Founder-market fit is one of the most vital aspects in a startup’s success, and operators (people involved in the day-to-day operations of a startup) who develop into founders have an almost unfair advantage in finding that fit. Data shows that a lack of expertise and business acumen among founders contributes to the failure of VC investments.
The same principle applies to some extent to operator VCs (corporations normally founded by former startup founders). While there is no definitive proof that operator VCs make higher investors, recent research indicates that founders and operators who develop into VCs they are much more successful in supporting corporations than in the case of traditional VC investors.
Operator VCs have a long history in Silicon Valley. Still, their adoption is less widespread in Europe and Africa: just 8% of VC firms in Europe and Africa are run by former operators, compared with almost half in the US. OpenseedVC is taking this model to Africa and Europe with a latest fund.
The company, which plans to be the first check-in startup launched by operators in each regions, achieved the first close of its $10 million early-stage angel-style fund. General partner Maria Rotilu said “the first closure is in the multi-millions and fundraising is still ongoing,” without specifying how much. She added that OpenVC hopes to realize final closure inside the yr.
Supporting operators with financing… and operators
Rotilu founded OpenseedVC with a clear vision: invest early in experienced operators who need to launch their technology corporations. In a statement, OpenseedVC said it is going to provide founders not only with capital and belief in the earliest stages, but also with the support of a community of experienced operators that currently numbers over 50 people.
“If you support operators who have identified a problem and are taking steps to build their technology, you have probably recognized a common challenge: the need for capital and guidance from other experienced people. To solve this problem, we are focusing on improving carrier networks in four key areas,” Rotilu told TechCrunch.
“In the early stages, software engineering knowledge is crucial. You need someone who has acquired technical talent, built teams and understands infrastructure design, offering invaluable first-hand experience. So if that is the common thread, I would say we are optimizing first-hand experience across software engineering, product, go-to-market, people and talent.”
The majority of people in the OpenseedVC operator network are people with whom Rotilu has worked or been referred. Some are also limited partners in the fund, although they do not currently earn on a transfer basis. Rotilu also mentioned that other LPs include founders and professionals from traditional and technology corporations, in addition to high-net-worth individuals from Africa, Europe and the United States.
Supporting pre-seed startups in Africa and Europe
London-based OpenseedVC will goal at least 60 startups over the next five years. The early-stage fund, which says it operates on an open application process and allows founders to use with no introduction required, will provide checks of as much as $150,000 to startups focusing on the future of commerce (including B2B software, artificial intelligence and fintech). , the future of work (productivity) and digital health.
“We are looking at the earliest stages; this is our favorite point. Openseed is keen to invest in pre-seed investments, but early pre-seed because the later pre-seed stage is where traditional VCs are. We tend to operate independently and quickly, and we don’t necessarily need a founder to bring in a lead investor or anything like that before we make an investment,” Rotilu noted. She added that the fund is interested in specific founder profiles in a broader operator-focused framework: domain experts (operators in high-growth technology corporations, including first-time founders) and second-time founders who have created and exited a startup.
So far, the fund has made two early-stage investments: one in hidden UK AI-powered supplier dispute resolution software and the other in Intron, a speech-to-text transcription model for under-accented people, starting in Africa.
“We selected Africa and Europe to use our thesis to work in these regions. Our thesis is that by supporting experienced operators at the starting of their journey with the right capital and support from similar operators, you’ll be able to build a diversified portfolio that generates incredible returns for investors and provides crucial support to ambitious operators when they need it most,” said Rotilu, who before OpenseedVC, he invested in multiple regions with different funds.
Prior to founding the Rotilu Fund, she served in a variety of roles as an operator, including country manager at Uber and general manager of the Nigeria division, where she helped each technology corporations scale their operations to hundreds of thousands of users. She later accomplished an MBA at Oxford, where she served as Managing Director of the Oxford Seed Fund, one of the largest student-run funds in Europe.
Striving for a diversified portfolio
During her MBA studies, the operator-turned-investor with a background in IT interned at Hustle Fund, an early-stage fund in the US, where she gained experience investing in startups in the US, Latin America, Southeast Asia and sub-Saharan Africa. Africa. After joining Octopus Ventures, one of the largest funds in Europe, as Director and Fund Manager of the First Check Fund, a £10 million early stage fund for European start-ups in the B2B software, fintech and health sectors.
Rotilu said that at Octopus she realized she needed to focus more on Africa, a market where she had made several angel investments over the course of her profession. The London-based VC firm didn’t offer much opportunity to do this, and Rotilu, who also wanted transparency and autonomy to develop a strategy that she felt suited her experience as an operator and investor in Africa and Europe, saw this as an opportunity to launch her VC firm.
The growing number of women-led VC firms around the world is a positive trend (although women, especially women of color, still find it difficult to hunt financing or raise funds). As more women participate in enterprise investing and more LPs and corporations support them, this trend will increase funding for women-led startups, setting the stage for success for every stakeholder. Most women-led funds are aware of this importance, so it’s no surprise that OpenseedVC may also actively support women-led startups.
“There are very few women-led funds in the world, and we have a specific view of what a diversified portfolio should look like. We are focused on diversification in terms of geography, industry and gender,” Rotilu noted. “We put a lot of work into diversity and, as a fund, we apply a gender lens to our portfolio strategy. Our goal is a truly diversified portfolio, striving for a 50/50 balance in the co-founder teams,” she said.