Founder-market fit is one of the critical factors for a startup’s success, giving operators (individuals involved in the day-to-day operations of startups) who become founders almost an unfair advantage in achieving this fit. Data suggests that a lack of expertise and business acumen in founders contributes to failed VC investments.
This principle somewhat applies to operator VCs (venture capital firms typically launched by former startup founders). While there isn’t definitive proof that operator VCs make better investors, recent research indicates that founders and operators who transition into VCs are significantly more successful at backing companies than traditional investor VCs.
Operator VCs have a long history in Silicon Valley but are less widespread in Europe and Africa. Only 8% of VC firms in these regions are led by former operators, compared to nearly half in the US. OpenseedVC is adopting this model in Africa and Europe with a new fund.
The firm, aiming to be the first check in startups launched by operators across both regions, has reached the first close of its $10 million angel-style early-stage fund. General partner Maria Rotilu mentioned that “the first close is well into the millions, and fundraising is still in progress,” without specifying the amount. OpenseedVC hopes to achieve the final close within a year, she added.
Supporting operators with funding… and operators
Rotilu founded OpenseedVC with the clear vision of investing early in experienced operators eager to launch their technology companies. OpenseedVC stated it would provide these founders with not only capital and conviction at the earliest stages but also the support of a seasoned operators’ community, currently comprising over 50 individuals.
“If you’re supporting operators who have identified a problem and are making the leap into building their technology, you’ve likely recognized a common challenge: the need for capital and guidance from other experienced individuals. To address this, we focus on enhancing the operator network in four key areas,” said Rotilu.
“In the early stages, expertise in software engineering is crucial. You need someone who has recruited technical talent, built teams, and understands infrastructure design, offering invaluable firsthand experience. If that’s the common thread, I would say firsthand experience is what we optimize for across software engineering, product, go-to-market, and people and talent.”
Most individuals in OpenseedVC’s operator network are people Rotilu has worked with or received referrals for. Some are also limited partners in the fund, though they don’t earn carry now. Rotilu also mentioned that other LPs include founders and professionals from traditional and tech businesses and high-net-worth individuals across Africa, Europe, and the US.
Backing pre-seed startups in Africa and Europe
London-based OpenseedVC is targeting at least 60 startups over the next five years. The early-stage fund, which operates with an open application process allowing founders to apply without introductions, will provide checks of up to $150,000 to startups focusing on commerce (including B2B software, AI, and fintech), productivity, and digital health.
“We focus on the earliest stages; that’s our sweet spot. Openseed is keen on making pre-seed investments, specifically the early stage of pre-seed, because the later stage of pre-seed is more where traditional VCs operate. We tend to move independently and quickly — and don’t necessarily require a founder to get a lead investor or anything like that before we invest,” Rotilu noted. The fund is interested in specific founder profiles within its operator-focused lens: domain experts (operators at high-growth tech companies, including first-time founders) and second-time founders who have built and exited a startup.
So far, the fund has made two investments: one in a stealth U.K.-based AI-enabled supplier dispute resolution software and another in Intron, a speech-to-text transcription model for underserved accents, beginning with Africa.
“We chose Africa and Europe to apply our thesis. Our thesis is that by backing experienced operators early in their journey with the right capital and support from peer operators, you can build a diversified portfolio that generates incredible returns for investors and provides crucial support for ambitious operators when they need it most,” said Rotilu, who prior to OpenseedVC, invested across multiple regions with different funds.
Before launching her fund, Rotilu was an operator in various roles, including country manager at Uber and general manager at Branch in Nigeria, where she helped both tech companies scale to millions of users. She later pursued an MBA at Oxford, where she served as managing director at the Oxford Seed Fund, one of Europe’s largest student-led funds.
Striving for a diversified portfolio
During her MBA, the operator-turned-investor with a computer science background interned at Hustle Fund, an early-stage fund in the U.S., where she gained experience investing in startups across the U.S., Latin America, Southeast Asia, and sub-Saharan Africa. She later joined Octopus Ventures, one of Europe’s largest funds, as a principal and fund manager of First Cheque Fund, the firm’s £10 million early-stage fund for European startups in B2B software, fintech, and health sectors.
Rotilu realized a need to focus more on Africa, where she had made several angel investments during her career. The London-based VC firm provided little avenue for that, and Rotilu, who wanted clarity and autonomy to develop a strategy suited to her experience as an operator and investor across Africa and Europe, saw this as an opportunity to launch her VC firm.
The increasing number of female-led VC firms globally is a positive trend, despite the challenges women, particularly those of color, face in seeking funding or raising a fund. As more women participate in venture investing and more LPs and firms support them, this trend will increase funding for female-led startups, setting the stage for success. Most female-led funds are aware of this significance, so it’s no surprise that OpenseedVC will actively look to support startups led by female operators.
“There are very few female-led funds globally, and we have a specific perspective on what a diversified portfolio should look like. We focus on diversification across geography, industry, and gender,” Rotilu remarked. “A lot of work is happening around diversity, and as a fund, we apply a gender lens to our portfolio strategy. We aim for a truly diverse portfolio, striving for a 50/50 balance in co-founding teams,” she said.
