As we announce our new €200 million fund, here are the core beliefs which shape the way we work and help us give founders the edge:
Founder-led venture capital
Our two founders, 17 years after DN’s inception, remain active in every investment decision. We use our combined networks and experience to the benefit of all our portfolio companies. DN Capital was founded immediately after the tech bubble burst, and we raised our second fund as the global financial system crashed, so we know just what it is like to be entrepreneurs in the face of adversity.
Building globally impactful companies
Our first fund, despite being only €47 million of capital, was the only European investor in Endeca, one of the most important e-commerce infrastructure software companies of the last 20 years, and the lead investor in Shazam, the enduringly popular app brand on more than a billion phones worldwide.
Since then, we have led investments in what is now one of the largest online classified businesses in the world (OLX), the UK’s first online estate agent to go public (Purplebricks), the largest car marketplace in Europe (Auto1) and many other technology leaders such as Hometogo, Quandoo, and Parallel Wireless.
DN Capital portfolio companies have helped local governments connect with citizens to find disaster recovery areas after hurricane Katrina (Lagan). They provide cellular connectivity to rural communities without access to modern mobile networks (Parallel Wireless). And they finance small businesses which cannot access bank lines of credit due to their lack of credit history (Finiata). We are proud of the fact that our companies improve the daily lives of millions of people and thousands of businesses around the world.
Contributing more than just capital
When we meet with potential portfolio companies, we don’t just ask questions. We give direct and measured feedback and make business connections for those entrepreneurs, whether or not we end up with skin in the game. Part of our due diligence process is trying to identify customers and business partners for companies, before we have a vested interest in doing so.
When we do invest, we do not sit back in gilded offices and spend our days reviewing board packs. We believe in doing the hard yards. We pride ourselves on providing ongoing advice, connections, introductions, partnerships and mentorship, and never ‘just capital’. We are not always the most eloquent and are often a bit scrappy (we were once described as “a blue collar VC firm”), but most of our entrepreneurs will attest that we will get our hands dirty on their behalf.
We remain deeply engaged with the wider ecosystem, too, whether by serving as mentors in courses for budding entrepreneurs at local colleges, playing leadership roles in European private equity trade associations (Nenad is Vice-Chairman of InvestEurope), through our ongoing involvement with Harvard Business School Alumni (as founders of the HBS Venture Forum), judging start-up competitions or sponsoring networking events and activities for tech founders.
Focused, yet global
Each of the 11 investment team-members at DN chooses no more than three technology sub-sectors on which to concentrate. We map out markets, understand change dynamics for these sectors and use this knowledge to accelerate successful action for our chosen portfolio companies.
Once we invest, we leverage our global footprint, including operations in London, Berlin and Silicon Valley to help our companies land and expand into new markets, take away key insights from industry players in geographies other than their own, and raise their sights from regional to global success.
We consistently rate as one of the highest-performing VC funds in Europe, and the performance of most of our funds also compares favourably with the leading Valley firms. With the confidence to back our winners so they have the firepower to deliver explosive growth and stellar returns, we have a proven track-record of sourcing, building and exiting fund-returning companies in good vintages and bad. And it was this record that enabled us to close our fourth fund of €200m – over four times the size of our first two funds – substantially over-subscribed.
Financial Times: https://www.ft.com/content/f8ce8c4e-011d-11e8-9650-9c0ad2d7c5b5