For me, that was such an obvious no-brainer. And then, of course, meeting with the founder, and she just met all the other criteria and the business model and they actually had revenue. It was the whole financial package and that due diligence was spot on, but it was truly the storytelling that I love so much.
I've talked about Infiuss Health; again, it was something that I have been doing lots of research on to understand about how the medical industry works and how pharma tests different drugs. So, again, when I saw that solution, and then met the founder, it was like, “bam, bam, bam.” It was something that I wanted. All three of us got on board very quickly.
Another Tomorrow is a company that I haven't talked about yet; what they're doing is reinventing the entire delivery system in the fashion industry from soup to nuts and adding in components of sustainability for animal welfare, people welfare, and Earth welfare. As we should all know, the fashion industry is one of the biggest drains on the world in terms of those three components and yet the amount of money that's involved in it is huge, it's a global reach, so it's a huge industry that is having such a negative impact on the world. Vanessa, the founder, is sourcing wool from animal farms in Tasmania that are practicing appropriate animal husbandry, all the way to the far end of creating a QR code and she just actually launched last week a whole marketplace that they wholly own for their own product for resale. And so, the provenance of the product can be confirmed, you can upload it into a website that they manage, and that they vet the entire time. It's trying to take this huge industry and start unwrapping and detangling all the problems, and they're making beautiful products.
One that's extremely topical is BumoWork. What they're doing is providing a different delivery of childcare. It's a coupling of a workspace and a childcare space. What they like to say is, “you can work hard and be a parent at the same time.” And it's also brilliant, and it's been really wonderful with the pandemic; I think it's from six weeks to six years, you can bring your child, there's a child care that has educational components, your kids are close by to you, they're being stimulated in all the appropriate ways with education and love and care, and you have a workspace there that allows you to get your work done well and at ease. Plus, you're just a few meters away from your children. How brilliant is that? With there being so many more openings in commercial real estate, they're able to get some really great space, and they're also partnering up on campuses as well.
VN: That's definitely a solution that's needed for the current workforce, for the way we are working now.
AA: And to help allow parents, primarily women, to remain in the workforce, so that they have a solution where they can have and care and feel like they're able to be a contributor in their professional life as well.
I'll tell you this, when I look in our portfolio of 13 companies, I am so proud of them and I'm also proud of us. What I also love is we are introducing them to each other and they are also establishing professional networking among each other and doing some partnerships. That, to me, is what this is about: it's just making connections and pings and networking and thinking about the holistic delivery.
VN: Tell me maybe some of the lessons that you've learned in your career as a venture capitalist maybe some of the things that surprised you since you started this journey.
AA: What has surprised me, and I don't know if surprise is the exact right word, but I have been heart warmed by the amount of support that I have been receiving. To me that implies that what we're doing is touching so many hearts and souls; it resonates, that's the better word. It is resonating strongly with so many people because through LinkedIn, primarily, and emails and people I haven't heard from in a long time, they're embracing us. So, that has been really wonderful. Because we are swimming in different lanes, my exposure to that Bay Area bro culture has been minimal, and that's also great. There's room for all of us to operate and we're operating in an area that we love, and that we know is underserved and maybe, eventually, the goal is that it will be equally served.
VN: What's the part of the job that you really love? When you go to work every day, what really motivates you to do this?
AA: I have three adult children, and what motivates me is their support, their excitement, and knowing that what I'm doing will have an impact on their futures. It's very tangible for me to think about our portfolio companies: they have five to 10 years to fully actualize and make their changes and impact on the world, which means that's going to have a strong impact both on my children and their children. So, there's a very personal focus and excitement in there.
VN: Is there anything else that I need to know about you, or the space or your mission or anything else?
AA: We're passionate about what we're doing and we're disciplined about what we're doing. That's just the underlying message.
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