Antler: Engaging with company founders in venture capital

Antler is a global early-stage venture capital firm investing in the world’s most exceptional people building the defining companies of tomorrow. We have offices in 21 cities to offer support, capital, and a global community to our founders.

We source entrepreneurs at the earliest point of their company journey and provide their first institutional pre-seed investment through our regional funds. We then select the highest-potential companies from these and invest in funding rounds up to series C using our global follow-on investment vehicle.

We have invested in over 450 portfolio companies^[1] in over 30 different industries, including artificial intelligence, machine learning, genomics, blockchain, and robotics.

Over 70% of our portfolio companies align with the UN Sustainable Development Goals (SDGs), while over 160^[2] meet our criteria for having impact.

Why we engage with founders

We proactively engage with our founders to raise their awareness and understanding of ESG and impact considerations that may affect company performance and, as an early-stage investor, we can influence them to incorporate these as they establish their businesses.

We believe the venture capital industry must prepare founders and their companies for future growth and development by helping them understand what might be required by legislation, shareholders, employees, and society more broadly. This goes beyond early-stage training around governance, best corporate practice, and diversity policies.

How we engage founders

At the earliest stage, we encourage founder teams to explore ideas that will contribute to the SDGs and aim to solve some of the world’s greatest challenges, such as social inequality and climate change. For example, we run sustainability industry workshops during our founder programs^[3], focusing on specific global or domestic problems that need solving, such as reducing e-waste or finding alternative energy sources.

Before we make an initial investment decision, we typically spend over 200 hours with founders – significantly longer than the industry average, according to research by Crowdwise. We believe a longer due diligence process can significantly decrease inherent biases that unconsciously affect investment decisions.

To further support strong ESG and impact understanding in our founders, we have developed an education platform called the Antler Sustainability Toolkit. This provides tools and practical guides to help companies incorporate different ESG and impact considerations as they mature.

When looking to make follow-on investments, we use an ESG questionnaire and scorecard that consider the risk and opportunity presented by these considerations. This includes how a founder/portfolio company approaches workplace culture, employment practices, supply chain selection, environmental effect, responsible product design, and data privacy.

We have a strict exclusion policy, articulating that we do not invest in weapons and ammunition, tobacco, illegal drugs, companies contributing to human trafficking, or companies with a net-negative sustainability impact. It further aims to exclude companies that do not align with our ESG principles^[4] and/or do not comply with domestic and international law.

We use a decision tree to assess whether a portfolio company’s business objectives address any of the SDGs and their underlying targets. We do this across all our investments, ensuring consistency across geographies and sectors.

We also evaluate whether a portfolio company meets our impact criteria – companies whose operations and business models actively address societal and environmental challenges and whose impact is intentional, demonstrable, and quantifiable. In April 2022, we began to incorporate the Impact Management Project framework into our investment process to help us do so. Our portfolio company example below, Reebelo, illustrates this approach to assessment.

We use this information to:

• fulfil our reporting obligations (e.g. to the PRI; compliance with the Sustainable Finance Disclosures Regulation);
• to present our limited partners with potential co-investment opportunities; and
• to connect founders addressing similar world challenges.

Portfolio companies sign investment documentation that incorporates our ESG approach – outlining first principles and good practices. These include open, honest, and clear communication; diversity and inclusion; ESG incorporation best practices to maximise positive impact on the environment and society, and compliance with laws and regulations. This helps increase awareness and enables commitment among our companies.

Alongside encouraging founders to use the Antler Sustainability Toolkit, we leverage our network of advisors and employees once we have made an investment to arrange training sessions on topics such as responsible technology and workplace inclusion challenges. Examples of real-life societal challenges that we address in these sessions include:

• Major social media platforms facing increasing scrutiny over their business models, questions over user data, and questions about their roles in influencing democratic processes and managing human rights
• Digital platform companies encountering challenges with ensuring living wages and proper health and safety standards
• Artificial Intelligence tools such as facial recognition resulting in unprecedented surveillance that could limit fundamental freedom of movement and assembly rights

We developed the Antler Sustainability Health Check for our founders in early 2022. It provides founders with an annual indicator score of their ESG awareness and intentions and our investment teams with a stronger monitoring and tracking process for non-financial factors. The score is based on responses to approximately 15 questions. The number and content vary by investment stage, weighted by applicability and importance.

Example: Reebelo – creating a circular economy for e-waste

Singapore-headquartered Reebelo refurbishes used electronics, such as smartphones, laptops, tablets, and smartwatches. It works with several vendors and sells quality-checked devices to customers, contributing to the circular economy.

When we encourage founders to build a specific idea, we consider various factors such as product, market and sustainability.

In a joint exercise, our coaches and the Reebelo team identified the circular economy marketplace as a big opportunity – particularly in Southeast Asia, where there are few companies concentrating on this global challenge – and decided to focus on addressing e-waste.

In addition to working closely with the founders to develop their business strategy and objectives, we have supported their geographic expansion by providing hiring support and local market knowledge. Reebelo’s goals and business outcomes strongly align and directly address SDGs 12 and 13 (Responsible Consumption and Production and Climate Action, respectively) and their underlying targets. As a result of our work together, Reebelo estimates that it has:

• reduced 30 tons of e-waste, based on the number and estimated weight of recycled electronic devices;
• saved 8,000 tons of greenhouse gases and 1,240 million litres of drinking water, calculated by multiplying the tons of e-waste saved by the average water and GHG emissions used when producing a new e-device; and
• saved consumers up to 40% - 50% on their favourite tech gadgets with a 3-year warranty.

While two of the top three biggest country contributors to global e-waste are in Asia, we have also seen a shift in consumers here being more mindful of how they purchase and dispose of electronics.

Reebelo’s success since its 2019 launch reflects this – the company has:

• grown revenues 600% YoY;
• surpassed 10,000 monthly customers,
• almost reached US$100m in annualised gross merchandise value, and
• set up offices in six countries.

Since our early-stage work with Reebelo, we have further invested using our pro-rata rights for follow-on investments in its latest US$20m series A round. We will continue to provide Reebelo with a global platform for its expansion and aim to help it achieve the target it has set of doubling its e-waste reduction to 60 tons in 2022.