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#5) A Major Failure of Mine - Oceanview.vc
130m NOK in fund commitments but ...
I thought it would be cathartic to write about a major failure of mine, Oceanview.vc, an early stage fund targeted at Norwegian oceantech.
With the support of Anders Haugland (then CEO of one of Norway´s foremost startup environments, VIS) and Tor Ole Rognaldsen, his head of venture, we went after a 300m NOK fund. My partner in crime was Olav Øverland, who had previously cofounded and run Gabler here in Norway.
It is more difficult to raise money for a fund than it is for a company. It´s a theory rather than a specific product. It´s accepted in being an entrepreneur that you haven´t done it before. In the fund world, you are expected to have done it before. So being a first time fund manager raises the bar significantly in the fundraise - even if you can point to your own entrepreneurial exits (and failures) and your own success (and failures) at angel investing.
We tried to formulate a fresh approach to venture capital - we railed against what we called “cookie cutter” VC who do everything by the book. Everything seems prof, they talk about their dealflow funnels and their due diligence routines and their “active” model but at the end of the day, it´s vanilla ice cream. With VC, we argued, that stuff does not move the needle.
We said, VC is a human capital business.
We said we hated the word “strategy” as being a word thrown around a lot with no weight. We wanted to focus on sales and marketing. Be concrete. Come up with content ideas, be creative. Suggest media buying tactics. Drive inbound.
We thought the CEO first and foremost should be Head of HR. The Chief Recruitment Officer. And we wanted to help her think like a coach on the football sideline rather than being the star scorer.
We had a great pitch to a new fund of fund in Norway who gave us the nod on a 50m NOK anchor investment. It was “subject to board approval” but we had express written permission to share their soft (firm?) commitment to others. We began to collect other bluechip investors one by one.
This took 18 months of blood, sweat, money, pride, fighting, disagreeing, agreeing, pitching, etc.
In hindsight we should have closed our first tranche of funding rightaway but we thought we had to wait until some magic warchest amount was amassed before we could begin.
The anchor investor ended up yanking their investment after a while and allocated it to another fund - and then one by one the rest pulled their investments too except for a few stalwart diehard investors (tusen tusen takk - you know who you are).
The official reason was they wanted to invest in a proven international fund team instead. But also, big lesson learned - we did not strike while the iron was hot. We let the iron cool off over months. When it comes to fundraising, do not assume a yes today is a yes tomorrow.
We put ourselves way out there publicly, and we failed. Bigtime. And this is a small country. And failure is still not acceptable in Norwegian business culture. It. Really. Is. Not. Even if some lipservice is given to it.
I cannot sugercoat it or gloss it. It hurt. It stung. It cut deeply. I felt ashamed. I begun to seriously question myself - what really are your skills Kelly? All air went out of my balloon. Face it Kelly you´re just not cut out for it. I withdrew from “the startup scene” completely. I didn´t want to face the laughter behind people´s eyes (real or imagined).
You see, ever since I moved to Norway I ´ve wanted to establish a fund. That´s now 14 years ago. I have mounted efforts previously to raise smaller funds but they never got as far as Oceanview. I´ve applied to VC funds along the way too for open partner positions and didn´t even make the first cut. Ouch.
But I have made some strong connections (friendships) with established as well as up n coming VC who have been very generous with their time and coaching of me. Here I would like to cite a number of people but then I would forget somebody important so I think I will leave it unsaid for now.
Corona hit and in a way it was perfect therapy for me. I stopped all work (or work stopped up rather). Went out to pasture. Took care of my kids. Walked and walked and walked. Cooked. Discovered new spots (meaning walks) I never new existed even though they were within 5k of my house and I have lived here over 6 years.
But significant development did occur I realize now that time has passed. I´ve had 3 people in the past 6 months ask me for the Oceanview deck because they remembered it for standing out, for being fresh and now they wanted to apply some of it to their own new fund work.
I was able to leap onboard one of the investments we had targeted, Sensar Marine, and work with the founder, Paal Kaperdal, over two years of trials, tribulations and yes, growth.
Anders Haugland and I are collaborating on one of Norway´s best kept secrets (for now), Entreprenerdy.com.
Olav and I became the closest of friends, the older brother I never knew I needed.
And Sarsia Seed, one of Norway´s top seed funds, rang me out of the blue and asked me to advise them on one of their investments, Green Power Hub. That felt good.
And, finally, not to be deterred, I have a meeting with a prominent fund of fund in December to discuss an emerging trend in the VC world - the rise of the Solo GP - to see if there might be a future with my own microfund in 2022.
I am trying to think of some lessons learned here. Like a Top 5 list you so often see online to drive clicks.
I tried. I failed. I learned. I persevere. I likely fail again.