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Hi, and welcome to another episode of the Innovation
Conversation. Today we are joined by Daria Ljotović.
Close enough? Yeah, very good, very well. Daria,
welcome to the podcast. Thank you, happy to be
here. Daria, would you like to introduce yourself
to the audience? Yeah, my name is Daria. I'm
originally from Belarus and I moved away 10 years
ago, and currently I live in Amsterdam. My professional
experience was always about the venture capital
side of building a startup. And yeah, I've been
in the startup support services. I've been in
accelerators. Now currently I'm working at kind
of an investment firm, as we call it, but we
have an accelerator and follow -on fund. So,
and I'm very, very passionate about this industry.
Also, as being a woman, as being an immigrant,
I think there is a lot venture capital can do
to kind of create innovations using also different
types of backgrounds and different people as
well. So how was that transition like? Because
moving to Belarus, to the Netherlands, I guess
it must have been quite hard. Yeah, it's kind
of worse actually, true. I did my bachelor in
Belarus and I was very... I got involved in kind
of in a movement called Global Entrepreneurship
Week. It was all about startups and entrepreneurship
innovations and through that I got in touch with
the startup ecosystem in Belarus and I was working
a little bit in there also while still being
a student and then I understood... that in order
to support Belarusian startup Go Global and actually
enter a bigger market, I need to get this knowledge
of a bigger market myself. So that's where the
initial idea came from, that I wanted to get
the European experience, I want to maybe get
a degree, so I started to explore the options
how I can get that experience, and then I found
the university in the Netherlands. It was like
a kind of an MBA program that was focused on
entrepreneurship and international business.
So I got the scholarship for that program, but
accepted. So that's why, or that's how I decided
to move. But still, and it was, I think I would
consider it as a pretty kind of flaky and comfortable
environment to move in where I had scholarship,
I had university. It was quite easy to move when
you have like university friends. and so on but
it was still quite hard also cultural wise language
wise for me it was also difficult in the beginning
and then my idea was that i will like study i
will get some network some understanding how
the how everything works and then i will go back
and bring it to belarus but it never happened
i stayed first i stayed because i want to get
more and more experience But then the whole geopolitical
situation was getting worse and worse. And I
understood that I don't want to support the government
in there, I don't want to support the politics
there, and I would better stay in the Netherlands.
Yeah, so that was the tradition. But overall,
I would also see... I saw immediately that coming
from kind of Eastern Europe, we have a little
bit of a different... work mentality and the
drive to work so it was quite easy for me actually
to study because I saw that I couldn't just like
I don't take more hours to study and for me it
was normal and then when I started to work I
also saw that I could do more and I was capable
of doing more but I think it was my kind of upbringing
that we have to work hard and a lot. So in the
beginning, it was quite easy to have my foot
in the door because I knew that I can do a lot
and I can work hard. So from that perspective,
it was good, but yeah, it brought some other
challenges later on. I was just about to ask,
like, what were the main differences between
Belarus and the Netherlands in terms of the work
mentality and stuff? Yeah, I think in other words,
in the very beginning it was very difficult for
me to accept that people have life. So it's funny.
Now when I reflect, I really respect the Dutch
culture. I really respect, admire. But in the
very beginning, when people would look at the
watch and say, yeah, five o 'clock, I need to
go home. I was like, yeah, how? But it's only
five and we still have a lot of work to do. How
can you go home? And I could not understand that.
I also couldn't understand why people would like...
I was also quite honest, I didn't have family,
but people would prioritize going back to their
partners or their families versus like going
to a work event or going to like a work trip.
For me, it was like, wow, it's exciting. It's
like it's work. We can achieve so much more if
we do more. The Dutch culture is way more oriented
on the work -life balance, which I now respect.
But back then, it was difficult to accept. that's
one part and the second part was also difficult
to adjust to the planning ahead because in the
dutch culture yeah you need to plan ahead also
with your friends with everyone even like super
close people but like you plan a date two weeks
in advance you play you plan a dinner with your
friends like a month in advance otherwise all
the calendars are ready pre -booked and work
-wise it was also if I wanted to have a colleague
or time with a colleague I needed to plan ahead.
I needed to think okay like in three days I will
have these questions now I need to plan this
meeting now. It was difficult also to adjust
because if I had a question I wanted to have
an answer right away but very often it was not
possible. and in the beginning it was very annoying
but it also taught me quite a lot in terms of
preparation and planning and structure and so
it gave a different perspective of how to use
everyone's time efficiently so that was yeah
it was a very nice learning but in the beginning
I remember I was really really annoyed but on
the other hand I could also see that because
I was Like right away when we're flexible and
I could be way more Kind of Proactive and more
independent. So that brought me the career growth
opportunities quite fast When did you move into
the the mental health space in the VC world?
Yeah, so right after the university in the Netherlands,
I went to work for a Dutch accelerator. It was
just in the beginning, it was an accelerator
company. And there, I actually worked there for
seven years. And while also my time there, we've
transitioned a company from being just an accelerator
to a VC fund. And we've raised three funds and
it was about It was more about like impact overall,
it was health, food and emerging tech. But in
that space, I started to understand the importance
of making something good for this world, or at
least not harm it. That's why I understood, okay,
I like the idea of using capital for good. I
understood the kind of the rules of the game
that to be in a VC, you need to make a rich man
richer. But I also understood that I want to
do it in a way that will make an impact on the
startups, for example, we would invest this money
into. Yeah, so I was in that company and I've
changed also my roles quite a lot, but in the
end, I was responsible for the setting up the
backend of the company and still providing the
accelerator services to the startups. And also,
I was playing a lot with how or what kind of
support services startups really need to grow.
And in that company, we focused a lot on the
metrics and business growth and like sales and
like pushing, pushing, pushing. And I also saw
that very often it would bring some results,
but also very often it will come with a cost.
Like startups founders were getting divorced
because we could observe them like for five plus
years. So we could see that they would struggle
with their friendship, their relationship, romantic
life, house. They might get successful, they
might bring the returns, but it would bring them
some damage, I would say. And then I started
to question, okay, where the boundary is. Both
worlds, pure making money is important, health
is important, and how to merge it. And then after
that company, I moved to another, but basically...
The journey was not as straightforward, but currently
I'm at an investment company that I started very
early on. So there was the person who, his name
is Eugene, he has a few successful businesses
and he wanted to reinvest this money back into
the startup world and support the founders. And
he also had this vision in his head that he wanted
to support impact -driven founders. So, and that
was the stage where I joined, where someone with
finance or with capital had an idea and I joined
in to execute on this idea that, okay, let's
build a company that will invest in startups.
And then we were talking a lot and brainstorming
and doing some market research in terms of what
are the areas we want to invest in and what would
be the added value from our side. And we both
quite immediately agree that we want to make
sure the startups support it not only on the
business side but on the mental health side because
he has been successful founder for a few times
he also went through a lot of personal changes
and a lot of personal troubles and kind of while
surrounded by people who also believe that business
is not only struggle I understood that this is
what I also want to do and what it's basically
what I can also change, maybe it sounds very
narcissistic, but that's what I also can change
in the industry a little bit is to bring this
awareness that investors' responsibility is not
only to push the startups to grow, but also to
provide the space where startups are not burning
out and sacrificing their lives for profits or
for investor profit or rich people profit basically.
how do you manage that because obviously being
a startup it has a lot of stress it has a lot
of tension yeah but also from a VC perspective
the stress is always will the VC be happy with
my quarterly results exactly i guess with you
guys it's slightly different it's okay we need
to be happy with the financials but we also need
to be happy with you know your emotional well
-being how does that work it's we're still figuring
that out to be honest so It's true and it's it's
actually three levels. I think the founder house
is one level and then the second level Yeah,
the investors need to bring the returns to their
little piece I would say and then the third level
the investors also need to stay healthy in that
process and we also don't talk about that part
so for now and Currently at currently we are
in a quite alike position that we don't have
the little piece to report to so there is one
level less But still we also have our own ambitions.
So we also want to make some returns and make
kind of money out of what we are doing. So the
pressure of investing and getting some returns,
we still have it and it also affects our mental
health. So what we are doing now is that when
we invest, well, when we make the investment
decision, we always analyze not on the business
side. but the startup's personality side and
the openness to discuss such kind of things and
the openness to work or openness to acknowledge
that at one point of that time they might need
some support with their kind of staying healthy
attitude. So we do the personality test, we talk
to the startups openly about that while they
join. So we invest... Startups join first at
accelerator program for three months We give
a little bit of cash during that program and
after the program we do a proper round where
we give a bit more cash So throughout the accelerator
program we build the program on three pillars
I pillar so it's basically how I feel as a person
as a founder as a human being then we pillar
It's like how I as a founder feel myself around
the peers around me, how I feel around investors
or mentors or other people and how we as a team
feel together. And the third level is EAT Pillar
and EAT is their business side. Metrix is a hard
core business. And we based on the three pillars,
we build the program curriculum and we talk or
have conversations to the founders always around
the three pillars. So around, no, around... Each
pillar is quite straightforward. We have the
workshops, we have mentors, we have growth partners
who set up goals, set up experiments, analyze
these experiments, create hypotheses, and it's
a very straightforward site. And I think it takes
approximately 50 % of the curriculum. Then we
go to the V pillar. It's a bit easier for startups
to go into there than I, for example, pillar.
So we pillar, we do the peer -to -peer sessions
where we take ourselves out of accusation. We
invite a professional kind of mediator slash
coach slash therapist, but not really, but he
doesn't have a therapist role there. It's more
like a coach slash facilitator. And he facilitates
group discussions around certain topic. And it's
a lot. VC fund or as an investor, we promised
and we keep this promise that we don't talk to
the therapist about what's happening in the sessions.
Basically, everything that's happening is confidential
and we never know exactly what's happening. The
only thing that we are allowed to know and we
know is the topics. So we can then, the main
topic that we discussed, so we can use these
topics for building the program curriculum. or
kind of to make the curriculum stronger. So usually
what startups are discussing, very common topic
is that they're afraid to sell and the fear of
the fear always takes a lot of energy. And they're
so afraid to go out, talk to the customers, to
get the rejection. And they are burning out because
they have, they're losing their energy in that
fear because they still do it. They have to do
it because we push them to do it. But the fear
eats them out a lot. So they work together as
a group on this fear of how to overcome this
fear. And this, for example, one of the topics,
the second topic could be another topic that
pops up very often is how to manage a team as
being a single founder. How to fire, how to hire,
how to make the right decision, how to not to
be afraid again. So again, we work a lot with
fear. And what we see when people spoke speak
out loud about their fear when they actually
are allowed to put it out there and not to hide
it that yeah well I'm super afraid to go out
and to do like 20 custom interiors but I'm going
still to do it. It usually for them gives some
energy back and it becomes less difficult so
we see even by talking about that it becomes
easier for the startups to actually execute on
that. And the third level it's eye tracks where
we have actually we have therapists and coaches
in the program who one -on -one work on some
specific requests from the startups to yeah because
some of things cannot not be discussed in a group
sometimes it's too private but and here that's
where the challenge comes for us now is we don't
know how much we can push people to actually
start talking to a coach or therapist versus,
well, it should be a pool where they actually
come to us and, hey, I want to discuss this and
this. And this is where the ethical role of VC
comes in. And we don't know yet what is the right
answer here, like whose responsibility it is
to bring the problem up and to push the problem
to be resolved. Is it the startup side? Is it
the investor side? For now, we decide that it's
a startup side. we provide the tools and the
kind of frameworks to work on it. The downside
to that is that it's difficult for a startup
to focus at the same time on growing the business
and working on their mental health. Usually it's
quite difficult to do in parallel. Usually they
burn out and then focus on mental health and
then go back to the business. understandable,
it's very understandable, but yeah, how to put
it together at the same time. This is something
we're still figuring out now. It's quite fascinating
what you're doing because every startup I talk
to, or every founder I talk to, they always talk
about their journey they're on, right? The beliefs
that they had in the beginning are not the same
beliefs they're going to have six months on the
line or years on the line. And you know, there's
a lot of doubt that happens along the way and
you being able to provide them with mental health
support and guidance and counseling that actually
makes a huge huge difference because they don't
need to fight that battle alone they actually
have a support group right so i'm assuming the
founders are quite happy in the process i mean
what's been the feedback so far yeah so far it's
so good i mean the the one main metric i'm proud
of is all the startups recommend other startups
to us. So they actually that our pipeline, our
deal flow comes from the recommendation. And
for me, it is at least at this stage of our business
is the most important metric because we're still
quite young, we're still building our deal flow.
So they all are happy and satisfied. Of course,
there is always things to improve and it's normal,
but we also position ourselves as a kind of a
lean company where we ask for feedback and we
improve. Things we could for sure improve and
other things around, yeah, helping start up to
get access to market, to get more introductions
to the relevant partners and so on. But providing
this safe space to be vulnerable. and providing
the safe space to try different things. That's
been very kind of appreciated and valued by the
startups. We also have some queer startup founders.
We have startup founders with very difficult
backgrounds. And what we also see is... For me
it was like super strange to understand because
I've never was deep in the topic but apparently
queer founders it's also for them it's quite
difficult to get fund funding and usually they
go to also queer investors and there are very
very few funds that focus on investing queer
founders and for us when we kind of we just looked
at the business and we liked it and that's okay
but and also for us it was quite easy to get
the personal connection with the founder right
away. And then we talked about that afterwards
and they've mentioned that it was difficult for
them to open up, even like to kind of say that
they're queer. For me, it was like, oh wow, it's
like, without even noticing and doing it on purpose,
we understood that we can also support the founders
who are not necessarily. Accepted in the society
yet even though sense of first century so it's
weird But yeah, so this was quite positive. I
was like when you mentioned about the values
and the motivation One of the exercises we're
always doing the very beginning for the founders
And I would recommend actually to do it to all
the founders like I mean everyone can do it at
home but basically What we did we wrote a list
of like 10 the most common motivations why startups
are building a startup. It's like to make an
impact, to earn money, to do something good to
the world, to solve a problem. But there were
also some motivations like to get the world's
recognition, to kind of something that is usually
considered as a wrong motivation, where you want
to be like... you want to get love, or you want
to get recognition. Basically something that
is not very commonly talked in the society. And
then we asked all the founders to pick up one
motivation that they all think that they chose
to build a startup with that motivation. And
all of our startups are usually using the impact,
making something good in this world and supporting
people and building a solution for like a very
big problem. So they choose this. This motivation
is the first round and they have to pitch to
their peers why kind of explain how that motivation
impacted their decision to make a startup. And
it usually comes okay, quite natural. quite comfortable,
but as a reflection for the first round, startups
are usually saying that it feels something like
wrong. Like it feels like I'm overselling it.
It feels like I'm not such a good person in my
heart. Like, but I'm just pretending that I want
to build something great for this world. And
for the second round, we asked the startups to
choose a motivation that the least resonates
with them. And usually they choose money. They
just want to earn money. Yeah. And then they
pitch to their peers that motivation. Like they
say they started a better startup because they
want to get rich. And they kind of for two, three
minutes have to like act on that motivation.
And when we do the reflection round, they see,
they all see that it comes so much more natural.
For them, like the motivation to be recognized,
to get love from their parents, to prove something
to their parents, to their partners, or to earn
a lot of money, it comes way more natural. And
then for us, this exercise is so important because
we want to make sure that founders accept all
the parts in themselves, good and bad, and they
don't feel shame that they want to do, they want
to get rich, they want to prove something to
their parents, even though they're not kids anymore.
And while they're accepting that, for them the
energy level usually kind of... equals out a
little bit, they'll stop losing some motivation
to pretend that they want to do something good
for this world. So that's also a very interesting
exercise that we've learned to do, to accept,
to help founders to accept who they are, what
they are, and what they are doing. And interestingly
enough, we as an investor, we never changed our
opinion or we never started to think worse about
the startups. if they say, well, I just want
to prove to my dad, or I want to get love from
my dad. And I was like, yeah, great. Great motivation.
You know about it. You will achieve your result
while using that motivation, but be honest to
yourself. And that usually helps a lot with building
the path forward that will be a bit more easy
and straightforward in terms of the mental health.
It kind of reminds me of the, you know, those
Miss competitions and the common joke is they
always say world peace. And it's also all these
corporates who want to do something like sustainability,
right? It's also considered very often as a marketing
tool, which is a great marketing tool. Just be
honest about that. Just don't lie to the public
that you want to do something really, really
good. Yeah, even if you're doing it for marketing,
it's still better for the society, but just say
you're doing it for the marketing and that's
it. It's tricky to balance that. I'm just thinking
the biggest, one of the funniest things in history
is the fact that the Nobel Prize was actually
created by a guy who invented Dynamite and the
Alfred Noble was feeling so bad about himself
and what he created that he decided to create
something for good, which was a lot of price.
But he ultimately created something that was
just, you know, a pure money making machine or
product. Exactly. But we also see the same in
the venture capital now. We see a lot of money
coming from the industry that are a little bit
like not good for the site and no gaming or gambling
or porn industry. there is kind of still there
were a lot of venture capital money coming from
that and they try to invest in the good startups
which is partly controversial but partly if it
if at least they don't bring it back to the industries
at least they've earned their money and then
okay they understood okay i did maybe something
wrong for this world and i want to do something
better and maybe it's better if it didn't happen
at all but now Well, because it happened, the
money will go to the right place. So again, being
honest about why and what you're doing, I think
it's super important. It's a fine balancing act,
isn't it? The whole ethics of it and where the
money is coming from and all that, where you're
going to invest or not. Even when it comes to,
for example, money from oil. people like to think
oh yeah money from oil is evil but in reality
is it though? because let's look in another way
they all got money from oil and they actually
transforming the country for the you know much
better because of that so yeah and I think again
I like it is controversial that I like partly
want to say yeah I would also think like that
part of me wants to say well no like it's better
not to take money from oil but if you're in the
situation again if the company if everyone is
honest and transparent I think then I, for example,
can make a very informative decision if I want
to use this money or not. But if it's hidden,
like if it's sold differently. So it's an ethical
question. I don't think it's a philosophical
question, I would even say. How many startups
do you get in each year? Yeah. So we run two
cohorts per year. And we structure it in the
way that we take approximately 15, like five
zero startups in the beginning of the program
and we observe each other for the first one month.
So the startups can get to know us to see if
we add value or not. And then we can observe
a startup to see if they can execute, if they
can learn fast enough. if they are aligned with
ABO values, if they're open to feedback and so
on. And after one month, we have a stage gate
where it's a two -way street where we both decide
if we want to continue or not. And let's say
if we decide to continue, usually it's approximately
like 10 startups we continue with, where five
startups, for different reasons, either stop
working with us, mostly they... Usually the reason
is that they're too early. They don't have enough
resources in the team to do all the experiments
we want to do. For example, they still need some
time to build an MVP that will work to test.
So we decide with them that they will wait until
the next cohort and they usually join in the
next cohort of the startup. So in the end, we
end up investing approximately in 10 startups
per accelerator program. and the follow -on investment
we can invest up like actually almost to everyone
or in everyone as a co -investor so whenever
they raise their next round we will co -invest
up to 300k co -investor opportunities as a co
-investor and afterward for the follow -on investments
we are now currently raising a fund so we will
have some LPs to report to will be fun but now
we are raising the fund to be able to support
those startups and already invested in for way
longer. And what's the rate of failure rate?
I'm going to say what's the progression rate
from, I guess, C to series A that you have so
far? We're quite early in this specific company.
We just operate one and a half years. It's pretty
early to say, but so far we invested in, I think,
15 plus eight, basically 23 companies. And out
of them, I think four raised the first round
within a year. So it's not bad, not good. It's
just a very, I think, average rate on the market
right now. But in the past, let's say in the
company I used to work before, it was a very
similar model. I think the follow on rate was
approximately, the first follow on rate was approximately
66%. which is quite good. And I think approximately
40 % will continue raising the fund for the next
rounds. Pretty good stats actually. It's not
bad, but I think it also what helps in that is
very specific domain specific startups, industry
specific startups. And those industries that
are like agri -food or energy or health is something
that is nowadays especially quite popular, I
would say. So there are a lot of specialized
funds invested in that. So it's not too difficult
to get access to finance if you have some traction
and if you have more or less good teams. So it's
possible these days, I would say. They're probably
slower to, I guess, to prove profitable or to
prove that. So it's a bit of a long -term bet,
isn't it? It's for sure. It's especially in the
agri -food and the energy domain. Yeah, it's
like, yeah, if it's especially quite hard, it's
still software, at least what we've invested
in. But if it's a difficult technology that needs
a lot of time to get to the market, so yeah,
that would be a bit longer to get profitable.
And it will be like, yeah, to find a business
model of work in the energy space, it's quite
tough. But currently, for example, in the mental
health space, we invest in mostly B2C consumer
apps. And this is a bit, uh, I could say maybe
not profitable to, but to get some more sustained,
like some proper sustainable traction becomes
possible. It's expensive, especially if, uh,
they start using the traffic and buy ads on like
meta or Google, it becomes quite expensive, but
with the proper experiments and proper, um, enough.
this heady cycle like hypothesis, assumptions
and experiments and so on. It's a bit easier
to find the unit economic that will work. So
it's possible still to get profitable a bit faster,
but sometimes it's quite expensive exercise to
do the first experiment because yeah, traffic
nowadays is quite expensive for the bit to see
consumer apps. So the key verticals you guys
invest in are mental health and what else? Your
mental health, education, future of work, sustainable
finance. That's mostly about like teaching kids
to use finance or basically how money can be
used for good. as well. And currently we're exploring
ethical use of AI. Ethical use of AI, okay. Because
this is also very controversial topic and very
hot topic right now. So basically what we believe
in, and maybe I should have started with that,
but there are a lot of problems in this world.
There are wars, climate crisis. There is this
like fear of losing jobs because technology is
exponentially developing. There are a lot of
problems and we believe that those also problems
arise in three levels. The first level, because
I'm as a person is not connected to myself as
a human being. Yeah, I don't feel good. I mean
I'm not talking about myself, but in general
as a human being we don't feel good, depressed,
there is a high level of loneliness and depression
right now. So we believe that because we as a
human being are not connected to ourselves, we
have these problems of loneliness and depression.
Then on the second level we are not connected
to the communities around us, to our families,
friends, neighbours. countries so we are not
as a population are not connected to each other
and hence wars conflicts and so on and the third
level we're not connected to the nature around
us and we don't care too much about the climate
and we don't care enough about that and we are
not connected to the nature around us And that's
why we believe that there is also a climate crisis.
And if our mission is to invest in the product,
that will help to reduce this disconnect on one
of those levels. So that's why mental health
apps, it's like, for example, future of work
is like, yeah, now people are afraid that they
might lose the job. The job in general, the way
we work is changing so much. There is like a
new creator economy is becoming way bigger than
the manufacturing economy. Because of that people
also sometimes don't feel accomplished through
they're not They don't have enough interest in
their life in terms of their job and career and
so on So that's kind of a level. We also want
to invest and then ethical why I'm saying it
because the ethical use of AI Also impacts and
I and we level a lot and we don't know how the
AI will continue developing what the AGI will
look like and And we don't want to stop this
development, but we want to make sure that people
are prepared for that. So they will know how
to use these instruments when they will be commonly
used in the society. And we want to invest in
the product that will help people to be prepared
for that and to be able to judge for themselves
how they want to use AI. So the AI will not use
them. So we want to explore that area currently
and what kind of products can. We also venture
capital products in that. Very interesting. Dari,
if people want to reach out to you, how can they
do so? Yeah, LinkedIn would be the easiest way
to reach out. Yeah, my name is Daria. My email
is also open on LinkedIn. So it's possible to
kind of email me through LinkedIn or text me
on LinkedIn. Dangerous. That's very dangerous.
I'm the person who, yeah, it's sometimes gets
too much. Yeah, I think I've learned how to filter
and how to answer and yeah, I found my routine
to keep up with the incoming requests. Dari,
it's been an absolute pleasure having you here
on the podcast. Thank you so much for your time.
Yeah, thank you for having me. It was fun to
reflect also on my journey. Thank you for this
opportunity. Thank you. The podcast is also sponsored
by Notion .so. Notion is offering six months
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