Investor Profile: Bodil Sidén of Kost Capital

Bodil Sidén is General Partner at Kost Capital.

FUNDRAISING DYNAMICS

What’s the best way for founders to get on your radar?
Build great B2B ingredient and enabling tech companies! Under-promise and over-deliver. I have a soft spot for execution and love founders who walk the talk. I like to engage with founders early and the best time to raise is when you’re not raising. You are always welcome for a cup of bean-free coffee (own portfolio company REST) at our office in Copenhagen, otherwise I’m always open for a digital coffee.

What’s the most common mistake founders make when pitching to you?
Being too complex and wordy. Practice your pitch, be concise, and give some space in the conversation to focus on the key aspects of your business. There’s no need for long pitches and to walk through all details of your business in a first call - ensure the investor actually understands i) what you do, ii) what makes your business unique and iii) why you are the right one to build it. If you can nail that, then you have a good chance for a second call. And I know it sounds easy when I say it like this - but believe me, I also fall in the trap of being overly complicated when I speak about Kost Capital too. It’s an art to master and we all need to practice.   

What advice would you give to (FoodTech/AgTech) founders before their first meeting with a VC?
Just as in sales you should “qualify your lead”. Ensure you understand what the investor is focusing on, any certain mandates or focus areas that might be worth knowing about - and then you can adjust your pitch accordingly. I like founders that are in the front-seat of their meetings with VCs.

Do you have any key metrics (e.g. revenue numbers) you expect startups to hit at the stage you invest?
No, we invest in preseed and seed stage so the businesses we look for can be in a very early phase. However, we need to see customer feedback of some kind. Customers, pilots, LOI’s even, or other type of research or data that shows that there’s an actual need for your business. FoodTech founders especially, need to over-index on their go-to-market strategy, basically because it’s just a little harder and food will be eaten by someone at some point, so the market feedback is everything.

What are some red flags that prevent you from investing?
Lack of defensibility and execution. We invest in B2B ingredients and enabling tech and the companies we back often have strong moat, or barriers to entry, often driven by a strong IP and new science. If a company has high churn, or is easy to replicate, that’s a red flag for us since we want to see niched category leaders in our portfolio. Execution is the other side of the spectrum. It doesn’t matter how much defensibility you have if you don’t move forward, and building a company is a marathon. During the investment process I try to get a grip of the founders’ execution ability to get a sense of how they will be operating the business on a daily basis.

PORTFOLIO COMPANY DYNAMICS

What’s your philosophy around being hands-on or hands-off with your portfolio companies?
The companies are always built by their founders and that’s how it should be. At Kost Capital we support within three major areas: team and funding - we ensure to hire the best fast and support the founders in their growth journey - we also want to be helpful in bringing the companies to the next raise in a bankable way. Our secret sauce as investors is Kost Studio. Louise, Peter, Asmus and team are experts in food - to have a Michelin chef, a gastro-physicist, a food-historian and a team of product developers working daily in our test-kitchen is quite unique for a VC. We simply know food.

How do you like founders to handle things when everything is going wrong?
There’s only one given when building companies: you will make mistakes and you will fail. What differentiates good from bad is resilience (sorry buzzword) growth mindset - how you learn from the mistakes. I believe in being curious about mistakes and try to elevate from them, instead of using strong remarks. The learning pace needs to be as high as the growth pace in a startup’s journey.

What’s the strangest piece of advice you’ve ever given to a founder? Did it work?
Haha, that stays between me and the founder. But really, investing in the early-stage is really partnering with your founders. You share blood, sweat and tears together or - memes, voice notes and late phone calls - and we make each other better. 

CURRENT INTEREST

Are there any startups you’re looking for right now? Ones that are working on a solution to a specific problem?
We are really on the lookout for enabling technologies. We need to be more data-driven in how we produce food. ML and AI lead to new opportunities for innovation and scalability - imagine when we can predict nutrition, sustainability & flavour. I’m really optimistic about this development and would love to see more companies building in the space of food as software.

What’s a topic (investment-related or not) that once brought up gets you super excited?
Everyone that knows me knows that I’m obsessed with psychology and that I would love to have a clinic when I retire. But psychology in terms of building a really strong team, how to be performance-enhancing and combining strong values with being truly performance-enhancing really excites me. It’s easy to run fast, the trick is to do it while keeping people motivated and doing the right thing. I could go on about this forever… 

FINAL QUESTIONS

What’s the biggest misunderstanding founders have about you or your role as an investor?
This is a tough one. I’m not sure it’s a misunderstanding but one thing that’s not easy about this job is saying no to investment opportunities. There are more fantastic companies and founders out there than we can invest in. It is really not my favourite thing to do. 

What’s the most fun part of your job that founders might not realize?
Exit modelling in Excel? [laugh]. The second most fun part is definitely meeting all the founders. It’s truly a privilege to spend your days meeting fantastic people tackling really difficult problems. 

What’s one company (in any industry) you never had a chance to invest in, but wish you had?
You always have an anti-portfolio, right. From a food-focused fund based in Denmark it’s really cool to see both Matr Foods and Reduced raising significant rounds - later than our investment focus - and really scaling up their businesses. Promising for the Danish ecosystem and the later stage of food tech in general.