One-person VC parties, known as solo general partners, have been growing in Europe in recent years — but few, as you might guess, are women.
Berlin-based Gloria Bäuerlein, a VC turned operator turned angel investor, is bucking that trend, having just raised her own fund of €21.5m — nearly twice the size she originally aimed for. Out of the 100 LPs Bäuerlein approached, 95 of them agreed to put money into the pot. Her investors are a notable bunch too, and include founders and operators from large scaleups such as Personio, Kry, Stripe, Coinbase and WhatsApp.
Bäuerlein worked as a principal at VC firm Index before taking senior operational roles at healthtech giant Kry and HR tech Back, when she also began angel investing. She plans to leverage her network to get into the best early-stage deals — and get other VCs and experienced operators in on them too.
“I want to keep this idea of, ‘she’s basically a super-angel’,” she says.
Bäuerlein’s model
So, how will the fund, which is called Puzzle Ventures, work?
At pre-seed, Bäuerlein is happy to price and lead rounds — “only if the founder wants it and if there are just other angels”, she says.
At seed, someone else will always lead the round. Then, there are two options: Bäuerlein commits early, helping to structure the round and give introductions to VCs, and will invest between €200k-500k. Or, a fund commits first and brings Bäuerlein in. In this case, she’d invest between €100k-250k.
I think founders want to work with people who have been in the trenches before
“I think founders want to work with people who have been in the trenches before. And a lot of VCs… have either never been an operator before, or because of their fund size, they can’t really spend a lot of time in the trenches with their portfolio companies,” she says.
“What I saw a lot as an operator is that there are so many occasions where I would have needed an angel investor that has set up marketing operations like HubSpot before and could tell me what the best practices are. So I either want to be that person who [founders] ask these questions to, or who can connect you with other operators.
“The idea is that with one ticket, you get access to the whole LP network, both on the operator side, as well as on the fund side.”
👉 Read: What do LPs want to see from first-time VC fund pitch decks?
Bäuerlein can, in theory, do five to six Series As as initial investments a year: but only if she knows the founders or if it’s a sector that she understands well.
She plans to spend two thirds of the fund on initial tickets, and a third on follow-on investments.
Collaborating with other investors makes the solo GP experience much more exciting for Bäuerlein.
“If you are investing for a very large fund, the way the fund math works means you have to optimise for ownership — you need to own 10% if not 15% of the company after the investment,” she explains.
“I don't have to think about that. My fund is small enough that if I pick right, I have access to the best entrepreneurs across Europe. One or two percent (ownership) is totally enough, so I can basically work with everyone.”
The cream of the crop
Bäuerlein is keen to back companies globally in B2B and B2B SaaS (B2B fintech and B2B marketplaces are among the things she’ll be looking at).
Other key criteria include:
- “Founder-market fit” — that is, “they have felt the pain of their customers, ideally because they have been in their shoes, or because they’ve done a lot of research and spoken to a lot of people.”
- Passion — which is usually evident from a pitch deck: “If it's 80% about the market, and only 20% about the product they're building, that’s typically a red flag for me.”
- Ambition — with her fund model, Bäuerlein has low ownership in companies, meaning that a €200m exit wouldn’t quite cut it for her. “I need at least €500m+, ideally a €1bn+, exit.”
- Speed of execution — Bäuerlein wants to see how founders’ thinking has evolved in the months and weeks between their meetings.“So you can definitely see whether they have spoken with five customers in the meantime, or whether they've spoken with 50.”
She also has a clear plan for how to win founders over and sign deals quickly.
Bäuerlein calls up VCs to do reference checks on founders before she meets them to eliminate potential red flags — and enable her to move quickly if she does want to invest.
She tends to schedule 45-minute calls with founders to allow for 10 or 15 minutes of chit chat to relax the founder and appear friendly. She says she also thinks in advance about what introductions she could make for founders to demonstrate her value from the get go.
Bureaucratic hurdles
Bäuerlein started fundraising in the second week of April last year, and managed to do the first close of the fund in August with about 60-70% of the capital committed.
Her (clearly pretty successful) strategy was to get an anchor investor — a family office who Bäuerlein preferred not to name — first and then build out the rest of the LP base with operators, before approaching institutional investors (the European Innovation Fund and KfW were not on the list, given their slow processes and risk-aversion toward solo GPs, says Bäuerlein).
Setting up the legal structure of the fund was more tricky — as was setting up a bank account. Many banks “don’t deal with small funds due to KYC and AML requirements,” says Bäuerlein. “That’s why [the collapse of] SVB in the US has probably larger implications now for the small funds than for the companies, because the companies can find alternatives with JP Morgan etc… but the funds don’t have any alternatives.”
It took Bäuerlein seven weeks to set up a call with a bank to eventually open up an account, which delayed the process of setting up the fund by four weeks.
“You have to have a bank account in order to set up the entities. And only when you have the entities, can you get regulated. And only when you're regulated, you can basically sign the documents with the LPs. So it's all dependent on each other,” she says.
The growth of solo GPs
Bäuerlein is confident that we'll see more female solo GPs in Europe, and she knows of a few women who are already raising. But she thinks that many women won’t choose to strike out alone; if you don’t have much experience in venture, launching your own fund can be “scary”, she says.
In terms of supporting female founders, Bäuerlein doesn’t believe in quotas. Her strategy is to “be as diverse as possible at the top of the funnel” — in other words, she tries to ensure that 15-20% of her investment prospects are women, which she says matches the amount of companies right now in Europe with mixed founding teams.
“Historically, about 23% of the founders of the companies that I've backed have at least one female cofounder," she says. "So it's not 50/50. But it's definitely above the average of the founding population.”
Update, May 30: Bäuerlein's fund has been renamed Puzzle Ventures, so we have updated this article to replace mentions of its old name, Beyond Capital.
