Tech for Good is a monthly newsletter about the purpose-driven economy in Europe. I share noteworthy investments, market observations and personal experiences on everything that leads to a more equal, sustainable and healthier future. If you enjoy this issue, please like it above and share it with fellow readers.
Hi everyone!
In this issue, I want to touch upon 💸💸💸. What do personal wealth, purpose and diversity have to do with each other?
The world’s richest people all founded their own companies or inherited money from someone who did. If money equals power and the only way to generate enough wealth is to launch a company, then the current system is deeply broken since opportunities are unequally distributed.
Last month, Whitney Wolf Herde made market history when she went public with the female-first dating app Bumble. With the IPO, Herde joined a small club of 20 other female founded companies that went public over the last years.
If you look at the data from the best 40 VC bets of all time, it seems like the best bets are made if you invest in companies founded by white or Asian men. In many cases, those big wealth creators are people who are taking reputational, financial and career risks. Often times the people who can afford to take on such risks are actually the ones with the most privilege since they have a larger safety net, powerful network, first funding from “family & friends”, better education and are not concerned with providing for food and shelter like economically stressed people from less privileged backgrounds. Research shows entrepreneurship has often more to do with a moneyed family than a 'risk-taking’ gene.
If more companies are started by founders from diverse backgrounds, who have “successful” exits and become wealth creators, talent, money and knowledge can be re-invested again into the ecosystem, inspiring and generating the next generation of diverse tech leaders. I dub it the “wealth creation flywheel”. My beautiful illustration below shows you the mechanisms.
A prominent example how these positive feedback loops within the startup and VC ecosystem work is probably the PayPal Mafia. Currently, this flywheel is mainly driven by a homogenous group of people though. Our society must nurture innovation from a larger representation of society.
Since the tech and VC ecosystem is currently quite homogenous, there are two ways to approach the gap in wealth. On one hand, current investors need to take a proactive and intentional approach to shift the current status quo of funding. On the other hand, we need more founders from different backgrounds who are starting companies to work on meaningful problems and create wealth to fuel the next generation of talent, thus slowly breaking through the system generation by generation until we reach the point where wealth is more equally distributed.
If you have thoughts on this, happy to learn and have a chat!
🚨 News alert! I want to shed light on the purpose-driven economy in Europe not only by sharing noteworthy market observations, investments and personal experiences, but also by uncovering perspectives from readers of the Tech for Good Newsletter. Without further ado, here comes our inaugural community feature! He is actually a great example of the wealth creation flywheel: From launching an own company to investing now his personal wealth in the future generation of impact-driven founders.
👋🏻 Hi, my name is: Christoph Behn
👀 1. Who are you?
Entrepreneur turned Angel Investor investing in founders improving the world
💚 2. Why do you care about the purpose-driven economy?
The world faces so many problems and I am convinced that founders are the ones building solutions at scale, but they need backers who have been there before. This is where better ventures and I come into play.
❓3. How do you make an impact?
At better ventures, we are helping purpose-driven founders find the best angel investors and help them build their company as active angel investors.
🤩 4. Which startup trends are you currently excited about?
Well, everything around climate is exciting and I am not only talking about carbon-footprint apps, but rather deep-tech innovations that are really helping to change our carbon footprint in the long run, e.g. lab-grown meat, sustainable fuel.
💡 5. What’s your best personal sustainability hack?
It's not a hack any longer, but we as a family only have electric cars.
🌱 6. What’s your favourite sustainable consumer brand?
Everdrop, they are selling cleaning tablets and thus saving carbon and plastic. (Disclaimer: I am an investor)
🌱 Europe is leading the sustainability revolution
🇪🇺 European VC funds are building a community around ESG initiatives
📊 Investors love data. So why not dig into sustainability metrics?
✍️ A data-driven guide to effective personal climate action (super long read but highly recommended!)
🥗 How to start fighting the climate crisis over lunch today (this is the shorter version)
This month I was…
💵 …investing in sustainable ETFs using Trade Republic
From 🇩🇪
Launched in 2015
Raised €79m from Accel, Project A, Creandum
Yay: Since I am already a Trade Republic user there are no switching costs and in general their product is very easy and intuitive.
Nay: Downsides go back to their lack of user-friendliness in terms of education and information. Generally, you need to know exactly which ETFs you want to invest in and research on other platforms beforehand. Their offering is also quite limited. In the end, I chose iShares MSCI World SRI and iShares MSCI EM SRI even though I was quite disappointed since sustainable ETFs do not necessarily include companies that are sustainable in their product itself but the ones that have outstanding “ESG ratings” such as Microsoft.
🥛 … drinking oat milk using oat milk powder from Blue Farm
From 🇩🇪
Launched in 2020
Raised a financing round from Joyance partners and angel investors
Yay: Nice branding, less packaging waste, less carbon footprint, diverse team
Nay: I’ve found the taste still a bit “watery” and it’s some effort to make milk at home.
📝 … learning simple tips to be more climate-friendly on the interactive platform by Google, the California Academy of Sciences, and the Ellen MacArthur Foundation (submitted by a reader of the Tech for Good Newsletter - keep them going!)
🇪🇺🏙 There is a new kid in town. Jumping on the “climate wagon”, the new $240m VC fund 2150 has a mission to clean up and reduce carbon footprint in Europe’s cities
🇳🇱🥩 Dutch lab-grown meat startup Meatable raises €2m from Agronomics
🇳🇱🥩 Mosa Meat gets $10M to scale cell-based meat
🇮🇱🥩 Redefine Meat takes on $29 million for launch of 3D-printed meat-substitutes
🇨🇭🍗 Planted gets $18m to expand and diversify their alternative meat products
🇸🇪🥛 Oatly files for U.S. IPO
🇸🇪🤖 ImagiLabs gets €250k to get young girls into coding
🇩🇪🧼 Everdrop raises $21.8M Series A round led by Felix Capital for its dissolvable cleaning tablet
🇫🇷👗 Second-hand is booming. Vestiaire Collective raises $216 million for its second-hand fashion platform
🇺🇸☘️ Patch, a platform that integrates with businesses to mitigate their carbon footprint through carbon removal projects, raises $4.5M in seed funding by Pale Blue Dot, Andreesen Horowitz, Maple VC (Obviously this is a US investment, but worth mentioning since Patch was funded also by Malmö-based and newly founded Climate Tech VC Pale Blue Dot)
Acton Capital, HV Capital, Plug and Plug and CDTM teamed up to create a Sustainability Landscape. You can find the detailed overview of freshly spotted startups and organizations in the sustainability space in DACH here.
🚀 4 reasons why these underdog founders are the future of our economy
🧕🏽 Underrepresented founders are merely collateral damage
📊 Google for Startups published a report with Handelsblatt Research Institute and WirtschaftsWoche taking a closer look at how Germany is doing as a nation and base for women founders
👀 Georgie Smallwood (currently CPO at Tier Mobility, previously CPO at N26) founded Auxilia, a community for women interested in co-founding or joining early-stage startups
💸 Broaden your view of ‘best’ to make smarter, more inclusive investments
💵 Do you need a wealthy background to be a successful entrepreneur?