#awinewith Anne-Marie Birkill
MEET Anne-Marie, Co-founder, Venture Partner and Director of OneVentures
You can find them here:
Transcript
Danielle Lewis (00:05):
Anne Marie, thank you. Welcome. I'm so excited to have you on Spark TV today.
Anne Marie Birkill (00:11):
Thank you. Thanks for having me.
Danielle Lewis (00:13):
As we said before we hit record, it is been far too long, so I am very excited to catch up with you and all the amazing things you've been up to, but let's kick things off just by telling everyone who you are and what you do.
Anne Marie Birkill (00:27):
Okay. So hi everyone. I'm Anne-Marie Behill. I'm one of the founders of One Ventures, a venture capital firm that invest in disruptive technologies across healthcare and IT opportunities that have global impact and the ability to transform markets. So we are now 14 years young. We launched our first fund in 2010. It's a very small $40 million fund, and we're creeping up very slowly on having a billion dollars in funds under management.
Danielle Lewis (01:00):
Wow, that's impressive. So I'm always so fascinated because I talk to so many women in business on the, I guess what you would think is traditional business side. So have a product selling something to a customer, growing that grow a team, but a venture capital firm is a business. There's a whole nother side. I guess when we talk to women in business, we're always just thinking about getting funding, not about actually starting a company that provides the funding. So before we get into that, how did you actually get there? What was the career history before starting One Ventures?
Anne Marie Birkill (01:41):
Well, I had a science degree, so I've always been curious about what makes things work, especially in the sort of natural sciences area, and a curiosity about how to take science and technology from an experiment or the lab bench or the backyard garage and turn the outcomes of those efforts into products and services. So while I was never actually a scientist working at the lab bench, I went quickly into working in commerce in the field of actually plant biotechnology. So developing new cultivars of food foliage, forestry plants and propagating those and selling them internationally mostly into the US and Europe as well as Australia. And I took, what I was really doing there was transforming science in products, and that was really what was the foundation of a career in technology commercialization. So since that early part of my career, which spent about 15 years, I've worked at Quest at the University of Queensland where I was able to take the skills that I'd learned across a much broader portfolio of work. So I learned to work with medical technologies, for example, and mineral technologies and a whole range of different things, but the process is still the same. I was CEO of iLab incubator for a while. I had my own consulting business. And then in about 2009 I met my co-founder, Dr. Michelle Deca, and subsequently Dr. Paul Kelly, our third co-founder, and together we launched that first fund. So that was really the genesis of One Ventures and a little snapshot of my journey to get there.
Danielle Lewis (03:24):
I love it. So how did you go about raising 40 million to launch your first fund? I often talk to women who are trying to raise a couple of hundred pay or then maybe a couple of million in their series A, but what's it like going out and saying, Hey, give us $40 million? What's that process like?
Anne Marie Birkill (03:46):
Well, I think, let me just sort of set the scene a little bit because remember 2010 is kind of right off the back of the GFC, so really frightening big things that happened in the financial markets. So it was a particularly difficult time to do this work, but like many venture capital firms of our vintage, we got our start with a license from the government innovation investment fund scheme and government gets a lot of bad reps, but I'm going to give them a big shout out because we're not for the foresight of the federal government in seeding the venture capital ecosystem back in those days with these schemes. And we probably wouldn't have the vibrant venture capital scene that we had now. So we had acquired a license on the second attempt I might add. It wasn't an easy process for $20 million worth of federal government funding on the basis that we matched it with 20 million worth of private investment.
(04:44):
And prior to the GFC, we actually had commitments from some significant size institutions and we actually thought we were going to raise a much bigger fund at that stage. But the GFC happened, those commitments fell away, and we just started a process of door knocking on the doors of high net worth investments, investors and family offices. Now, Michelle and Paul, unlike me, were serial entrepreneurs. So they had actually been in the situation where they'd established firms and realized gains for investors. So we started with that sort of base of investors that knew them well and knew that they were good at transforming a dollar into 10, if you like. And then there were subsequent introductions into their networks and a whole lot of shoe leather just managing to sort of scrape together that 20 million in matching funding. So even though we had to in today's vernacular pivot from our original capital raising strategy, it's become something that's stuck with us. So even now, we don't have, other than the government in a couple of our funds, any institutional funding, our investor base is all high net worth investors and family offices, a very loyal investor base and an investor base that more than just capital, because as you can imagine, many of those people are the captains of industry in Australia. So often we're able to leverage their networks or their expertise to help us make our portfolio companies successful.
Danielle Lewis (06:13):
I love it. And I think it's really interesting because I feel like VCs do get a bit of a bad rap. So when we're in the startup land, especially in this women in business land that we're in at the moment, we just sort of tend to regurgitate the stats and don't really think about VCs as a business in and of themselves or the founders or the effort that you go to actually raise capital. So it gives me a little bit of life knowing that you had to pivot knowing that you had to doorknob knowing that you've basically gone through everything that a woman trying to raise a million dollars for her business has gone through.
Anne Marie Birkill (06:53):
You're absolutely right, and I think it's not only were we one of the early venture capital firms, we're also, to my knowledge still one of the only venture capital firms to be founded with two out of three female partners. So we were not only raising under a difficult time in a nascent market, but also going against the sort of mold of what people thought VC should look like, which was typically older white men out of the finance sector, if I can put it that way. And so Paul's a doctor, Michelle's a scientist like me when none of us are, we've got an accounting degree between us or a finance degree or a law degree, which was the sort of typical way that venture capital firms sort of spun out at that stage. So we faced a lot of barriers because we were different, but I think also that difference allowed us to point to what's become an important part of our DNA, which is that we really believe that to be able to get the best outcomes from our portfolio, we have to be able to include our operational experience or apply our operational experience to try and help 'em be successful.
(08:04):
So we are very hands-on investors. The things that we've done well and the lessons that we've learned, we apply all the time in our portfolio, and that's been tremendously important in terms of getting the best out of those in terms of performance.
Danielle Lewis (08:21):
And it is really interesting as well. I love that you mentioned that the portfolio of investors that you have are also experts, captains of industry, people that can bring more than money to the portfolio. I think that sometimes when we as business owners raise capital, it is, look, sometimes it's under duress, perhaps it's not always the right time for our business. So a lot of times we can be, I guess, err on the side of, I don't care, we just need to get funds in the door. So I love to, what is your perspective on the idea of smart money and bringing that into a capital raise?
Anne Marie Birkill (09:04):
Well, I think, look, the first thing that I would say is if I could advise any entrepreneur on one key thing, it's raise capital under JU raise because as you say, you are don't have to accept terms that are not necessarily going to be beneficial to your business. So try and have a good capitalization plan from the get go and take capital when it's available, not when you have to have it, because as you say, you'll accept it under duress. But I think it's really important that as much as we as investors want to get to know our entrepreneurs and the executive leadership team and the companies that we're interested in investing with, it's really important for entrepreneurs, founders, executives to get to know the individuals in the firm, the investment firm that they're working with. Because I mean, it really is, it's like a marriage.
(09:59):
I mean, if I give you an example, one of our early investments now first fund was in 2012, and that's a medical device company called Bax out of the University of Queensland. We're still the main investor in that company all these years. Here we are in 2024, we still sit on the board, we still support that company. We invest in every round. So I think our relationship with that firm is about as long as the longest employee. So it can be a very long relationship. You want to have an investor that's going to be there to celebrate the good things and also to help you lift you up out of the inevitable bad things that happen in a firm and be truly a partner, not merely a financial partner. I think it's critically important now. I mean, there is a place for perhaps a passive investment partner in the life cycle of a company, but typically in the early days, I think it needs to be more than just here's some money, come back when you've turned that into that dollar into three or even better, 10.
Danielle Lewis (11:09):
And it is interesting because I feel like especially first time startup or business owners, there is just so much that we don't know so much that even bringing capital into the business that now means we have shareholders, we have shareholder meetings, we have a board, we have board meetings. As a first time startup founder, there's a lot that goes along with that process, operational staff that we just dunno about. So having people come in that can provide a level of guidance and I love support when the inevitable hard days happen is a great idea.
Anne Marie Birkill (11:51):
It is. And I think one of the things that can seem like a bit of a pain at the time is accountability and reporting.
(12:00):
In the early days of your venture, you've got so much happening, you just described it really well then that being asked to provide the monthly or quarterly or whatever report or write a board pack or whatever can just seem like an unnecessary overhead, if I can put it that way. But I think it's also a good training ground for the future because if your firm grows, eventually you're going to be accountable to a board of some significance. And it's important to sort of learn those skills, how to hone them, how to, as one of our favorite founders says, allow good news to travel at the speed of sound, but bad news to travel at the speed of light and accept those consequences and the advice and the support that comes along with all of those outcomes on the spectrum from excellent to not So great.
Danielle Lewis (12:54):
I know, and it is interesting though. I think that perhaps the negative gets the limelight a little bit too much, but if you do have people on your board or in your shareholder community that do have this breadth of experience, providing that reporting, providing that insight, providing those board packs is a real opportunity to have somebody take a look at what's going on in your business that actually wants the best outcome.
Anne Marie Birkill (13:21):
Absolutely, absolutely. And look, I think it's probably universally true to say that most sophisticated professional investors understand that occasionally an investment will go wrong
(13:36):
And companies can fail, be wound up, however you want to put it, under circumstances where everybody knows that the entrepreneur has done the best they could, that for whatever reason, the market competition, whatever, not everything works out. But if there's been transparency, openness, good communication and clarity around the efforts that have been made to recover the situation, et cetera, then even a kind of negative investment experience doesn't leave a bad taste in either's mouth. But if there's a situation where perhaps the founder entrepreneur is keeping their cards close to their chest, they're very defensive, they don't share the efforts that they're taking to try and recover the situation, then it can become quite a poisonous relationship. So I'm trying to portray a picture that we're all in it together is a lot better than being defensive and guarded with
Danielle Lewis (14:40):
Information. Absolutely. And I think that once a board member said to me, and it was great advice, just get news out on the table as quickly as possible. And I think that there is a tendency to, we want to just put our best foot forward. We want to have it all figured out. We want to be the superstars, we want everything to be going swimmingly. But I think the advantage in being open and honest and transparent with whatever the situation is, is those people around you do have your best interest at heart and they want their money to succeed. So of course they're going to do as much as they can to support you and give ideas and strategies. So I think sometimes it's just we need to get out of the idea that we need to have everything figured out. That's the reason why we have a board or have shareholders around us to support us.
Anne Marie Birkill (15:35):
You're a hundred percent right, Danielle. And the other thing that I would say is that it might feel like this has never happened to anybody else, but
Danielle Lewis (15:42):
Chances are
Anne Marie Birkill (15:43):
Whatever the challenge is, it has. And if you think about One ventures, I mean, look, I've kind of lost count, but our investment team is 15 or 18 people and people that have had long careers, people who have had shorter careers, international careers across a whole range of different verticals in the market as entrepreneurs, as senior executives, as investors. So if you have a good investment partner, what you'll typically find is you may have a primary contact, but in firms like One Ventures, if we have a challenge with one of our portfolio companies, we'll share that with our team and we'll bring the collective wisdom to bear to help resolve that challenge. I've seen it happen time and time again where I certainly don't know everything, but if I look into the Brains trust at One Ventures, someone will probably have been through this before. If they haven't, they'll know somebody else that they'll introduce me to. And together we can try and bring all of that experience to bear to try and facilitate a good outcome.
Danielle Lewis (16:51):
I love that. I think it's amazing. So talk to me about the landscape. So do you think that, and this is probably personal outside looking in, do you think that the capital raising landscape has changed over the last decade? I feel like a decade plus ago it was very much high growth users, no profit show traction, spend all of your money, dah, dah, dah, dah, dah. And then most recently where I've had conversations with founders, it's been very much need to show traction, need to be profitable, X, y, Z. Do you think the landscape has changed and do you think there's something that VCs are looking for in a business today?
Anne Marie Birkill (17:33):
Look, I absolutely think it's changed. And I think it's changed just in the last few years from, if you want to characterize it as pre pandemic growth at any cost was really the mandate. So take a lot of money, grow really fast, we'll fix profitability another day
(17:52):
To you may be investing in growth and we want to see good growth metrics, but we also want to see a path to profit. So I think definitely that has changed in the last sort of few years. I also think the investment landscape in terms of product availability has changed. So if I just even think about our sort of 14 years at One Ventures, when we started, there was very little sort of seed stage funding. So that's why we started as an early stage investment fund. You fast forward four years to when we launched our second fund and there was very little growth, and then a couple of years later, Australia had hardly heard of venture credit or venture debt. So we launched a venture credit fund. This is really just an example of how there's no sort of one size fits all in the investment landscape anymore.
(18:51):
So if you think about us, we have a growth product, a healthcare product, a venture credit product, and other firms similarly have a diversity of offerings. So I think tying this back to your initial question, there are different products that suit different stages and different types of companies. So if you are looking for a mix of later stage equity and perhaps a little bit of venture credit, which is non-dilutive, you're probably going to be a firm that can demonstrate a pathway to profit sooner rather than later, or some way of generating free cash to be able to repay that loan. If you're a high growth, then you're looking for a different sort of an investment product. So I think that diversity is really exciting for the entrepreneurial ecosystem and it also is exciting for investors to have access to a range of different products in the market.
Danielle Lewis (19:44):
Yeah, absolutely. And it probably just, I guess raises a good point that there are options now. I feel like perhaps some time ago it was just that raise at all costs, like very singular model, whereas now there are so many financing options. You mentioned venture credit, obviously we've been talking about capital raising equity, there's also crowdfunding now and crowd equity and all of that kind of stuff. So it is a really interesting point to really think about what your business is aiming to achieve, where you are on that path to profitability and what type of financing would actually support your growth.
Anne Marie Birkill (20:25):
Yeah, you're right. And I think one of the things that I always like to say in these conversations, because I think it's really important, is that actually venture capital is only really suitable for a tiny proportion of businesses. And I think too often it's held up as the sort of holy grail, the ultimate success. I got my company backed by venture capital, but realistically it's really for a small slice of businesses that are high growth with the potential to turn a dollar into 10 in a sort of relatively short period of time. And there's a whole cohort of excellent businesses for which venture capital is not suitable, where other forms of finance, including one of the things that we haven't talked about is grant funding, incubators, accelerators are actually far more suitable for the sort of style of business.
Danielle Lewis (21:18):
And you do raise a really good point around the headline. I got backed by the venture capital firm, I raised millions of dollars. That's probably a gripe I've had with the startup industry is what is heroed? What is romanticized? And I certainly on my business journey, scrunch not spark felt like that was what you did. You went out and raised capital, you had billions of employees, you got the big fancy office, you did all the things. And it was a bit of a covid was a real rude shock to us when the industry did change and went, no, that's not how we play and do business anymore. I think that it's really important not as a startup founder, not to get lost in the headlines and really think about the business you're trying to grow and what that end game looks like.
Anne Marie Birkill (22:13):
You're right, and if you think about any diversified business, whether it's, I don't know, a supermarket or sort of a multi-product technology company, often there's a bread and butter offering. And I think if you sort of think about the business ecosystem in the same way the great massive value is created in those companies that I might call bread and butter companies. They grow well, they're profitable, they employ a lot of people. They've got diversified client bases or diversified products. So they've got stability and they're really the heroes of the business ecosystem, if you like, even though as you say, they actually get no press. We're a nation of small and micro businesses Australia, and yet all the financial papers talk about are sort of massive companies. And I think we really need to give as much bandwidth to those nice little earners that are generating stable jobs and stable returns for their shareholders.
Danielle Lewis (23:21):
I know I just want a headline that says X, Y, Z company is profitable, something boring. So super boring, but it is an interesting point. Okay, so if anyone listening is perhaps a startup who is right for whether it be angel investors or VC funding and they're going down that path. Now our audience is specifically female founders. Would you have any advice for somebody that is embarking on their first round of capital raising?
Anne Marie Birkill (23:57):
Look, I think the first thing to do is to make sure that you sort of meet the mandate of that part of the market. So I would say find someone like me and please don't flood me with a million requests for meetings. Leave Annmarie alone. No, don't. Look, I have an absolute soft spot for any female entrepreneur. So I mean, I don't mind if I get the odd request for a meeting out of the blue, but find someone that's in the industry who can give you an honest appraisal of your business and what the best sort of source of funding is. Because to be honest, in many decades of my career, I've seen a lot of people and a lot of women beat the door of Angel and VC funding when the likelihood of them being successful in achieving it is very low. Not because they're women, but because their businesses are more kind of a lifestyle business, a business that would be there to grow with bootstrapping or through some sort of crowdfunding mechanism or I know that actually there's a couple of grants over there that could set them up for success.
(25:05):
So I think it's really important to just make sure in the first instance that your business is a good fit for that funding instrument. And if it is, then spend a lot of time getting the story, understanding what the end point is, because as you rightly identified at the beginning, a venture capital firm is a business, and our business is to take a dollar from our investors and give them an above market return on that investment. So we need to understand how we are going to be able to exit those opportunities, what the precedents are, what we can hope for in terms of an outcome. And the more that you know about that, the more that tells us about the fact that you are aligned in that journey. So that's just one example of the kinds of things that need to be right in the pitch. And I think as many people as you can talk to in the B before you're actually there pitching for your life to get that story the better. And this is actually where those really good incubator and accelerator programs really come into their own, because typically they're surrounded by a whole lot of fabulous mentors and volunteers and not to mention the people that run them that can give you that advice.
Danielle Lewis (26:18):
Yeah, I think that is so spot on. I remember I didn't do that, I just went into all of the pictures and then realized, oh, okay, everyone's asking me the same set of questions now I'll prepare for those. But then it was kind of a bit too late because I'd gone in just doing what I thought was the right thing to do, then starting to understand the process and then going back and refining. But I kind of then didn't have that. I wasn't spot on with my things in those opportunities. So I love that idea of doing that research first and actually understanding where you're at as a business, what people are looking for, whether you're on the same pathway in terms of that exit scenario. Because I dunno if people always think about an exit, do they, I think sometimes we start these businesses thinking they're going to be our business for life. They become our baby, and you are right, A VC firm is a business, and there will be an exit of some description if you're going to fit that date. And that looks like a lot of different ways for different businesses. But it is really something to think about as a business owner is what is that end game.
Anne Marie Birkill (27:28):
You're absolutely right. And various VCs, various investors will say, look, don't worry about the exit, grow a good business and the exit will follow. And to a degree that's true. But if I just use one example to illustrate my point, we invested in a business in women's health six odd years ago, and at that point in time, the women's health market was pretty early and there weren't a lot of good examples of exits. So you had unfortunately limited investment outside of areas like fertility and continence, and therefore you had correlated relatively few examples of successful businesses that had exited, which made it difficult to understand what an endpoint would look like for those businesses. But over the course of the years since we invested, actually, that market has come ahead and we can now point to exemplars and we can point to multiple acquirers in the healthcare sector that are interested in women's health, interested in acquiring products in that sector. And it enables you to tell a much better story about what the outcome might be for all shareholders, including the investors.
Danielle Lewis (28:51):
Yeah, really interesting. I think that when you're a trailblazer, it can be a little bit difficult, but those things, markets do tend to open up. You'll be the trailblazer at one point, but as soon as there's an example of a great business, the other businesses will follow suit. So super interesting. I love it. And Marie, thank you so much for your time. I always love to end these podcasts with one last piece of advice. So reflecting on your time in business, what would be a piece of advice that you would give other women on their business journey?
Anne Marie Birkill (29:29):
So I had about 10 things on the list. How long do we, you can do a few. You can do a few. No, I'm going to do one, but I'm going to say I turned 60 this year, so I'm feeling philosophical. Okay. And I would say the piece of advice I would give to anybody is try to identify what your superpower is and really work to hone that superpower. And it will be very different for different people. So for some people it might be a brilliant technical skill, like I am awesome numerically, and I do great spreadsheet modeling. For example. Some people might be really tenacious and it might be being excellent at research or people like you. I think one of your superpowers is that you can sell, and that's for example, a skill that someone like me doesn't have. So it's a really brilliant skill, but equally, it can be a soft skill, like being the person that lifts everyone in the room, being a great leader, being a great cheerleader for other people. It doesn't have to be something technical, but everybody's got something. And I think if you can identify it early, really work on it, make it part of your brand, then you'll be successful as an individual. You'd probably be satisfied as a person, and hopefully it'll help your business be more successful.
Danielle Lewis (31:02):
Oh, I love it. I couldn't agree more. If all I did was talk to people all day every day and just build relationships and sell, sell, sell, and there was no other thoughts to the business, that would be fabulous. I would love that. No, that is great advice. And I think I just love that idea that when you do love what you do and you are great at it, it makes the business of being in business a little bit more joyous as well, which never goes astray on the hard days.
Anne Marie Birkill (31:32):
Absolutely. And if you're not doing something that you love doing, then why are you doing it? To be honest, pick
Danielle Lewis (31:37):
Something else. Yes,
Anne Marie Birkill (31:38):
Correct. Correct.
Danielle Lewis (31:40):
Incredible. Thank you, Anne-Marie, it's been an absolute pleasure and so many amazing nuggets of wisdom, so thank you so much for your time.
Anne Marie Birkill (31:49):
No worries. Lovely to chat to you, Danielle.
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