Founder-market fit is one of the most critical factors in a startup’s success, and operators (someone involved in the day-to-day operations of a startup) turned founders have an almost unfair advantage in finding that fit. Data shows that a lack of expertise and business acumen among founders contributes to failed VC investments.
The same principle somewhat applies to VC operators (companies usually started by former startup founders). While there is no definitive proof that VC operators make better investors, recent research shows that founders and operators who become VCs are significantly more successful in companies they support than traditional investor companies.
Operator VCs have a long history in Silicon Valley. However, their adoption is less widespread in Europe and Africa: only 8% of VC firms in Europe and Africa are run by ex-operators, compared to almost half in the US. OpenseedVC is implementing the model in Africa and Europe with a new fund.
The company, which plans to be the first to check in startups launched by operators in both regions, has reached its first close of its $10 million angel-style early-stage fund. General partner Maria Rotilou said “the first close is in the millions and fundraising is still ongoing” without specifying how much. OpenseedVC hopes to reach a final close within a year, he added.
Support funded entities… and operators
Rotilu founded OpenseedVC with a clear vision: to invest early in experienced operators who want to start their technology companies. In a statement, OpenseedVC said it will provide these founders not only with capital and belief in the early stages, but also with the support of a community of experienced operators, which currently includes more than 50 people.
“If you support agencies that have identified a problem and are taking the leap to develop their technology, you’ve likely recognized a common challenge: the need for capital and guidance from other experienced individuals. To address this, we are focusing on strengthening the operator network in four key areas,” Rotilu said in a chat with TechCrunch.
“In the early stages, software engineering expertise is crucial. You’ll need someone who has recruited technical talent, built teams and understands infrastructure design, offering invaluable first-hand experience. So if that’s the common thread, I’d say first-hand experience is what we optimize for in software engineering, product, market, and people and talent.”
Most of the people in OpenseedVC’s operator network are people Rotilu has either worked with or received referrals from. Some are also limited partners in the fund, although they are not earning as of now. Rotilu also mentioned that other LPs include founders and professionals from traditional and technology businesses and high net worth individuals across Africa, Europe and the US.
Supporting start-ups in Africa and Europe
London-based OpenseedVC is targeting at least 60 startups over the next five years. The early-stage fund, which it says operates with an open application process and allows founders to apply without needing an introduction, will provide checks of up to $150,000 to startups focused on the future of commerce (including B2B software, AI and fintech). , the future of work (productivity) and digital health.
“We are looking at the early stages. this is our sweet spot. Openseed is willing to do pre-seed investment, but the early stage of pre-seed because the later stage of pre-seed is more where you find traditional VCs. We tend to move independently and quickly — and we don’t necessarily need a founder to get a lead investor or anything like that before we invest,” noted Rotilu. He added that the fund is interested in specific founder profiles within its broader operator-focused lens: sector experts (operators at high-growth tech companies, including first-time founders) and second-time founders who have created and exited a startup .
So far, the early-stage fund has made two investments: one in a UK-based AI-enabled supplier dispute resolution software and another in Intron, a speech-to-text transcription model for underserved accents, starting in Africa.
“We chose Africa and Europe to apply our thesis to work in these regions. Our thesis is that by supporting experienced operators at the beginning of their journey with the right capital and peer support, you can create a diversified portfolio that produces incredible returns for investors and provides vital support to aspiring players when they need it most,” said Rotilu. , who prior to OpenseedVC, invested in many areas with different funds.
Before starting her fund, Rotilu was an operator in various roles, including country manager at Uber and general manager at Branch in Nigeria, where she helped both tech companies reach millions of users. She later pursued an MBA at Oxford, where she served as managing director of the Oxford Seed Fund, one of the largest student-led funds in Europe.
Strive for a diversified portfolio
During her MBA, the operator-turned-investor with a background in computer science 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 country africa. After joining Octopus Ventures, one of Europe’s largest funds, as director and fund manager of First Check Fund, their £10 million early stage fund for European B2B software, fintech and healthcare startups.
Rotilu said that at Octopus she realized the need to focus more on Africa, a market where she had made several angel investments during her professional career. The London-based VC firm provided little avenue for this, and Rotilu, who also wanted clarity and autonomy to develop a strategy she believed suited her experience as an operator and investor across Africa and Europe, saw it as opportunity to start her VC firm. .
The growing number of female-led VC firms globally is a positive trend (even though it’s still difficult for women, especially women of color, to seek funding or raise capital). As more women participate in venture investments and more LPs and firms support them, this trend will increase funding for women-led startups, setting the stage for success for everyone involved. Most female-led funds are aware of this importance, so it’s no surprise that OpenseedVC will also actively seek to support female-led startups.
“There are very few female-led funds globally and we have a specific perspective on what a diversified portfolio should look like. We focus on differentiation across geography, industry and gender,” noted Rotilu. “A lot of work is being done around diversity and as a fund, we apply a gender lens to our portfolio strategy. We’re aiming for a really diverse portfolio, aiming for a 50/50 balance in the co-founding teams,” he said.
