In our second Meet The Investor interview, we speak to Hailey Eustace, founder of Commplicated and now a passionate DeepTech angel investor. Driven by her desire to work with companies and founders she truly believes in, Hailey shares her journey from entrepreneur to investor, the unique opportunities in deeptech and the qualities she values most in founders.
Why did you become an angel investor?
I worked as a deeptech VC over ten years ago in the US and really enjoyed it and since then I have worked in deeptech, including at a neurotech startup in Cambridge for five years helping it to grow from preseed to series A+.
Two years ago, I decided to found Commplicated and become a deeptech angel investor. I wanted to be a more meaningful part of the ecosystem and put my money where my mouth was. I said I cared about deeptech, but the best way to help is to actually invest in the industry so it grows. I became an Angel investor as I wanted the freedom to choose the founders and companies that I really believed in.
Which sectors or new investment opportunities are you most excited about right now?
I have a passion for women’s health. It is something I believe in and it is a huge growth area. It is absolutely a good place to invest in terms of valuations and with a gigantic market: 50% of the population.
I also really like deeptechs with a medium- and long-term application on the same trajectory. By this I mean a plan for short- or medium-term commercialisation that still helps them to achieve their long-term vision.
What are the key foundations to building a strong relationship between investors and founders?
Authenticity on both sides is very important as well as actually listening and respecting each other. It is a long-term relationship so it needs to be built on honesty and mutual understanding from the beginning.
What common misconceptions do you encounter among founders about the fundraising process, and how can they better prepare themselves to address these?
Too many founders start fundraising too early as they have been advised to build good relationships with VCs. But if you go to a VC too early, before you are ready to receive funding, you aren’t investable and you could be blacklisted as “not relevant” for their fund.
You should start preparing for your fundraise six months before you plan to start approaching VCs. The more you prepare at the front end, the faster your raise will be.
What are the most important factors that lead you to back startups today and has this changed over the years?
My interest and focus has narrowed. It’s like dating, when you start you don’t know what is right for you. As you get older you realise what you like and are interested in.
What hasn’t changed is that the founders I invest in have to be amazing; technically experienced and knowledgeable and within the top 10-20 people in their field. They also have to be commercially minded. I don’t invest in science projects, by that I mean they work on the tech without thinking about who the customer is, the market and how they are going to get it into the world. It is definitely a red flag if they don’t talk about commercialisation.
What is it about deeptech that represents such a promising investment opportunity?
I get excited about deeptech because these technologies will genuinely change the world and that represents the most exciting opportunity, and also the biggest upside.
Can you share a specific experience where an unexpected challenge influenced your investment decision, and what lessons did you learn from that situation?
I met a startup that went through an accelerator. One founder was responsible for generating the IP and the other founder managed the business side of things. The founders parted ways and there was a dispute over the IP. The founder responsible for the IP managed to retain it and was raising funds. Other investors saw this as a red flag and were running a mile. I however saw this as a positive: I thought if this founder had the grit and determination to get through an awful situation and come out the other side to try to rebuild the business, they can do anything. The startup went on to raise from multiple VCs and is now very successful.
How do you measure the impact of an investment beyond just financial return, and does social responsibility play a role in your investment strategy?
Impact is not the only decision criteria, but I tend to find that deeptech that solves a real problem in the world will have a positive societal impact. That is one reason why I am so passionate about it.
As market trends and economic situations evolve, what approaches are you employing to mitigate risks while identifying promising startups?
Peter Drucker said the best way to predict the future is to create it. Deeptech is creating a category and impacting society, not just the other way around. You must be willing to take a risk as an Angel investor. There will always be unknowns so as long as you stick to fundamentals of whether it solves a real problem and if it is a brilliant founding team, I think it will work out.
If you could offer just one piece of advice to a young startup, what would it be?
Follow your own vision and your own gut because when you start building a business for someone else it never works. You know your area and business the best. Investors should get on board or they are not the right ones for you.
What could the new Government do to best support the UK’s startup ecosystem?
There have been some good initiatives that have carried over from the previous Government including the Invest in Women Taskforce. The new government should focus on ensuring transparency to minimise bias in the funding process, especially with public funds. Supporting research in universities with funding and development programmes is important on the early side, and then working to build stronger funding environments for growth in the later stages of growth.
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