17/02/2022 15:24
In 2015, Andy Davis set up 10x10, a community for the UK’s early-stage Black founders and Black VCs. In 2020, 10x10 released the Black Report, in partnership with Google for Startups. It was the first qualitative report on Black startup founders in the UK and as a result, the 10×10 fund was launched to invest in exceptional Black talent.
Andy’s path into venture capital hasn’t been a traditional one. Despite attending university, his focus on working at startups when he was and 18 and 19 took priority.
“I started a course at University College London in 2010 and they were super supportive, even when I wasn’t taking classes. They provided resources for our startup to thrive. Ultimately, they were paying it forward, which we say a lot in the ecosystem.
“From the age of 17 and 18, I just wanted to solve the problems that were in front of me, so I started a bunch of startups. I very quickly realised that you have to solve ‘painkillers’ and not ‘vitamins’, so actual problems. I took a lot of lessons from that period. But mostly, it exposed me to the world of external capital. I continued with different startups over the years, each one getting to a later stage and there were a lot of lessons learned.
“Where I messed up was internally: the team and the culture. People are still people. Things can go really well and the customers can love the products, but if the company isn’t doing well internally or culturally, then things will break. And I saw that happen a couple of times.”
Breaking into venture capital
Andy created a healthcare tool, which grew internationally and attracted capital from a corporate venture fund, angel investors and syndicates. It was at this point that Andy transitioned into the world of investing, a transition Andy described as natural.
“I ended up setting up the UK arm of Backstage Capital, a US venture fund. The transition wasn’t difficult at all because I’d spent so much of my time with founders and helping them with fundraising, product development, hiring, sales, and commercials. So, I’d been playing the role of an extended founder and investor. The year prior to breaking into venture, I began sending my investors deals and they trusted my opinion. I never sent anyone anything that would be a waste of time. It doesn’t feel any different because my conviction’s the same. I really believe in the founders I support.”
It’s been four years since Andy started his investment career in which time he’s also become an angel investor with Atomico and has done a couple of personal angel investments too.
“Founders appreciate that I can talk from a few sides of the table and represent a different perspective. I think this is still quite rare in the ecosystem, but we are seeing an increase of founders, who exit their companies in Europe and start putting money back into this ecosystem as investors themselves.”
Building a support network
Andy explained that for a startup, the product needs to be 10 times better than the competition. And as a Black founder, you need to be 10 times better than that, hence the birth of 10x10.
“In 2015, there was nothing in the ecosystem like it. It started as a way for us to support each other and it somewhat grew organically. I’ve never had any plans per se for it. I was always asked: ‘What’s the vision? What’s the plan?’ I said the greatest products in the world grow organically because they have value add. So every day, I focused on delivering value for founders at every point of their business: when they first got an idea to their first set of customers, to hiring team members, finding co-founders, leading on the legal side and ordering up to exit. We’ve had a few founders exit too.
“We’ve had a few offshoots like 10X10 VC, a group of all the Black VCs in the UK: a place to be together and support one another. We now know that we have to support Black people who want to get into venture and Black founders who want to get funding.
“We help them prepare for interviews and other career advice to give them the best chance possible to secure that role. On the funding side, we help them raise funds at seed level, especially going over their decks and getting their narrative correct.
“We do pitch practice sessions with them. This year we’re seeing some great results with more Black founders getting funded than ever before, especially Black female founders, which I’m super proud of. It’s been a phenomenal year for female founders generally. And they’ll keep flying and growing off the back of the year as well.”
This time has taught Andy lessons that have attributed to his growth too.
“When you’re in the wrong, just listen. And be very patient because it’s such a long game in venture. And you have to be obsessed. People in VC are very passionate. I think the best people are obsessed with this world and they let it become their world. There’s nothing wrong with that. Of course, it’s important to have a work-life balance, but if you love it, it’s okay to say you love it.”
Learning the game
A big part of getting more people into venture is education, another area Andy is keen to help others with.
“There’s a lot of resources out there and great programs, such as the Newton Venture Program. There’s no reason to not know things. Be educated. Be informed. I have a list of resources for people who want to get into VC, such as books, podcasts, news and events. We also do lunch on Hangout for people to come and ask any questions. In those spaces, don’t be afraid to ask questions. That’s really important.
“On Friday, someone joined one of my lunchtime Hangouts and said they’d had an interview at a venture fund and wasn’t sure where to go. So, I called them before their interview. They wanted to know how to source deals and what makes me say no. Rightfully, they wanted to know more about the psychology behind it. I wish more people did that. Typically, I think people ask a lot about sourcing deals and how to support founders, which are both solid things to care about.”
Diversity in VC
Andy believes that venture is missing a massive opportunity because mostly only diverse investors are investing in diverse founders.
“And that’s why Newton exists, increasing the diversity of the investor base. Thus, the companies would be more diverse and will have a more diverse workforce. I get asked all the time: ‘What do you think of the funds that don’t invest in Black founders?’ But those funds eventually die because they’re not providing their investors with the right opportunities. They’re missing big opportunities in the market! I think the problems exist because the whole ecosystem’s quite archaic.
“I used to say I don’t care about diversity and inclusion (D&I) and people were shocked. I am D&I! We go through this work every day! It isn’t us who need the changes per se, but everyone’s got room to improve.
“I realised different generations are accepting of different ways of communication. For example, language is so important. If you walk into a room and say: ‘Hey guys’ and the women in the room don’t feel acknowledged, then you’ve excluded them.”
Andy takes the commitment to inclusion seriously. Despite kindly being offered a free office space they had to turn it down as it was inaccessible. Instead they built up their own office including a parents room and prayer room. “Ultimately, it’s just how to be the best human beings – that’s what D&I is.”
Despite this great work, Andy admits that there’s still a lot to do.
“I make mistakes every single day. When we did the Black Report report, half of the founders involved were women. But where are the non-binary folk? We’re never going to be perfect, but we have to try.
“Interestingly, I get asked a lot if 10×10 is just for Black founders. What about other diverse founders? And I have to reply that it’s okay for them to have their spaces – it’s okay to build space for Black founders only.
“Ultimately, what I’ve learned is it’s okay to do something completely and not get distracted by feeling like you’re missing something else. Just stay focused because you can’t do everything at once! And once we’ve achieved this, we can move on to the next thing.”
Being a diverse person, Andy feels this holds him accountable as he’s always looking through that lens. For other groups, Andy believes a constant desire to learn and be better is needed to hold themselves accountable.
“I make mistakes all the time, but own up to them. What everyone hates is someone who just doesn’t care. Look at the Blackout Tuesday sessions [at LocalGlobe]. It’s so interesting to me because the best bit about it is the consistency. The fact that they’re still doing it is important. They’re holding themselves accountable, no matter how uncomfortable it is. Even if you come to the second session, the third session and the results aren’t there yet, the results will come because they’re doing the work. It’s about being patient. If you just lean into the fear, you can accomplish so much because you understand your comfort zone.
“I talk about sacrifice all the time. If you’re a VC and see an opportunity that would be great for a team member: sacrifice that member of your team. Recommend them for the opportunity. Go call that fund and do the work to help that person progress in their career. Sacrifice the talent in your fund. And sacrifice your own seat sometimes. With 10×10, it can’t all be about me. There are so many people here who are greatly talented, passionate and hardworking. They want to contribute and they should get the recognition that they deserve for that. A little more sacrifice has to come into play.
“I just focus on adding value for Black founders. The rest will work itself out. And I remember to be patient, it’s worth it in the end.”
See how Newton Venture Program is working on tackling diversity and encouraging allyship in the venture capital ecosystem.