Sophia Bendz is one of Europe’s best-known operators turned VCs. Now a general partner at Berlin-based Cherry Ventures, she was formerly global director of marketing at Spotify — and one of its very first employees.
She’s also a prolific angel investor, and has personally backed 52 startups, including smart ring maker Oura, healthtech Manual and period tracker Clue.
While a partner at fellow Swede Niklas Zennström’s VC firm Atomico between 2018-2020, she helped set up its angel investing programme to encourage other women and operators from across Europe to get into backing young companies.
Nowadays, at Cherry, she invests in early-stage startups across the Nordics, and sits on the board of play-to-earn football game developer GOALS, fintech Juni, carbon removal startup Carbo Culture, and energy storage company Polarium.
She’s this month’s guest on Startup Europe — the Sifted Podcast, and during our 45-minute chat we discussed disinformation, diversity, her learnings from Spotify and what’s looking likely to be her most successful angel investment to date.
Here are some lightly edited highlights from the conversation, which you can listen to in full here.
What does early-stage investing look like at the moment? And how many pitchdecks do you see every month?
We still see a really good steady dealflow; we have a pretty full pipeline. Of course, AI is built into most cases you look at today. It feels like business as usual.
This is always one of my ‘I feel bad areas’ — I always have some many pitchdecks in my inbox. There are the ones that I need to look at because they match the fund investment strategy. Then you have a whole set of cases sent to you by people in the wider ecosystem — and many of them are off-strategy for me. And then you have the set of people that are somewhat in my network that are asking, ‘Hey can you please look at my pitchdeck and help me prep?’ So it’s a very broad spectrum.
At Cherry, we process around 3,000 per year — and we normally do 10 to 12 investments per year. So you say no to the majority of them, and you say yes to a few, and then you know you’re in for a partnership that lasts for a very long time. For me, as a very enthusiastic person, that’s the hardest part of my job; that I say no the majority of the time.
Do all companies need to have mapped out how AI will play a role in their business? Or is it okay to be a startup that says, ‘We’re not an AI company and I’m not just going to stick it in my pitch deck because it’s the buzzword of the moment?’
I think it’s very refreshing when people are that honest. I don’t think everyone needs to have AI as a core component — but I think the majority of companies are using off the shelf tools built with AI that will make their business more efficient.
All the companies I speak to — and especially all the ones that already have funding — have probably answered the question from their investors and their board: ‘How are you working with AI? What are the things that you need to be prepared for? How can you be disrupted? Do you need to hire up, etc? What is the strategy?’ Then the strategy can be that you’re not going to have AI as a core component, but you at least need to have a proper strategy around it.
What areas are you interested in investing in?
I have two kids, and I think a lot about how they live their lives and how being online affects them. That’s led me to look into the effect of social media, and how we go about life when so much of our time is spent online. What is disinformation and fake news doing to us? This year [more than 50%] of the world's population are going to vote; how is that going to pan out when we know how much disinformation there is out there?
I think disinformation is our generation’s biggest problem to tackle.
I think disinformation is our generation’s biggest problem to tackle — and I would love to see more companies coming up with solutions for how to solve it.
Then I’m also interested in climate tech and healthtech, especially proactive health; how can you help yourself to stay healthy, rather than treat yourself when you’re sick.
Cherry recently launched a coaching programme for entrepreneurs. Would you say it’s an especially hard time to be a founder at the moment?
I think it’s really tough. I don’t know about you — but just opening up the news, reading about multiple wars without any solution in sight, the elections being tampered with by troll factories, seeing Trump potentially gaining power again, seeing kids feeling very depressed because they’re spending too much time online. There’s so much heaviness in the news. I would love for more positive news to be featured — and we didn’t even mention the climate crisis!
And then it comes down to, what can I do in my day-to-day life that can contribute to a solution to this or help the situation to become better? That’s why I think we've seen so many mission-led founders, and I love the fact that we have seen this very big uptick in how many people are tackling real problems.
But then again, being responsible for a company raising money, I mean, it's not like the deal is done when you sign the term sheet; actually that's when you get the money and the journey starts. You have people that are expecting a salary every month and it comes down to you being able to run this company. So I understand that the pressure can be immense. Plus, I also think it's very hard to be the partner to a founder because you live and breathe your company as if it's your baby — and having the understanding at home is also important. So you can probably feel pressure both from the work collective of people, and then at home, so I get that it's super hard.
I think you need to have a few survival tactics, and also realise that it's a long run, you can't sprint a marathon, you need to take care of yourself, otherwise, you can't expect to perform. Maybe that's why some people in the startup industry are so interested in longevity, and health hacks, why we have the Oura rings and stuff, because in order to do all this work, we need to be in really good shape, both mentally and physically, and I think it requires a lot of discipline. There’s not that many hours in the day left after taking care of yourself and your health and your company.
If you recognise that a founder is struggling, how do you approach that?
I’ve seen so many investors being very harsh and bullish in board meetings. So I take pride in creating a safe environment and also bring it up myself. We need to put it on the agenda and talk about it as if it's not a weird thing. It probably would be weird if you're not exhausted at some point. I can encourage them to take time off, to work with a coach if they don't have one, almost saying, I think it's a ‘need to’, and also letting them debrief. Sometimes they just need someone who can listen and let them vent.
In board meetings, I normally talk about organisational health: Give me an update on how the team’s doing? And how are you doing? Who has an overload of work pressure now? How are you dealing with the stress level right now, because I can see from all of the things going on that this is a lot, for anyone?
Looking back to the Spotify days, what have you taken away from how that organisation was built?
One thing that Daniel [Ek] does really well is that he is super curious, and he takes advice, and asks for advice from more senior leaders. So it felt like he was always a very open minded person who always brought new ideas that we could try out. His openness and curiosity, and taking time to reflect, was inspiring. He didn't feel like someone who was just executing without thinking.
Then I think he communicated the vision clearly; he did so when you had chats with him, but also through all hands. And often he also took the time to write a long email explaining a strategy for an important project.
Daniel Ek's openness and curiosity, and taking time to reflect, was inspiring.
We implemented OKRs after a while, when we were quite a lot of people. I think that also helped everyone to know what to focus on. Hearing about a big mission — we want to democratise access to music — how does that come down to what I’m doing today in front of my computer?
Looking back, I think Spotify was fairly brave, because we always said ‘drive over perfect resume’. So in the beginning, there were no people with a proven track record; I was a fairly junior person, who had been working in communications for a year when I was given that job. And I loved that because it felt like we all came with a fresh perspective. If I had been the marketing director at Coca Cola for 15 years, I probably would have come to that job with a set of ideas of how to do it.
At least the first couple of years, we were so good at doing it our own way, walking our own path, rather than looking at what's been done before. And I love that we always got encouraged to do so — it felt like a very open culture where you were allowed to try things and learn, almost like a university culture where you try and test and you learn and you share experience and knowledge and you're incredibly curious.
While you were at Spotify you got into angel investing. What do you love about it?
I think it's the same thing that I love about investing in pre-seed and seed stage; it’s being part of a journey that someone is on, and when you share the excitement for what they're building, and you have that shared vision of what this will become, then you have the shared desire to solve all the problems in getting there. That is, to me, super exciting. I'm not at a startup anymore and I'm in a different place in life now — but there is something incredibly thrilling to be building something. And for me, being close to someone building is equally exciting.
What’s looking likely to be your most successful investment from your angel portfolio?
Right now, it looks like the Oura ring investment will be the most successful one.
At Atomico, you helped set up its angel programme, which was in part designed to bring new faces and new backgrounds into angel investing. What holds people back from getting into it?
People think that you need to know a certain amount of things to do it — but there's no education to take. It's just something you start doing. So I always try to demystify it a bit.
Of course, you should be diligent, and you should have your own thesis. It's not that you just throw money around. But you don't need to be a finance professor in order to do it. Actually, I think it's more about having a feel for what's happening in the market, having a feel for what founders are good, understanding how you communicate and tell your story in an attractive way? That’s going to be very important.
I would also suggest doing it with another set of angels, with complementary experiences and skillsets. So if I, for instance, talk to my former developer friends at Spotify, when they evaluate a company, they look at it with their engineer glasses, and I look at it from a communication and marketing perspective. And the combination is super strong.
A lot of people also think that all of the investments need to be a great success. But that’s not the business model; you're going to invest in a couple of companies that are not going to turn out to be great companies, but you learn from every investment. It's not something to be ashamed of.
Talking about the diversity of investors, when you look at the cap tables of companies you’ve invested in, what percentage of their investors or shareholders are women?
It’s not that often that I see many female names. Even though you see female cofounders, many times they have less ownership, because they might have been brought on later on.
I would love to see more female investors on cap tables too. I think, as a founder, you should try and get as diverse a group of people on your cap table as possible, because those people can help you throughout the journey, and they will be learning, and help you learn and help you get access. So if it's only one set of investors, you're missing out on a lot of things.
At the later stage, do you think it would be good if more of the big public funds set mandates for the investors they backed, that a certain amount has to go to investors with women on the team, or people from diverse backgrounds? Or are you against that sort of quota system?
I think it's actually good. And I think it always starts at the top. So when the big pension funds put pressure on funds and general partners to be thinking about this more, that helps us put it on the agenda. And then we think about how we can push our founders more.
I remember having a workshop with one of the Swedish pension funds, and they were so determined to hear what are the strategies that you're thinking of implementing in order to fix the problem? And I think that helps. They are in the end, the ones that have a lot of power.
I think it's like International Women's Day; it's wonderful that we have it but I'm so sad that it's needed. It’s the same thing with teams; we all know that diverse teams are performing much better. And if you're someone who is responsible for managing someone's money, then your job is to make sure that that money is managed in the best possible way — and so investing in teams that are not diverse is not a good thing to do.
I know it's very hard, because the tech industry is very heavily male dominated, but our job is to encourage them, inspire them, coach them to be better at implementing and identifying their diversity strategy, and to put it on their radar early. It's much easier to help a company when there are two or three or five employees than if there are 200 employees. Because it's very hard to attract minorities if there's none.
Do you ever get disheartened by how slowly all of this is changing?
I find it disheartening and also a bit exhausting to be honest. It shouldn't be the case that the few women that made it there are the ones driving change, it should come from all of us.
I remember being on a panel with my dear friend Pär-Jörgen Pärson at Northzone, and someone was asking me, ‘Why are there so few women in VC?’ And I was like, ‘You should ask him. He's been in VC for 20 years?’ I find it interesting that we are also tasked to solve the problem when we are very busy just getting ourselves here.
I find it incredibly disheartening to see the numbers not improving more. I feel like we are running on one engine as a society.
I feel like we are running on one engine as a society.
When founders come into pitch, if it is an all-male team we normally always ask: ‘What is your strategy for diversity?’ And it's not only me asking that question, it's also my male colleagues.
When we ask that question, if someone is like, ‘Yeah, it's so hard to find female engineers, and we have worked on it, but it doesn't get better’, then I feel like, ‘Oh, that's not the most inspiring answer’. Or if people say, ‘Oh, but women don't want this job’ then I also get a red flag. But [it’s a good sign] when people say, ‘Yeah, that's a very good point, we have been working with it in this way, we have sought advice from this person, we're now implementing this, we're doing this, etc’. We need to see the awareness, and at least a plan for how to tackle it.
What are some other common mistakes founders still make when they’re pitching?
I think it's very easy as a founder to be in the details. But I think it's important when you pitch to lift up your gaze, and think about how the people in front of you now are coming to this with a fresh pair of eyes and haven't heard you talking about it many times.
Talk about why this opportunity is incredibly exciting, and how big it can get. Talk about the solution or the tech that you built. And talk about why the team is the right team to take this company from idea to IPO. And then show excitement — because if you're not excited as a founder, how can I get excited? If you're a bit closed down, then it's hard for me to see that you can excite people. You want someone who can get the world's top talent to work with you on this problem for maybe 10 years; to go and work many hours per day and walk that extra mile all the time.
