‘The best founders listen to investors; look for help’

As a co-founder turned investor, Cristina Fonseca knows the different angles of running a successful tech business. Here are some dos and don’ts for Portuguese startups.

Portugal has been experiencing a tech boom for the last number of years, and VC funding has grown 15x from 2017 to 2021 to a record US$1.1 billion in 2021. Though small in European terms, it’s a number growing fast.

Cristina Fonseca is a Portuguese co-founder, venture partner and software engineer. Co-founder of Talkdesk, Portugal’s third unicorn (the country has seven at the moment), Cristina is now a general partner at Indico Capital Partners, one of Portugal’s leading independent venture capital firms, with investments across the Iberian peninsula.

Having made the transition from co-founder to investor, Cristina has a wealth of experience and advice to offer startups, particularly those early-stage businesses based in Portugal.

“I think the best founders listen to investors; listen to other people; look for help. I don’t believe they know everything,” said Cristina.

For early-stage investments, always go local

For small startups, early deal sizes would be in the €500,000 to €2 million range. It’s only local investors, according to Cristina, that would be in a position to afford the time and attention needed at that level of investment.

“You go speak with an investor from London or Berlin, you know what they do? They call [local VCs] and they ask ‘Who is this founder? Why are they not talking to you, you’re the local investor’,” said Cristina. “Everyone will ask ‘why are people in your country not backing you if you are one of the best founders?’”.

Look for the right money

Cristina advised that founders should be cautious about who they choose to build relationships with, and tactical about the long-term prospects on offer.

“Sometimes founders believe all money is equal. If you’re fundraising, think about who you want to partner with to help you achieve what you want to do,” explained Cristina. “And, most likely, those will be people that have done it before. I think founders, especially in Portugal, confuse everything. And sometimes they believe ‘Oh, I just need to get money’. That’s not true. That can really make or break your company.”

Investors are your partners

Cristina believes that, often, founders have the wrong mindset about investors, viewing them as competitors on deal terms rather than team members in their business. “Investors should be partners,” said Cristina, “And they will be people that want you to be successful, as much as yourself. Every time I invest in a company, I really want that company to pay my fund back.”

Cristina advocated for sustainable growth in a company, highlighting what a startup team should focus on when funding is secured: “The founding team should have the skills to get to MVP and onboard the first set of customers. So, if you’re starting, make sure your core first team has the necessary skills to get the first customers, and then you start growing.”

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Main image of Cristina Fonseca, co-founder of Talkdesk, on the Q&A stage at Web Summit 2022: Web Summit