Maria Wagner - Investing Enlightenment!

Maria and I met for breakfast at the gorgeous Covent Garden Hotel to discuss her career to date and her insights into the world of investment. She was barely able to eat her omelette as she gracefully answered the many questions I came out with on what she looks for in potential investments to what makes an effective board. Maria is an Investment Director at Beringea and previously was Managing Director of Birchbox UK, the fast-growing beauty e-commerce and subscription business that is expanding from the US. Read on to to discover Maria's story, what she learnt from being on the operations side of the table and her advice for female entrepreneurs! 

Meet Maria

Current Job Investment Director at Beringea

First Job Analyst at Goldman Sachs

Go to meeting spot Covent Garden Hotel as it’s next to my office

Favourite book The Goldfinch by Donna Tartt

Necessary extravagance At least one fun long-haul trip a year

Recent inspiration The SheWorx Summit last week – lots of inspiring women founders and women VC investors coming together to offer advice and help women-led businesses grow

Top networking tip Be interested in what the other person is saying and try and build a conversation from there

Most interesting tech firm in London right now Honeycomb which is launching programmatic TV advertising

 

The Journey

Can you share a brief history of your career before Birchbox and your lessons learnt?

I grew up in Cyprus and went to MIT to study Economics. I subsequently landed an internship at The World Bank before joining Goldman Sachs as an analyst in New York. I then went to Harvard to study for my MBA and afterwards I joined McKinsey New York in TMT. My main takeaway from those experiences was that I enjoyed the deal making aspect but I also enjoyed being more involved in businesses rather than just being on the finance side. I therefore felt that PE/VC would combine those two things, so I moved to London and joined GMT Partners focusing on TMT investments and then Virgin’s internal investment team. Having been on the investor side for a while, I was intrigued about what it would be like to be on the other side, and then the right opportunity came and I joined Birchbox as UK MD to help them launch into Europe.

Tell us about your time at Birchbox

It was a great experience and I think having that experience of what it’s like to run a start-up has made me a better investor. For me, the product appealed greatly as I don’t spend a lot of time looking for the best beauty products so I was attracted to the concept of curated beauty samples arriving at my door that fitted my needs and that I could try before buying the full-size version. It was also a fantastic set-up to join as there was proof-of-concept and funding from the US company but it was a start-up in the UK - the best of both!

My remit covered pretty much everything as each country was largely run independently. I oversaw sourcing of the brands, marketing and PR to attract new customers, editorial to build the local brand personality, operations and customer service, budget and growth strategy. Hiring also took a long time, particularly as I was getting up to speed myself and we had to hire 4 or 5 great people very quickly. It was a steep learning curve!

What did you learn from your operational experience?

I learnt a lot about how things get implemented in practice. You see business plans on paper but having done it I am a better assessor of what it takes. For example, how many people you would have to hire to achieve certain targets and whether that is an achievable hiring plan. And then countless of functional learnings from social media tactics to running payroll to customer service best practices.

What has been your motivation throughout your career?

To keep learning and have an interesting job that challenges me. I want to feel like I am having an impact in the world around me.

 

Beringea

Tell us about Beringea and your investment philosophy

Beringea is a VC / Growth Capital Fund. The name comes from the landmass that connected Europe to the Americas in the Ice Ages. So the ethos of the fund is around helping European companies expand to the US or vice versa. It is also a differentiator for us as not many European funds have a US presence. The investment team is 9 in the UK and 5 in the US and we have about $675 assets under management between the two countries and across 65 portfolio companies. We invest in companies that have at least £1m in revenues and we invest £1-5m initially and can invest up to £12m in each company in total. We also co-invest with our US fund and have done 4 co-investments to date. We are sector agnostic although most of our recent investments have been in ecommerce, marketplaces, SaaS, digital media, ad tech and ed tech. Traditionally we mostly led investment rounds but we are increasingly doing more co-investments as well.

What do you look for in potential investments?

Overall, we are different from most funds in that we don’t necessarily go after high risk, high return companies (or “unicorns”) but rather look for companies that will give us solid returns and are less likely to fail.

Specifically, we look for strong teams that have ideally run a business before, or have sector expertise, and we want to see that they can inspire and hire great people. We also look for a big market with a gap in it that the product addresses. High revenue growth is equally important as is traction in KPIs if the company is launching a new product or a new country. In contrast with most VCs, we prefer companies that are capital efficient and want to be confident that they can get to profitability with our round or the next round. Finally, we look at the unit economics of the business if it is B2C business and the sales channel effectiveness if it is B2B.   

I do think we look at things with a different lens and hence I think we see most deals that we want to see. The UK/US approach is also a great differentiator for us.

What drew you back to investing?

Investing is where my heart lies. I enjoy being involved with multiple companies at different stages of development at the same time. It’s a great privilege to be at the forefront of technology and meet new brilliant entrepreneurs every day launching the latest products and services. It’s also very rewarding to be able to help entrepreneurs grow their companies and navigate the ups and downs of building a new business or disrupting a sector.

What technology trends excite you right now?

  • Education
  • VR/AR
  • Machine learning

We go to a lot of conferences to learn more about upcoming sectors and we do deep dives occasionally. We also use our network and get to know experts in different fields (we are helpfully invested in a business called Third Bridge – which can help you access experts in all types of fields).

How actively does Beringea work with its portfolio?

We always take a relatively active role and sit on the boards of most companies that we have invested in. In terms of time outside of board meetings it does depend on each company, for example, if they are exiting, fundraising or going through a tough time we tend to get more involved. An effective board needs a clear vision and a clear understanding of what’s working or not. Constructive challenge and conflict is also healthy at the board level and the only way to grow, but having an aligned vision and talking about it often makes everything a lot easier.

In general we are a patient and supportive investor. We do concentrate a lot on our portfolio because our fund model determines that we aim to make a good return from each company. We therefore do several follow-ons each year. In addition, because we are an evergreen fund it means we don’t have a deadline to exit companies. We take the lead from the team on timing of the exit but once they do decide we help connect them to interested parties and CF advisors. We try to keep an eye out and get to know potential exit routes and start conversations early.

Beringea has also started organising more events to connect our portfolio companies. We host a portfolio summit day once a year to bring all our CEOs together and we also host smaller sector-focused get-togethers amongst our portfolio companies. Finally, we host drinks for exciting entrepreneurs in different sectors that are probably too early for us to invest in but we want to keep in touch with them for the future and also help them get to know and support each other.

 

Women in Business

What advice would you give to female founders?

If you are trying to raise money from a VC, Go big and go fast.

The thing I have noticed about female founders is that they often wait until their pitch is perfect before they go out to speak with investors. My advice is to talk to investors earlier as their comments may help you refine your pitch and evolve your business model faster. The “go big” part is because some of the business models could be more ambitious. Have a big, compelling vision and design a business that could capture a large market share and hence return attractive returns for investors.

What do you discuss during an investment committee?

Founders might be surprised about how much we talk about them at investment committee. We also spend quite a bit of time on the ‘what if’, i.e. the downside case, and discuss what levers management can pull and whether they would be able to fundraise further. We of course spend time discussing the upside and the potential returns and all the KPIs that get you there.

How can we do better to attract and retain more women?

Schools need to play a bigger role in teaching entrepreneurial skills and business tools (such as accounting, coding) to girls (and boys!) at an earlier age. Also small projects of running a fictional business will give girls the practical experience and confidence that they could do it in real life one day. We also need to pay it forward and remove the smoke and mirrors as women don’t ask for help as often. Finally, I believe that investment is a great career for women as it actually offers a lot of flexibility. I don’t think this is well known and may encourage women from the industry at the beginning of their careers.