For any startup founder looking for the next stage of growth, understanding why VCs say ‘no’ is as important as why they say ‘yes’. Investors get to see hundreds of pitches every month, but only one or two will get an investment. We decided to go straight to the source and ask our colleagues from VC funds why.
Here is our interview with Maciej Frankowicz from Shape VC, who introduced the team and their investment strategy. Along with it, he shared with us what they look for when investing in a startup.
Who are the Shape VC team members?
The fund has been established in 2018 by a couple of Partners with the support of Augere Group, one of the most experienced groups financing startups in Poland. The Managing Partner, Tomasz Głowacki has over 20-years long experience on Private Equity market, he is also a Partner at Riverside dealing and managing transactions all over Europe. I, Maciej Frankowicz, am the CEO and I have been investing through a VC fund since 2014 and have previous experience of developing my own startup.
A mix of both financial and entrepreneurial experiences makes us not only see a chance for making money when we see a project but also to spot the challenges every entrepreneur has to face.
What do you focus on at Shape VC?
We are focusing on technological projects in B2B sales model. It could be a DeepTech Startup whom we can help to achieve a higher technology readiness level or some software already close to commercialization. Our favorite investment areas are Industry 4.0, IoT, CleanTech, SaaS, automation and robotics, production technology, or MedTech.
What are the main things you look for in a startup?
In founders, we are looking for passion and determination. We believe that if you want to succeed, you need to be 100% into the project for so we are looking for partners who understand that. We care about strong technical and product abilities. Also, we are paying attention to previous experience, if someone in the team has already made an exit, then surely his next project is more likely to succeed.
In projects, we like to see a competitive advantage resulting from how the technology or product has been created and not from f.ex. marketing or sales skills of founders. We especially like these startups who are utilizing data analytics and develop their own algorithms interpreting them.
How do you support your portfolio companies?
We typically invest 250 thousand euro for 10-15% shares in the company at the seed and preseed stage. If the project needs more money but is really interesting for us, we are always happy to co-invest.
What do you provide aside from the financial backing?
For sure we want to be supportive to the companies which we’ve invested in. We help in designing the best strategy for the growth of the project. We eager to invest only in projects where we see a clear path for future fundraising. We work directly with founders and thanks to our network on the financing market we can help to get additional funding rounds from VC market or from other financial sources. More often, we support startups in legal and financial issues, acquiring key partnerships, or sometimes with employee recruitment processes.
One of your portfolio companies is Ukrainian startup DAC. What has this cooperation taught you?
DAC team has impressive technical skills and they are showing true passion and involvement in the project. Because we are in the European Union, it is easier for them to move around the common market and f.ex. make use of different startup programs financed by the EU and win partnerships from entire Europe.
Additionally, we found out that there is no cultural barrier for us, we get along very well and have a similar mindset. Poles and Ukrainians are culturally closer to each other than we are to many West nations. As Shape.vc, we want to be a connector and support for new startups looking for an entrance to the European market. For sure DAC as a debutant paved the path for the next projects and made us even more curious about who is going to be the next interesting project from Ukraine which we could work with.
How to attract Shape VC’ partners?
It’s easy: you can send a pitch deck to us at email@example.com and shortly describe your project. We’re trying to answer all the founders. If we see the potential to cooperate, we arrange a teleconference when we can meet each other.
Even when the project doesn’t fit in our investment policy we always think about if we know someone for whom it might be interesting. For ex. we are collaborating with few accelerator programs e.g. Concordia Accelerator or ReaktorX, which have an offer for Ukrainian startups as well. In conclusion, don’t hesitate to write to us and see if we can be of any help.