Interview with Fausta Pavesio, angel investor among the 50 most influential European women in Start-up and VC

Fausta Pavesio is an angel investor among the 50 most influential European women in Start-up and VC in 2018 and 2019.

Fausta is Investor and Venture Partner with Startup Wise Guys. She also serves as Member of the Advisory Board with Gellify, and Chairman of the Advisory Board with Neosurance.

Fausta graduated in Information and Computer Science at Università degli Studi di Torino, and has a deep understanding of the power of a new tech approach for innovation.

Q: You are one of the few female professionals in the venture capital field, and among the 50 most influential European women in Start-up and VC in 2018 and 2019. You have experience as manager, entrepreneur and start-up investor. How did you approach the venture capital field? Can you tell us more about your start-up investment experience?

Fausta: Two factors helped me a lot in my professional career.

The first one is the graduation in Information and Computer Science in 1977. At that time, it was uncommon to see women graduated in such field. My first job was in Fiat Auto, I joined a graduate program together with a group of male engineers, who never made me feel “excluded”. Then I joined Olivetti, and after a few years I started travelling the world together with my ex-husband. I therefore became a consultant, first in a small company called MIDA (acquired by EY), and afterwards in Value Partners, where I shared my experience and expertise in technology applied to organisational and strategic development.

The second factor is that I lived in the States in the 90s. At that time, Internet was blossoming there, so I had the opportunity to experience Internet as professional but also as a user at the very beginning.

In 1998, I came back to Italy and established my first start-up with Andrea Rangone and other colleagues from EY. We had the European licence of an US product that allowed us to develop low-cost, commerce-enabled websites. We sold the company after a couple of years. So, I joined Value Partners until 2007.

After that, I started working with start-ups. I became a business angel by chance, because a start-up gave me equity in exchange for my professional services. And afterwards, I made my first cash investment in the same company.

I was part of IBAN network until last year. I also had the chance to be Member of the High Level Advisory Board for the WA4E (Women Angel for Women Entrepreneurs) European Commission Project. This project allowed me to connect with other angel investors at European level, and build an informal network of investors.

Q: The Italian start-up ecosystem is growing, but it is still behind other European countries. In your opinion, what are the aspects we need to work on to make Italy a competitive landscape at a European level?

Fausta: One of the things I am truly convinced of is that a start-up must be European, it cannot target only Italy, or Spain, France, etc.. If a company wants to compete in a global context, it must be present at least in two or three European countries. A company must think big.

I also believe that investors should participate in and create international networks. Angels can help companies to enter and raise money in a target country. Together with other European women angels, I have built an informal network, which we would like to transform into something more formal very soon.

Unfortunately, the Italian system is still immature and presents some issues that still need to be solved.

In my opinion, the tax credit related to start-up investments is one of those. Tax credit is a good measure for initial stages, when a government tries to incentivise the first start-up investments. But then, it could be a burden for further development. Investment decisions must be based on the goodness of the start-up, on the fact that I believe that a start-up can be successful and can bring me satisfying returns in 6 or 7 years, and not on tax incentives.

Moreover, I think the tax credit discourages the creation of initiatives at European level. There’s an investment layer that is still missing in Italy, which is the seed investment, the one between angel investing and VC funding. This investment phase can be covered with structured international investments.

Q: Is it true that in Italy there is little capital for start-up investments? In your opinion, are there good investment opportunities in Italy today?

Fausta: Things are changing quite quickly, and there are more people who are approaching angel investing. These are people who have made a certain career path, who have reached top level positions, almost retired, and who would like to share their experience and put little money into start-ups, with the concept of “giving back”.

In my opinion, in Italy there’s capital for investments and it has always been. Start-uppers just need to know where to look for it, and good start-uppers have found it. The quality of Italian start-ups is still lower than in other European countries. But we have few champions. So, I believe that there’s money in Italy, there just have not been enough quality ideas till now.

And I also think that investment culture is still missing and must be created. The investment contracts between angels and start-ups are too sophisticated. In Italy, a start-upper loses 6 months to raise € 50.000 from angels, who pretend to get equity and way too elaborated conditions.

The convertible note is an investment instrument that can simplify this process. We all know that the main issue of angel investing is the company valuation. Neither the star-upper nor the angel investor knows the value of a company at the very beginning. So, a convertible note that guarantees a proper discount on the next round’s valuation, with a valuation cap or floor, fundraising time limits, etc. allows to reach an agreement in few weeks.  

Q: One last question. As experienced investor, what do you suggest to non-Italian professionals and investors who would like to approach our country?

Fausta: I suggest to build a network, by:

  • collecting info on several websites, such as Sifted, Startup Europe Club, Startupitalia;
  • going to international fairs (when it will be possible again..) where you can meet other angels;
  • and, getting in touch with local operators, who know the market, and with whom co-investing.

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