What unique insights and perspectives do founders and CEOs bring when they become investors themselves? For women founder/CEOs is becoming an investor the endgame?
In celebration of Women’s Month, we spoke with Jacqueline van den Ende who until Jan 2021 was a Partner at Peak Capital, a European entrepreneurial venture capital firm with total assets under management of €84 million.
Jacqueline shared her experience on sitting at both sides of the fence – going from a founder/CEO, to becoming a VC, and now back to founding another company. Jacqueline’s full-circle journey started as a young entrepreneur, founding her first company while studying at university to becoming an investor, after a 6-year stint as founder/CEO in Asia, then back to founding another mission-driven company last month.
Before becoming Partner at Peak Capital, you were a founder/CEO, walk us through your story?
I grew up very internationally. I grew up in Australia, later in Syria, then I lived in Norway then Kyrgyzstan. In that sense it was not too big a leap for me to go to Asia and become Founder/CEO of Lamudi Philippines, Rocket Internet’s online real estate marketplace established in more than 30 countries.
But my entrepreneurial journey started way earlier, when I was in university when I founded De Kleine Consultant, the largest non-profit student-run strategy consulting company in the Netherlands. It is also in London, UK as well as in Stockholm, Sweden, and it turned out to be wildly successful. Now De Kleine Consultant exists in every student town in the Netherlands and has several international locations. Student consultants work with all kinds of companies – small, big, nonprofits and even refugees – who need advice but cannot afford to hire the big consulting firms like McKinsey, Boston Consulting Group, ATKearney etc. It was a tremendous experience, going from a split-second idea to now, a thriving organization. I still regard it as my proudest achievement. It was then that I fell in love with entrepreneurship.
At some point I started my career in Private Equity at HAL Investments, a €12 billion investment fund. I originally had no plans of working in private equity but because HAL Investments only hires fresh graduates (never experienced hires) I decided to take this quite literal once-in-a-lifetime opportunity. I stayed with them for more than 4 years. During my time at HAL Investments, I knew that I wanted to be on the other side of the table, sitting across investors, as a founder/entrepreneur. I started telling people about this and opportunities to start a company started coming in.
It was then that I met Rocket Internet. It was in the early days of Rocket Internet where they would send consultants and investment bankers to countries all around the world to build a company. I was asked to go build Lamudi, an online real estate marketplace in the Philippines. We started with 2 interns and in three years we built the company into the number one online real estate platform of the Philippines with 100 team members. After a few years I then took on a role as CEO of True Money, an exciting fintech company, which was backed by Ascend Group, the Thai CP Group (a $60 B conglomerate with holdings in food, telco, retail) and Alipay and employed 400+ employees in the Philippines back then.
Quite unexpectedly, I then got a call from Peak Capital. I once pitched a startup idea to them and had been very impressed with the partners. They were looking for a new partner with both an investment and entrepreneurial background. I liked the team and Peak Capital and thought it was a great opportunity to learn about the European tech scene and help entrepreneurs through the (at times painful) lessons I had learned as an entrepreneur, so I decided to make the leap.
In 18 months of being a fund partner I learned that as an investor I miss the energy of building a company myself. I love to have a vision, inspire people with my vision, build teams, build an operational flywheel and bring energy and speed to an operation. I greatly missed the ability to be truly hands-on as an investor. As an investor you can be a great partner to an entrepreneur, through a coaching role, by guiding decisions and by being a 24-7 sparring partner. But you are never the one in charge. You are by definition in the backseat or in the passenger seat. I am not ready for that role. I want to be in the driving seat in this phase of my life.
Perhaps in 20 years, when I have learned a lot and have spent all my entrepreneurial energy, I will go back to investing and pass it on to the next generation. A good investor needs to be intrinsically motivated to really help companies and experience success through others. I still have something to prove to myself. I know exactly what I want, which is to do it myself. Therefore I decided to go back to the entrepreneurial side and start my new company Carbon Equity.
As an investor at Peak Capital, which practices can you attribute to your insight as being a founder/CEO?
Having been in a founder role myself, I guess I could better relate to what entrepreneurs were going through e.g. the challenges of selling your product when you are still a really small company and have little proof or customer references, the difficulty of hiring exactly the right talent or the difficulty of leading a company and often failing at that. I had the opportunity to make a lot of mistakes when building companies and as a result I had quite some lessons learned to share.
When you switched from founder/CEO to investor, what were the biggest surprises and challenges you encountered? How did you deal with the surprises and what were the lessons learned from overcoming the challenges?
I learned that at times it is easier to be a CEO than an investor, when you want to get things done. As a CEO you typically have the final say. Even in a very flat organisation there is a level of decision making hierarchy. As a VC minority investor you can never dictate or decide so you need to carefully influence management teams. That is quite an art. A good investor first of all listens really well to management teams and supports them every way they can to enable their vision. Secondly when wanting to guide their path you need to spend a lot of time in building understanding, explaining why a certain strategy could make sense. And ultimately you need to accept their decision. It’s their company in the end.
I think as an investor you need to spend time in building trust with entrepreneurs. An entrepreneur often feels they are reporting to investors in a hierarchical relationship. But the most beautiful relationship between entrepreneurs and investors is when they are on the same team. When a CEO feels comfortable enough to call you, the investor, in the middle of the night to talk about things. I have had CEO’s call me, cry, and tell me that they are overwhelmed. The challenge is to take them by the hand and go through the process and challenges with them, from a position of trust.
One of biggest surprises was seeing a lot of companies raise capital, even beyond Series A, that still did not know what problem they were solving and what paint points they are addressing. In that sense I believe it is wise to first achieve a level of product market fit – or at least clear proof of problem-solution fit prior to raising capital.
As an investor, it demystified being an entrepreneur for me. One of the reasons for that is that as an entrepreneur you only see success stories. There is also a “female aspect” to this as you only see male founder success stories. But when I became an investor, I saw all of these. I saw the failures. I saw that these founders/CEOs are not necessarily brilliant people, just people who started something themselves. It made me realize that I can do it too.
Startup founders, particularly women founders, are always asking how to get face time with investors. As you have experienced being on both sides of the fence – as founder/CEO then investor, what advice can you give to both founders and investors to close this gap?
I feel that women are generally more hesitant to approach investors because they feel they are not ready. There is a level of self-doubt among women. My theory is that white men grew up in a world where every successful person on the planet looks like them – be it the president, an astronaut or Fortune 500 CEO’s – and this reflects in self-confidence of young men. They grew up thinking, “Yes I can. I can build a company”. This is not the same for women, especially women of colour, perhaps resulting in a level of self-doubt where we might think that we are not ready, or we need more proof. Men in these situations will already be talking to investors! My advice therefore to all women entrepreneurs is to just do it. Go out and talk to people, to investors and when you do it, do it with confidence! Go all in, do not undersell yourself, and blow them away. Have no fear, get over your own insecurities and give it all you have got. The bar is much higher for women and people of colour. Yet we still need to go out there and do it. Do not be intimidated. Look for female investors or female partners as it is always helpful to talk to other women.
As an entrepreneur, when you are talking to people (be it investors, potential customers, etc.), forget for a moment about their background, achievements or resumé, talk to them at eye-level. It then becomes a conversation between equals – of two people exchanging ideas and understanding each other. Be less afraid of pitching your idea. The best outcome is that you get funded. The worst but also second best outcome is that you get free critical advice, which is awesome.
Diversity quota in investment firms, yes or no?
Should there be more diversity in investment firms? Yes, absolutely. Should you achieve diversity at the partner-level. Yes! This should apply to all professions in investment firms – from associates, partners, bankers, lawyers, etc. We see more diversity at junior-level – among analysts and associates but not at the partner-level. For Peak Capital, it was extremely important. When you have more diversity at the partner-level, you also create a diverse company culture and attract more diverse people. This is what we had at Peak Capital, I was extremely proud of our diverse team – in gender, age, race, in sexual preference!
Diversity is very important, but it is also very difficult. Very few investment firms have sufficient diversity in the partner-level. It should be made a priority – hiring diverse team members at the partner-level/decision-making level not just at the junior and associate levels.
What advice would you give to startups with female and under-represented founders in general, who are currently experiencing pushback?
A lot starts with the mindset that things will be difficult, that it is one step forward, two steps backward. Building a company is a mental rollercoaster with moments of tremendous optimism and other moments of total self-doubt. Know that that is part of the journey and enjoy the rollercoaster ride.
Do not give up when you are feeling low. It really helps to work on something that you honestly believe, a higher purpose and not just doing it for money. In climate finance for example, I can spend the next 30 years working on it as I believe there is no bigger problem than climate change. My motivation for this theme helps me navigate my lows better.
Could you tell us your impression of the current venture capital landscape in Europe? How have you seen it change in the last 5 years?
Europe is more conservative than the US. In the US you have a huge single market but in Europe, you have all these little markets and to scale you must cross borders. Even crossing Belgium from the Netherlands brings you to a different market, different mindsets, etc. It is therefore more difficult to scale in Europe than in the US. Since this is the case, it is difficult to make huge single investment bets because the size of the prize is smaller. But Europe is catching up, the European Union is doing a good job with investing in innovation but also aligning markets. For example, aligning financial markets and establishing open banking across Europe which creates huge opportunities for fintech companies to scale EU-wide and mitigates the problems of scaling. The European Union is doing a good job in establishing a common European infrastructure which makes scaling easier.
For most women VC’s, they started out as founders/CEO themselves and then became VC’s. Do you think this boundary is as fluid or easier to navigate for men than women? Male VC’s start out as founders, become investors, then go into business ventures again, or while being investors. For female VC’s, what is your observation?
I think there are two types of investors – those that started out as founder/CEOs who have been successful in business then decided to become an investor and those that are career investors. They started out from strategy consulting firms, jumped shipped into venture capital or as associates/analysts and rose through the investment career ladders. My hypothesis is that more female investors are career investors. And in that case these career type investors would be less likely to circle back to being founders again. But for those female entrepreneurs who end up being investors it is equally easy to hop back into venture building as it is for men.
What were your greatest achievements either as founder/CEO, or as an investor?
My biggest pride is still founding De Kleine Consultant , the strategy consulting firm run by students that I founded while I was still in university. Students – from all disciplines like medicine, aerospace, psychology etc. work as Strategy Consultants for small companies and non-profits. It is now 13 years old and has impacted the lives/careers of thousands of young people to date. It is such a mission driven organization that the DNA of the organisation is extremely strong. I am no longer involved in the day to day, but it is an organization that lives beyond myself. And that for me is the definition of success.
What motivated you to “hang your hat” as Partner at Peak Capital and co-found another company?
I am the founder type investor who still has lots of entrepreneurial energy. Maybe in 15 to 20 years, when I have spent all this entrepreneurial energy, I will be back as an investor.
What is the next thing?
I want to start another big vision company that addresses how we finance climate technology and how to build a low-carbon economy AND inspire a lot of people with that vision. Carbon Equity is an investing platform for alternative climate assets, alternative climate assets are everything not listed in the stock exchange – to create financial products which have direct climate impact in terms of euro for euro investing directly in climate technology. The essence is to invest billions of euros in climate technology with millions of people.