25. Januar 2023

Interview with Lin Gong-Deutschmann – “Europe’s Female Angel Investor of the year 2022“

Dear Mrs Gong-Deutschmann, first of all, on behalf of BAND and BAE, I would like to congratulate you on your title as “Europe’s Female Angel Investor of the year 2022”. I would really appreciate your answers to the following questions. Thank you very much in advance.

Were you familiar with the award “Europe’s Female Angel Investor of the year” through BAND or BAE? What does this prize mean to you? Did you expect winning the prize?

Yes, of course I have been following BAND’s annual awards over the past years and I have always been very inspired by the candidates and the impact they have created. I am deeply honoured and humbled to receive such a prize among those amazing nominees. It was indeed a surprise for me, as I know there are many great female angel investors out there who have also deserved this prize.

How did you experience the ceremony and gala dinner in Leipzig? What did you think about the laudatio which was held for you?

It was a magical evening with such a warm and positive energy in the room. I was happy to catch up again with friends, founders and colleagues, whom I have only met virtually in the past 2-3 years. The laudatio from Cornelia was truly touching and it was one of the most memorable moments for me. Especially the positive quotes from the founders I backed meant the world to me. My mission is to serve the start-ups, to serve the founders, that’s what drives me to be an investor and I cannot think of any better job.

Do you see an opportunity to use the award to increase your ambassador activities as female angel investor? Do you know the ratio of male and female investors in Sweden? Do you see a potential in a changing investment behaviour?

Let me start with a clear statement – The start-up ecosystem and also our economy needs more female leaders, and in general more diversity in order to prosper in the long-term. According to research by Boston Consulting Group, for every dollar of investment raised, female-run start-ups generated on average more than twice the revenues as compared to male-run start-ups. Also, according to many international studies, women have a slight edge over men when it comes to long-term gains. But yet, there is only about 2% funding going into female start-ups and women are still representing less than 10% venture capitalists today. It’s really not about women are better, but about diversity leads to success. Diversity of course does not only refer to gender, but also social-demographic segments, industry and cultural backgrounds.  There are many studies about founders with migrant backgrounds, too. Most Billion-Dollar Start-ups in The U.S. are founded by immigrants. The biggest hurdle for women is still lack of confidence. As a women, a mom and an immigrant, I feel the responsibility to voice it, to encourage and inspire others. Together we make the change. A change that the entire ecosystem benefits from, a win-win.

What about your start-up investments? How does your portfolio look like and do you have a special investment focus or strategy (i.e. EdTech)? What is the first thing you want to find out getting to know new start-ups? 

Currently I have a portfolio of 16 start-ups and I am aiming for a portfolio of 50 in the next 4-5 years. My focus is applied AI, or data-first companies, industry agnostic, and preferably impact-driven topics. The venture capitalist Marc Andreessen has once coined the biggest transformation today – “software is eating the world”, now “software is the world”, and I believe the next generation software will be smarter, solving problems using not only deterministic approaches (based on logical commands) but also using probabilistic methods (based on statistical inferences), in order to solve more complex problems with better insights, more accurate predictions, faster implementation and lower costs.

We are all gifted in different ways and the beauty of angel investing is that there is no silver bullet, and everyone could succeed in their own way. My strengths lie in the ability to connect different dots, to recognize unfolding patterns and to identify potential success drivers and models within it. Therefore I try to drill deep in founders’ view about the big picture, the future they envision, and their conclusion of selecting certain business models and technologies. I am looking for original thoughts, the capability of thinking through a complex topic, the instinct and resourcefulness of navigating through unclear and dynamic markets. It is at the same time a bonding process, I want to feel their dreams, struggles and hunger.

What are the main skills of a business angel apart from the finances? How would you rate mentoring and being a sparring partner for entrepreneurs?

You need to have 3 things to be an angel investor: money, expertise and network. You may not need all 3 at a top level to start with, but it is very important to have a spike somewhere, to differentiate and give a clear argument for the best founders to remember and choose you. From all 3 factors I believe network is most important and actually it is also the easiest to build in a relatively short period. I know many great angel investors have started by just being helpful and generous, with advice, and making connections. Remember, it is an ecosystem, founders are super active networkers, so your reputation travels fast and far. Therefore being helpful is essential, not only with the start-ups you have interest in, or have invested in, but all start-ups you get in touch with. Be honest, helpful and generous, it will not only get you to the table, it is also the key to stay at the table.

Can you tell us a bit about the Swedish start-up ecosystem. Are there special trends in Sweden? How would you evaluate them?

Sweden enjoys a great international reputation for a vibrant and successful start-up ecosystem. I used to joke and say everyone in Sweden is an investor. Swedes are generally very open for innovation. They are often early adopters and they do see themselves being the leader and staying as a leader in some topics like equality and sustainability. It is not by luck but the success is very much fuelled bottom up. Companies allow employees to run start-ups next to their daily jobs. Universities have accelerators and/or start-up hubs. Municipalities invest in building local start-up communities, offering courses and organizing events. At the same time, the market seems to be more liquid – the revenue requirement for an IPO in the Swedish stock exchange is relatively low and there is a very active secondary market. Sweden is a consensus-driven society. Most investors belong to one or another angel group or invest only with their friends and not alone. It reduces risk and enables diversification. It is also common to see much smaller ticket size at early stage, or people pool their money in one vehicle, and if the start-up is doing well, there will be investors at later stage to buy out the smaller investors from earlier rounds. So you don’t always have to wait for an IPO or takeover to cash out your wins.

What are you hopes and wishes for the angel investing future, especially the female one?

I wish more successful female leaders, founders and investors would come out and talk about their stories. Personally I don’t like spotlight and I am not good at personal marketing. For a very long time I thought it is wrong to even publicly speak about one’s success. I’m sure many women think in the same way. But in order to catalyse change, we need inspirations and examples. Therefore it is actually our responsibilities to share our journeys, learnings and give it a voice. Together we create an equal and sustainable future for our kids.

May the start-ups lift up the world, and may we lift up each other.

Thank you very much for your time.