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For immigrant founders in the UK, office hours with VCs are rocket fuel • ZebethMedia

Lyubov Guk is a founding partner at Blue Lake VC. She supports early-stage international founders working in the U.K. Robyn Klingler-Vidra Contributor Robyn Klingler-Vidra is associate dean of global engagement and associate professor in entrepreneurship and sustainability at King’s Business School. Juanita Gonzalez-Uribe Contributor All three of us are immigrants to the U.K. We were each greeted with the classic “catch-22” of trying to open a bank account and finding a place to live: To get a bank account, you need an address, but to rent a flat, you need a bank account. This is just one of the (very minor) points of friction immigrants face when moving to a new country. Entrepreneurs who set up a business in a new country encounter more challenges. Lyubov’s own experiences as a Ukrainian immigrant in the U.K. gave her both great empathy for the trials immigrant founders face, and the belief that immigrants often make and build world-leading businesses. Beyond personal experiences, academic research seems to point to an almost inverse relationship between the contributions immigrant founders make and early acceptance by the ecosystem. Designing an international founders open office hours pilot With personal experience as her motivation, Lyubov piloted a program that would offer a softer landing for immigrant entrepreneurs in the U.K. The pilot was an “International Founders Open Office Hours” program that would help immigrant founders boost their social networks and local know-how by meeting with VCs in the U.K. Instead of the usual pitch format, the meetings were informal conversations that aimed to help founders build up this essential — and for immigrants, missing — social capital. The program was inspired by Playfair Capital and its Female Founders Office Hours. The initial start was rocky, as it coincided with the Russian invasion of Ukraine. Lyubov and her Blue Lake partner, David Gilgur, were helping families and friends in Ukraine by day and drafting the program plan by night. Early on, there was the challenge of bringing VCs and partners on board. Blue Lake had been active for a few years but was still a new name in the investment ecosystem. Asking for investors’ time meant that we had to prove we could launch something impactful that key players would want to be a part of.

6 Investors share where they draw the line when it comes to potential ethics issues

The venture capital industry doesn’t have the best track record when you’re talking about ethics. Like most professions involving power and wealth, venture capital also sometimes attracts people for whom doing the right thing isn’t a concern. And limited regulatory oversight and a lack of transparency mean that investors can often get off scot free for not factoring ethics into their investment philosophy. We’ve all seen startups happily taking money from investors who back companies that have a negative impact on the climate, or broadcast misogynistic rhetoric. Sometimes, we also get venture firms raising capital from foreign governments that don’t have the best track records surrounding issues like human rights. But not every investor is a bad person, of course, and it seems as though the industry is taking steps to clean up its act — albeit slowly. Startups and investors are increasingly paying attention to what kind of people they want to work with and where they want their money to come from. Investors also looking for startups that won’t just make them money, but have the potential to leave society and the planet in a better place. To find out just how ethical venture capital is at the moment and how far it can still go, ZebethMedia surveyed six investors about how they approach ethics in their day-to-day. And we’re happy to report that all of them said the industry doesn’t do enough to police itself on issues surrounding ethics. They also wanted more to be done to make the industry fairer and better. We’re widening our lens, looking for more investors to participate in ZebethMedia surveys, where we poll top professionals about challenges in their industry. If you’re an investor and would like to participate in future surveys, fill out this form. Several investors said that having more transparency in the industry would help alleviate some of the ethical problems that continue to flourish, like bad actors being given seemingly endless chances and firms covering up questionable practices. “Venture capital’s opacity presents significant barriers to effect self-policing,” Geri Kirilova, a partner at Laconia Capital, said. “Greater transparency in decision-making processes and capital flows, whether it’s voluntary or mandated by regulation, would help.” Logan Allin, founder and managing partner at Fin Capital, agreed. He said that it would be nice to see some consequences and accountability from industry organizations like National Venture Capital Association (NVCA) or government entities like the SEC to help stop such issues from being repeated often. But without regulation, many firms are taking matters into their own hands. While they can’t be responsible for fixing the industry on their own, they are personally keeping ethics top of mind as they invest and raise capital. To get a feel for how some players approach different ethical issues, we surveyed: Geri Kirilova, managing partner, Lacovia Vital Laptenok, founder & GP, Flyer One Ventures Logan Allin, managing partner, Fin Capital Check Warner, co-founder and partner, Ada Ventures Laura González-Estéfani, founder and CEO, TheVentureCity Soraya Darabi, co-founder and general partner, TMV Geri Kirilova, managing partner, Lacovia How much does a company’s potential to create positive social or societal impact influence your investment decisions? What if the impact of a startup could be negative? Negative externalities, particularly detrimental social and environmental effects, are often deal-breakers for us. We are particularly averse to companies that exacerbate human exploitation, social and economic inequality (ironic coming from a VC, I know), and environmental harm. Capital is never enough to make a business or relationship successful. Laura González-Estéfani, founder and CEO, TheVentureCity How much should VC incorporate ESG metrics in their investment decisions? The application of ESG frameworks to VC is hazy. VCs typically have a fiduciary duty to maximize returns for their LPs. If they believe ESG, however it is defined and applied to their investment process, positively impacts returns, they should incorporate it. If ESG matters to a LPs’ mission, it seems logical that the VC’s investments, at minimum, should not be counterproductive to these efforts. But this question is better suited to the LPs themselves. Do the ethics or reputation of another VC firm have an impact on your willingness to follow on their investment or co-invest? Yes, they are a factor in our decision-making process, particularly regarding our risk analysis of the business. How do you think about ethics when raising and accepting LP money? Beyond following standard KYC/AML procedures, we have a high bar for alignment of ethics and values with our LPs. Our LPs are also included in our anti-harassment, non-discrimination, and diversity policy. Does the venture capital industry do enough to self-police? What could be done to remove or deplatform bad actors? Venture capital’s opacity presents significant barriers to effect self-policing. Greater transparency in decision-making processes and capital flows, whether it’s voluntary or mandated by regulation, would help. How often do founder-related red flags scuttle an investment in a startup that otherwise appears to be an attractive investment? If we are not confident in a founder’s trustworthiness and judgment, we will not invest. Do you believe that founders can learn from past mistakes? Would you invest in a company led by someone with a troubled past? We do believe founders are capable of learning from their mistakes. Beyond the financials, what about a company compels you to invest? Given our pre-seed and seed investment focus, the financials are never the most exciting element for us. We are drawn to mission-critical solutions, with some form of market demand validation, led by founders who have a deep understanding of the customers they’re serving and the ability to effectively build a big company. How do you prefer to receive pitches? What’s the most important thing a founder should know before they get on a call with you? We review all inbound submissions. The easiest way to submit is through this form. Founders can learn more about our investment process and strategy here. Vital Laptenok, founder and general partner, Flyer One Ventures How much does a company’s potential to

Crypto VC deals continue drop as activity follows bearish market prices • ZebethMedia

Venture capital deal flow into cryptocurrency startups is going in the same direction as the cryptocurrency market cap: down. The total crypto market cap has fallen almost 59% from about $2.25 trillion at the beginning of the year to $923 billion at the time of publication, according to CoinMarketCap data. “Deal activity tracks very closely to the crypto market cap,” Robert Le, fintech analyst at PitchBook, said to ZebethMedia. “It’s a little bit of a lag, but if you overlay the crypto market cap to the amount of venture capital going into the space by quarter or month, it tracks closely.” In the past two quarters, global crypto VC deal activity fell from all-time highs of $10.87 billion in the first quarter to $7.63 billion in the second quarter and $4.44 billion in the third quarter, according to PitchBook data as of October 3. The last time the total deal size was this low was in the first quarter of 2021, when the total was $3.46 billion. “The deal count went down a lot,” Le said. “What you’re seeing is that the crypto companies that are getting investments are getting a bigger share compared to last year.” Basically, investors are putting more money into smaller bets and companies or projects they feel “higher conviction” for, Le said.

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