We took another interview and for this time with our amazing Paulina (Board Advisor at LUMUS)!
Paulina Szyzdek is an active angel investor and venture capitalist working with Zane Venture Fund as a Scholar in Residence, Female Founded Club, 13 VENTURES, and Clearbanc as a Venture Scout and she is part of our Board of Advisors at LUMUS.
1. Why are you an angel investor? What are your pros and cons?
First of all, it’s very different than investing out of the VC fund and gives you a lot of freedom when it comes to the decision-making process.
- Flexibility: you can decide where you want to focus on
- Responsiveness: you can be quick which is very often very important to founders
- Values: you can support the cause that is most important for you.
The business is crucial when it comes to investment decisions, but you can also accelerate the growth of people, region, market that may be overlooked now by institutional entities.
- Match: the founder needs to trust you as a person and see your individual value in opposite to when you are part of the fund and you are under the VC name. The brand, individual investor profile on the market is more and more important nowadays.
- Loses: you can lose money as easy as while investing out of the fund, there is no difference here
- Access: you may not be able to access some deals because you are not known to founders, there are local limitations or regulations.
2. Can you tell us more about your first investment (or any other favorite investment story will do)?
Yes, my first ever investment took place many years ago when I knew nothing about investing and it obviously wasn’t the best decision. It was good to learn from my mistakes and realize how much time actually it takes to properly select the market, consider different options, get to know founders, and see if you can be helpful somehow. The money is important but if you do not bring a significant part, which is often the cash in angel check sizes, you should offer additional value. I have 5 startups in my portfolio, and I do not have the favorite one. I do believe in all of them.
3. What do you look for in a startup?
At the very early stage where oftentimes there is no product or significant validation or when the founders are at the stage of gaining traction, you cannot really do proper due diligence, run projections and focus on the product entirely. I look for passion and grit in the founding team. I look for motivation and the reason why they solve this particular problem. I love to see their experience in the space and a deep understanding of the forces that exist on the market. Someone said to me one day and I totally agree that if you have a team that does not go along and a good product, even the best idea can be torn apart because of misunderstanding, miscommunication, or lack of common beliefs. If you have a good team and average product, they will work until they make something amazing out of it.
4. Do you have any personal investment preferences like sector, type of product, geography, etc?
I’m extremely passionate about the future of the workspace. All about making our work more efficient, replacing repetitive tasks, routines, equipping people with technology, advancing humanity, and changing the way we live, work and study are super interesting to me. I’m always happy to talk to founders who work on ideas in the space of AI, robotics, automation.
The natural consequence of remote work is decentralization and people moving out of the industry hubs to smaller cities. We need to work on infrastructure and bring technology to this space where the line between work and life is getting blurred. The way we live and perceive our work has been changing and technology is catching up with the needs that appear to be so different than years ago.
For geography, I’m a big supporter of decentralization and I think the borders become less and less important especially nowadays so I’m open and optimistic about global investing. I think Europe will have a moment very soon as we see more and more investors looking at the European countries, opening offices there, and building their presence to benefit from the talent that is definitely there. I think Europe is strong in PE and VC's late stages, however, angel investing, and early-stage (pre-seed, seed rounds) are still lacking behind the US. The Nordic countries, Germany, UK, and France are setting an example for the other countries and activate the early-stage investing there going beyond the borders. I’m happy to see that the mentality and education system are changing, incorporating a more entrepreneurial curriculum and it’s now more popular and easier from the registration perspective to start the business in many European countries.
5. Can you tell us more about your “investment fails”?
As mentioned before, I did a spontaneous investment around 10 years ago knowing nothing about the process, so it was a big failure but again, it was a good experience and not a lot of money invested. You know the rule that you should invest the money you can afford to lose so no regrets!
Studies of the University of New South Wales Business School found that women spend more time researching their options than men and are better at matching their investments to their life goals.
6. Is this true in your case? How much time do you spend on assessing your investment? Are your investment trajectories really following your life-goals trajectories?
I think that’s true. We probably take more time to consider different pros and cons and we are less spontaneous in such situations. At least, that’s true in my case. Also, my sentiment, focus, and interest change in time. It’s important to invest in ideas you truly believe in, people you know for some time. If you are passionate about something it’s much more fun and you can relate better to the concept, understand the problem, and see the potential development of the business. Additionally, you never stop learning about emerging technologies and markets so you need to be aware of what you know and recognize in which space you have no or very little experience, and then the assessment takes longer.
7. Have you ever felt gender-biased as an investor? A story to share? How did you solve the situation?
No, personally, I haven’t experienced any situation like that. I kind of naturally bump into good and respectful people. I think there are many trailblazers already who were the first and walked the path setting the example for others. I have many woman investors to look up to and diverse investors have much easier access to space now than 10 years ago. However, I still wonder why so many people are resistant and do not raise their hands for the diverse team members, startups, investors to bring them to their companies. This is an extraordinary value so broadly available on the market!
8. The research shows that women founders are more likely to approach women investors when fundraising — What is your experience? What is the ratio of female-founders in your portfolio?
I think that’s true and I guess it’s because of a common understanding of some issues. There are obviously women related product categories that are better understood by women and it kind of happens naturally that women investors can see the value and breakthrough idea because they experienced the problem. The same is for men related businesses that solve problems from their world and that women may not get so easily.
For the ratio in my portfolio, it’s 1 to 5 which is not good and I’m aware of it. That’s why we work on the LUMUS angel investing group. It’s not about investing in female-led businesses just because there are women in the team. I guarantee no investor will do it if there is no prospective business behind. It’s about giving everyone the same opportunities and consider everyone equally. It’s about showing that we remove gender, race, nationality, background biases and it does not matter while we consider the business for investment. Nobody is better but the diversity, men, and women all together are the best composition and skillset you can have. There is never anything better only because of gender. It’s simplifying the complex case which has more components impacting the overall performance.
9. What do you personally do to help create more gender balance in the investment world?
We should lead by example and do even small things to re-build the ecosystem from the ground up. The data shows that the execution and performance of female founders are at least the same, if not better, than men. Diversity is the greatest value and it’s just at your fingertips. We just need to recognize it, invite them to our projects, and tremendously benefit from the input. I’m happy seeing more and more initiatives popping up on the markets that support diverse founders and we need to consistently do it until we no longer see the disparities. To be precise, let’s invite more girls to STEM programs, encourage them to get inspired, let them try it out. In the VC and startup ecosystem, be intentional when it comes to the funding criteria and at least ask for diversity on the founding team level. Bring some female investors to the fund and make the decision-making process equal for everyone, regardless the gender, nationality, age, etc. Show off success stories to ensure all founders know they are equally considered, and the biases are now getting smaller and smaller.
I’m involved in several initiatives supporting diversity in the VC and startup ecosystem globally and my goal is to make a difference one founder at a time until we no longer see the inequalities and biases in the space.
Here are a few organizations I’m involved in and I encourage everyone to take a look and also find a place where you can make an impact.
Female Founders — Global
Hack Diversity — USA
Swiss FinTech Ladies — Swiss
Zane VC — SiR
LUMUS — CEE
10. You are currently living in the US but coming from Poland — are there any practices/insights in terms of angel investing you have learned and would like to bring or adapt when investing in CEE?
I learned a lot in the US. I can see a lot of differences in mentality and dynamics in early-stage investing. I think we have a lot to do starting from education and changing the way we think about failures. We should encourage people to think big, take risks,s and try different things. Kids should see different paths in life and choose on their own. In the US kids learn how to pitch to their parents to convince them to buy a pet. Later on, they have a project when they need to register their company and they fail already many times by the time they come up with some serious idea and can do it for real. I feel like we still miss this dynamic and focus on entrepreneurship for different reasons. I lived in different countries in Europe (Belgium, Switzerland, UK) but I didn’t hear a lot about angel investing at least that time. If you look for the communities and organizations you can surely find them but we need more of them to speed up the innovation process in many countries. Crowdfunding platforms are quite popular though, so it’s surely a good start to get familiar with the topic.
11. Any advice for aspiring Angel Investors?
Start early and you can start from really little money, but you can already build your small portfolio and learn along the way.
12. Recommendations on books, podcasts, movies you are currently watching?
Every day I have some time blocked for catching up with the news and checking what the industry leaders publish on their blogs, via podcasts or newsletters.
Here you can find the collection of resources I recommend if you are interested in the startup and VC space.