Samira Qassim's Pink Salt Ventures was the first venture fund in the U.K. founded by a woman to invest in women entrepreneurs. Now raising her second fund, Samira shares her story as a trailblazer and reflects on the differences between the U.K. venture ecosystem and the U.S. ecosystem and how women founders and funders are still underrepresented in both.
Q: Although there is still much work to do in the U.S., more women are raising first and second U.S.-based funds with a mandate to invest in women entrepreneurs. On the other hand, you were the first woman fund manager in the U.K. to invest in women entrepreneurs and you continue to be the only U.K. fund manager with that specific focus. Why is the U.K. lagging behind?
In general, the European and U.K. venture capital market is less mature than in the U.S. The very established generalist firms here in the U.K. were founded in the '90s, while in the U.S. those types of firms – Sequoia and others – were founded in the '70s. There is at least 20 more years of development in the U.S. venture capital market and, given the highly developed ecosystem, there is more room for new entrants like diversity-focused funds. The same is true of the technology sector in the U.K. and Europe. When I started my career, the U.K. market was dominated by the large U.S. tech companies. Now there is a thriving European and U.K. technology ecosystem. And as the state of the entire sector has matured, it's no longer as hard to build technology. There are so many cloud-based and other platforms that enable founders to build a technology solution cost-efficiently. I think it took this level of maturity in both the venture capital ecosystem and the technology sector before the U.K. market started to realize that female founders are a massively undercapitalized area of opportunity.
Q: What is your background and what inspired you to start investing in women entrepreneurs?
I started my career in brand strategy consulting, working with CEOs and CMOs to reposition their organizations and work on their growth strategy and internal culture. Working for one of the Omnicom agencies, I did a lot of writing about trends and ended up writing about the technology industry, which I found fascinating. I was brought up to think of more traditional careers, like medicine, law, or engineering. However, once I started learning and writing about entrepreneurship and tech innovation, I realized that was my passion and I became a technology founder.
I launched a solar technology company with two business partners and then, as an independent contractor, I launched digital sales channels for Taco Bell. Through those experiences I was exposed to venture capital. When I began looking for my next entrepreneurial venture, I looked at trends within women's health and sustainable consumption, and decided that rather than build another company myself I could just invest in women who were building the businesses that I was interested in. My first fund, which has a single LP, has invested primarily in women's health. My second fund, which I'm raising now, is more broadly focused on software-enabled businesses, but still across health, consumer, fintech, future of work, and education.
Q: What are some of the challenges you have faced fundraising?
My first fund has a single LP, so I didn't have to follow the usual fundraising path. That also enabled me to build a track record of investing and credibility as an investor. I think, in my case, the difficulty has been justifying the investment thesis in the U.K. In the U.K. and Europe, diversity-focused investing tends to be subsumed in the very broad ESG category, which is generally focused on climate technology. As a result, the lack of diversity-focused funds is not widely appreciated. So, as I'm out fundraising, I have to convince potential investors that there is a need for diversity-focused funds. I've found that some investors assume there is plenty of funding and that, if female entrepreneurs are good enough, they'll attract capital. I find myself explaining that fundraising is a network game and that deals get done within those networks. Because of the lack of network connections there is a real need for funds that are dedicated to surfacing up the opportunities presented by women entrepreneurs and creating the pipeline into the more established funds.
Unlike the U.S., there is a lot of government money going into venture capital. In the U.K., we have the British Business Bank and, in Europe, the European Investment Fund, both of which support emerging managers. But, in reality, just like the U.S., it is very hard to attract institutional investment. The big institutional investors aren't geared up to invest in smaller funds. We are seeing more funds of funds focused on investing in micro-funds and solo GPs. But, like all fundraising, it's a relationship-building exercise, and that takes time and patience.
Q: Female investors in the U.S. who raise and manage diversity-focused funds still often have to explain to potential LPs that they are not sacrificing returns for "do-good" or philanthropic reasons. Have you encountered that?
Yes, the challenge is to persuade investors that you're just a classic VC but with a unique perspective on sourcing deals. That's all it is. You're still looking for the companies that can generate outsized returns. In fact, by virtue of these founders being overlooked, you're more likely to find great opportunities. You don't have everyone piling on the same deals and bloating up the prices. And the data shows that female founders exit quicker and are more capital efficient. But it's frustrating to even have these conversations, because you're basically saying women can be entrepreneurs and successful ones, which of course we know is true.
Q: Beyond your focus on investing in female founders, what is your investment thesis?
We invest in market-making, female-led technology companies. There needs to be at least one female founder with equal split equity. Beyond that we are looking for companies that are building the world that we want to live in. We like companies that are building something new and needed, and really adding value to the world. We're not excited about the next widget, but instead about ideas that are truly transformative with the potential to have an impact on the lives of people. We invest across pre-seed and seed stage, typically coming in as the first institutional check. We don't intend to build a really big portfolio. We want to back the founders we believe in and make sure that we can support them as they build their businesses.
In terms of geographic focus, we are not constrained by our investors to invest in the U.K. Both my partner, Saloni, and I are international people. I'm half Yemeni and half Irish and raised in England. Saloni is of North Indian descent and raised in Singapore. While we expect that the majority of the deals in the second fund will be in the U.K., we do look at deal flow from Africa, the Middle East, Europe, and the U.S. But, for the time being, we will probably be U.K.-centric, because that is where our network is the richest and deepest.
Q: How did you chose the name Pink Salt and what does it mean?
As I mentioned, I started out in branding and I worked with the person who came up with the BlackBerry name. So I was schooled by the best. From him I learned that a name is just an empty vessel. Rather than being overly analytical when coming up with a name for a company, think of it as just a name. It's what you put around the name that creates the story, not the other way around. The name can be anything – just choose something playful and joyful.
When I look at some of the iconic business names, they come from nature and they're very visual, like Apple and Sequoia. The same can be said for Pink Salt – visual and from nature. And when you can drill deeper into the name, you find many different expressions related to salt, like "worth your salt." During the Roman empire, soldiers were paid with salt, which is where the expression comes from. So it works for what we are doing – in many ways.