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Investor Advice with Daria Pelini

In this edition of Investor Advice, we spoke to Daria Pelini, an early-stage investor at Plug and Play Ventures, from her journey and passion for Venture Capital, to the key mistakes that startup founders should avoid.


Daria: On a personal level, I consider myself highly adaptable, curious, and outgoing, always eager to meet new people as I believe that everyone has something valuable to offer if you just listen carefully.


Career-wise, prior to my adventure with Plug and Play, I had the pleasure of working with an accelerator and incubator of startups, as well as with a group of business angels in Milan. The startup world has always fascinated me, especially by the hard work and strong vision founders need to build a startup.


The Startup Club: What do you usually want to see in a startup before you decide to look into it further?


Daria: As an early-stage investor, a strong founding team is an absolute must. I believe that founders need to possess a unique value proposition that demonstrates their deep market understanding and conviction in their vision. It's all about that "wow" factor that convinces me they've done their homework and know what they're doing. When investing at the pre-seed and seed stages, it is very common for founders to need to pivot and adapt the solution based on market feedback. So what really makes a difference to me, more than the starting point of the product, is the conviction that the team will be committed and have the skills to overcome future challenges.


The Startup Club: Based on your experience what are some of the frequent mistakes that startups make in their first steps?


Daria: One of the biggest mistakes an early-stage founder can make is ignoring feedback. Building an innovative project requires A LOT of trial and error, and that's something every startup entrepreneur should be prepared for when embarking on their journey. To achieve that, founders must rigorously test their solution in the market, starting with their inner circle and then expanding to early customers. Being agile and responsive to feedback and ready to iterate and adapt the initial features of the product, especially in the first few years, is crucial to finding the right product-market fit.


In some cases, founders might even need to be prepared for a complete pivot of the solution; being reluctant to adapt or change the business model can prevent a startup from seizing more viable opportunities.


Some other frequent mistakes include underestimating the time it takes to achieve success (many successful entrepreneurs are where they are because of their resilience and perseverance), overlooking the competition, and poor acquisition strategy and go-to-market.


The Startup Club: How did you get into this investment sector?


Daria: I have always been fascinated by innovation. Since I was a child, every new breakthrough, from the first touch screen, to smartphones, to the rise of social networks, 3D printing, and AI, has captured my curiosity. I've always been intrigued to know more about the brilliant minds that were behind some of the most successful innovations of the 21st century.


That's why I decided to dive into a master's in Economics and Management of innovation and Technology at Bocconi University. And guess what? the exam I loved the most was all about Venture capital! It was like a light bulb moment, confirming that this was the career path I wanted to follow.


The Startup Club: What is the most interesting aspect of your job?


Daria: VC is all about knowing new people and building your network. For me, there is no better feeling than discovering a founder with a great vision, who allows me to learn new things and grow, both personally and professionally.


Another exciting factor is the opportunity to be at the forefront of innovation and witness the birth of groundbreaking ideas. Innovation is an ever-evolving market that exposes me to diverse industries, technologies, and market trends.


The Startup Club: How can a startup best prepare itself to succeed in the present?


Daria: Starting with the pandemic and extending with geopolitical upheaval, falling equity markets, and spiraling inflation, startups need to forget the stable and generally favorable environment of the last few years.


In the current state of the market, we've witnessed a pivot from growth to profitability. The biggest tech companies are responding to this shift with massive layoffs while on the startup side, it has become essential to be conservative, look carefully into projections, and aim to have enough runway for the next 18-24 months. This paradigm shift also affects investors, who are now seeking companies that can provide short-term certainty.

To best attract investors' interest during this period of uncertainty and conservatism, founders should concentrate on sharpening their competitive differentiation and their go-to-market. The best product doesn’t always win, but the best go-to-market strategy and execution usually do, even in periods of uncertainty.


The Startup Club: What are the top 3 traits that startups should have to be more appealing to investors?


Daria:

  • Resilient & strong founding team: convincing investors that your startup has the right team to navigate unforeseen obstacles along the journey is crucial. Showing passion and commitment from the first call is essential to pique the investors' interest.

  • Conservative and sound business models: Startups that prioritize sustainability and profitability over reckless growth at all costs demonstrate a prudent approach to success

  • Highly scalable product and focus on customers' retention: even at the very early stages, having a clear vision of how to scale the product and how to build stickiness for customers is a must-have for investors.


You can connect with Daria on LinkedIn here.


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