Not your typical founder: What early stage investors can learn from Amira Yahyaoui
Atypical founders and asymmetric risk
This week Mos announced its $40M Series B round of funding led by Tiger Global. Read about Mos’ Series B announcement in TechCrunch here, Sequoia Capital’s account of Amira’s journey here, and Amira’s own words here. In addition to Amira and the whole rockstar Mos team, a huge personal shoutout goes to fellow investors Khaled Helioui, Deena Shakir, Alex Cook, Jess Lee, and George Robson. Let’s go!
In May 2020, I wrote about Sweet Capital’s decision to invest into Amira Yahyaoui: From Political Activist to Fintech Founder. Less than two years later, Mos has helped more than 400,000 students collect an annual average of $16,430 in financial aid; launched a bank; and today announced a $40M Series B round of funding led by Tiger Global, valuing the company at $400M. Yahyaoui also gave birth to a baby girl in August — the same month she launched the bank.
Despite these successes, Amira’s “atypical” background would have screened her out of many typical VCs’ investment criteria at the earliest stage. Why?
One of the things I love most about early stage investing is the ability to pursue opportunities that present asymmetric risk. Put simply: “Asymmetric risk is an investment scenario where the potential for profit or loss is imbalanced: the risk is not equal to the potential reward.”
At the earliest stage of investing, the pursuit of asymmetric risk seems logical: invest earlier, take a greater risk across a wider range of bets, and earn a disproportionate return on the small percentage that succeed. Yet it all too often it feels like the areas in which “risk” is being priced pertain not only to the stage of the company’s development, but to the founder’s character traits and background— be it family, education, prior work experience — or more odious even, a founder’s gender or race — intentionally or not. Taking the former criteria as an example, a recent report by Extend Ventures showed that 43% of all UK seed funding between 2009–2019 went to teams with at least one elite university team member (Oxford, Cambridge, Harvard or Stanford), while 68% went to all-male founding teams. Statistics on funding to non-white, non-male founders are even more depressing.
Amira and Mos throw this type of behaviour under the bus.
With the announcement of Mos’ Series B fundraising, it is my hope that founders and investors alike will take inspiration from Amira’s story and aggressively back a wider range of founder profiles.
Here are three ways that Amira defies traditional VC adages:
- She is not a technical founder. Amira had never founded a technology company and considers herself “the worst coder on the team”. However, she did know how to build a movement, lead a team and tackle huge incumbent structures (including governments). Founder market fit doesn’t always look like Stanford CS degree. What is the core job that the company needs to get done, and how do you solve for that authentically in a founder? What is the founder’s personal motivation for doing what they do?
- She had no homegrown network and no warm intros from family/friends. Amira grew up in the Tunisian desert, yet is now building a fintech company in arguably the most competitive country in the world. She is an immigrant and English is her third language. When she told her mother she was going to build a bank, her mother replied: “Are we allowed to do this — US?” (to which Amira replied, “Yes mom, us, normal people, can do whatever the hell we want”.) Amira believes being an immigrant and not having a homegrown advantage has made her more ambitious, helped her run through walls and pushed her to continue to challenge the status quo. “My lack of knowledge [has] kept me going.”
3. She has no formal college degree/fancy logos in her bio. Amira could never graduate from college in France as she was living as an undocumented immigrant at the time and you need a legal residency to pass exams. After being exiled from Tunisia she remained “stateless” for seven years, some of which time she was homeless, sleeping between shelters, the streets, and for a time, the public restroom of a university. What Amira’s background did demonstrate was tremendous drive and relentless passion for her cause, neither of which can be measured in Ivy League degrees.
As an investor, there is no characteristic I look for more in a founder than resilience. Being an entrepreneur is not a job for the weak-willed. As discussed by Michael Callahan, the best leaders are unwilling to compromise their values and the values of their company, even under tremendous pressure.
In this regard, Amira is absolutely not atypical.
If you haven’t already, I encourage you to read Amira’s “Culture at Mos” statement that she shared with her team. In this short memorandum, Amira’s sets out what is most important to her and the company. (1. “Mosters first, us second”; 2. “Operate like a guerrilla”; 3. “Revolution, not evolution”). Arguably, this could tell an investor more about Amira’s profile as a founder and how it may relate to the company’s future success than any other traditional metric.
As an “outlier” or “atypical” investor myself (according to Crunchbase, only 13% of VC partners in the UK are female, and only 11% in the US — and the numbers for BIPOC women are even lower) it feels natural to seek out “outlier” or “atypical” entrepreneurs.
I hope that one day those terms become redundant, however in the meantime, as Jeff Bezos says, your margin is my opportunity.