I sat down with Haakon Overli, co-founder of Dawn Capital at one of the Oslo Innovation Week main events, Norwegian Investment Forum, and talked about their background, portfolio and the reason why they are especially active in the Nordics.
J: Could you tell me little bit about how you started Dawn Capital? And why does Dawn Capital exist today?
H: We started by a microfund with Norman Fiore and myself back in 2006. And what we saw was that there weren’t any US type of funds operating in Europe writing relatively small checks. There were big funds that had been successful from the last cycle, particularly one named Index, and they were investing big amounts. And then you had small funds or no funds because they had been unsuccessful and could not raise more money.
So there was a gap which we saw, investing about 5MUSD as a first check. But that being a big commitment, it allows us to be closer to the founder because we do not have a lot of money so we always really value the equity. So we thought there was room for ex-business builders like Norman and I, to have a fund to invest in that kind of bracket.
J: How many funds you have and what sizes are they?
H: We manage about 250M USD in two funds. We closed the last one 2013, so we’re investing out of that for a few years more.
J: Are you setting up a new fund?
H: No, not yet.
J: Who are your LP’s (Limited Partners)?
H: We have lovely LP’s. European Investment Fund, British Business Bank, and then we got the usual family offices and other institutions. I’d like to mention that EIF and BBB have been extremely good for us and I suggest that other people go to them too.
J: Why do you think your LP’s chose you as a partner?
H: We’re very good at picking companies. VC is about two things; picking the right companies and doing the right things in those companies. And we are good at both.
J: Tell us about your investments. What type of rounds do you participate in?
H: We’re A -round investor. And occasionally we do B-rounds and even C-rounds, but we are really A -round investor. Our minimum check size is 100k in a syndicate, and as the maximum we can do up to 20M.
J: Have you done 20M investment to some company? Who?
H: Yes we have done, but I can’t tell you which company it was.
J: Do you have some geographical focus? Or limitations set by LP’s?
HO: It’s Europe, but not by any limitation. That’s where we are and we think. VC is a local industry, so if you are an European founder, you should have European money. What our “thing” is, is that we back extremely strong European founders, who want to expand globally. And then we help to find the right investors from US when the time is ready. We’ve helped about ten of our portfolio companies to US.
J: How many companies from the Nordics is in your portfolio?
H: We have eight at the moment.
J: That’s quite a heavy focus on the Nordics?
J: Could you tell us something about the way how you work?
H: At Dawn, everybody works on every deal. Everyone gives input to every deal. And also it means that if you get money from Dawn, you get everybody, the full support.
J: Looking at your portfolio, there are some interesting names. Could you name a few of those which you think will be the next big things? I know you want to pick them all, but which ones tickles you the most today?
H: Ohh… It’s like picking your favorite child!! iZettle is very exciting and Gelato Group is a great business tackling a huge market. And Sticky, which is real heavy tech. Automile we’re launching in the US, and Leaddesk who are dominating the Nordics.
J: In general, what excites you in the near future?
H: We are very structured on how we look at things. We get continuously excited about software. It can do so many things. Fintech. Any software that can increase productivity is what we look for.
J: What is the one single biggest mistake entrepreneurs do when pitching to you?
H: They don’t articulate what’s hard about what they are doing. Why is this hard, what did you have to do, what was the challenges, what was the insight.
J: And what’s your advice for them to correct that?
H: Think extremely hard what problem you are solving. And is the market big enough.
J: What’s the best way to approach you for an investment?
H: Get someone we know to introduce you. You can of course email us and we still read every email, but that’s not the best way.
J: Which coming up Nordic events will Dawn Capital be present and available to meet?
H: We’ll be at SLUSH of course. And you can meet us also at Dublin Web Summit and TechCrunch Disrupt London.
J: And for the last one, do you have some one advice for the Nordic entrepreneurs?
H: You never regret doing it. Starting your own business. It’s the single most fun you can do. Start your own business, now.