Episode Introduction
This episode marks an exciting milestone for Funding and Disrupting with our very first interview of both are female founders. Our VC firm guest is Dr. Melody Lang, the Founder of the MPA Learning Fund, and our Tech Company Founder is Vivi Friedgut, the CEO & Founder of Blackbullion.
MPA Introduction
MPA is an investment fund backing purpose-driven companies focused on the future of learning. They are working with the ambition to make a large-scale impact. They want to give everybody a chance to fulfill their life purpose by offering them education, tools, self-awareness, a growth mindset, and empowerment.
Blackbullion Introduction
Blackbullion is a financial well-being platform that equips young people with money skills for life and improves access to funds. Available to 1 million+ students at almost 50 partner universities and colleges across the UK, Ireland, Australia, New Zealand, and South Africa. Their platform is deeply embedded into student support departments to help with funds distribution, providing financial education, and giving students the skills and confidence to create a money-smart future.
Dr. Melody Lang’s Background
Melody received her first degree, a Master’s degree in mathematics, from Pierre and Marie Curie University. She was motivated to pursue it because her mother always told her to do something she loves and be financially independent. She loved math and sailing so putting the two together got her her first job in the south of France doing the calculations for aerodynamics, hydrodynamics, stability, and performance for the Blubay Yachts company. During her time there she became envious that her colleagues could also do the drawings of the boats, so she eventually started teaching herself how to use AutoCAD and went for her Foundation Degree in Yacht and Boat Design from Westlawn Institute of Marine Technology. She went on to earn her Doctor Mechanical Engineering degree from the University of Bristol.
What Led Melody to the World of Venture Capital?
After earning her Ph.D. in mechanical engineering, she thought a career in academia going for a postdoc may not be for her. She loves to talk to people and didn’t think a postdoc would fulfill that need. She also didn’t feel like consulting, her current career at the time, was right for her either. After taking a step back she saw she had a passion for learning but was frustrated that the educational system hadn’t truly been updated since the industrial revolution.
Eventually, she found her perfect fit in the ed-tech space because, as she tells us, it “fulfills her geeky side and fits her background”. She started as an operator at Knewton, an EdTech company based in the United States. She was the first hire outside of the United States and stayed there for four years before she was approached by edvinca, a VC dedicated exclusively to EdTech. They were pursuing her because her industry expertise and her network would help them in making investments.
What Differentiates MPA
Melody tells us when the founders of EdTech came to pitch their ideas to her, she was the first investor they talked to that fully understood what they were talking about because she had been in their shoes. That connection created tremendous traction. To have a highly strategic investor was unique in the space. Being an operator investor in LearnTech is what makes MPA different. Founders are able to get operational support every step of the way from product to strategic partnerships. In addition, access to Melody’s network lets her open the right doors at the right time. Melody says “It’s also about values alignment. M, P, and A are the core letters in impact. Impact is at the core of everything they do.”
Vivi’s Experience Working with Melody and Her Team
“Melody is fabulous” is the first thing Vivi told us in response to this question. Melody was the one who messaged Viv and wanted to invest in BlackBullion. BlackBullion is a female-founded business and Vivi is the sole founder. It started out as true EdTech but has developed into more of a fintech company. Vivi says BlackBullion is not a “cookie-cutter investment” so people approaching her to invest, as Melody did, was a unique experience. The first time they spoke Vivi said she was impressed by how Melody looked at the world and the fact that the impact of the investment was fundamental to what they do.
MPA’s commercial and business objectives are well aligned with BlackBullion’s impact objectives. BlackBullion can’t do well as a business if students aren’t benefiting from their business and doing better with their money. Melody could see instinctively you can build a massive business while also making a positive impact on the world. Rather than looking for 100% year-over-year growth like many other investors, MPA approaches investments from a place of awareness.
The First Meeting
Vivi is the first to admit she isn’t one to play it cool and she gets excited when other people are excited about what she is doing. Vivi loved that Melody was an operator before becoming an investor. As much as people want to be empathic, if they haven’t built a business it is hard for them to understand the time pressure, budgets, and stress levels. However, since Vivi knew Melody already understood all of this they were automatically talking in the same language. Vivi could explain her vision without also trying to explain the exhaustion and challenges of building a team. She didn’t have to pretend that it was easy because Melody already knew it wasn’t and that led to a quick alignment of chemistry. As two impressive female founders Melody got Vivi on a human level and a business level.
What Excited Melody about Vivi’s Vision
Melody told us the main draw was “Vivi herself”. Melody saw Vivi pitch the business to a room of investors and says after she finished and left everyone had a “wow moment”. According to Melody, someone in the room said “I don’t care if she pivots 10 times, I am investing in her because she is making it happen no matter what” and that is exactly how Melody felt as well. Melody tells us that Vivi is one of the most impressive founders she has known. “She is a powerhouse” and has all the levels of resilience that founders, especially female founders, need.
Aside from her energy and her personality, it’s also her vision. She has her feet on the floor and is building a business for the business, not for the valuation. The valuation comes with the businesses. Vivi understands profitability is the base of the business and that aligns with how MPA sees it as well. Melody says some businesses care only about growing their user base without generating revenue, and too many businesses struggle to monetize a large user base. Melody and MPA are more comfortable backing a founder that is grounded in building a lean business that is super capital efficient. In fact, BlackBullion has a negative customer acquisition cost and that is highly unique.
What is BlackBullion
Blackbullion started with a singular vision: if young people are better with their money then everyone is better off. Vivi believes young people with financial literacy skills are less likely to drop out of education, more likely to go into education, and more likely to be good consumers of financial services. People who are financially literate have investments, pensions, and homes. Helping people learn about all of that was the initial vision. However, like all things, knowing is great but change comes with auctions. So the question then became how can Blackbullion put the action into the hands of students.
Turning Learning into Action
Blackbullion discovered that universities were making learning financial literacy a compulsory part of students applying for funding on campus. Meaning students have to learn how to budget to get financial assistance from universities. However, the processes they were using to facilitate that learning were straight out of the 1970s so Blackbullion set out to build a more efficient system. The Universities then told them the slowest part was getting the money into the hands of the students, so Blackbullion then built out a payments system.
After that Blackbullion decided to buy a scholarship company to bring it all together. They are creating an ecosystem for students with the medium-term vision of reimagining what the financial stack looks like for students. Empowering them to access funding, spend it well, acquire scholarships, then move into the workplace. MPA is a great fit for Blackbullion because they close some of the gaps in the ecosystem and they now are bringing students money, helping them use it well, then graduating out into the real world where having those skills can have a deep impact. Their “small vision” is to make everyone financially literate everywhere in the world.
Why did Blackbullion Buy a Scholarship Company?
Viv calls this acquisition a “boss move” because Blackbullion bought the company while they were at the start of a fundraising round. They had been keeping a close eye on a certain scholarship company and towards the end of 2021, the founder called Vivi and asked her if she wanted to buy the company. Vivi jumped on it and the board signed off immediately and she knew this was the right move. Vivi was convinced that people of lower financial means budget better than others, because when funds are low and price differences make a big difference.
A lot of students struggle with budgeting, but the big challenge is not having enough cash. The cost of living is high and rising, so Blackbullion was looking for ways they could help them access more money. Vivi thinks the future of work will see more alignment between corporate return and civil Britain because most of the money is in the corporate world. Vivi says we need to encourage these corporations to take a greater interest in the future workforce by putting their money where their mouth is.
Due Diligence from MPA’s Perspective
Once Melody had analyzed that there was a need and Blackbullion was attacking the right challenge with the right solution, she began looking at the team and the people involved with the project. Melody tells us there is something beyond rational analysis that tells you if there is a match. With Vivi, it just clicked and they were aligned. The second thing is to make sure there is alignment between values.
Melody tells us companies she backs need to address one of the three UN SDGs around quality education, work for all, good health, and well-being. As it turns out, Blackbullion covers all three with their solutions. Next, MPA looks to see indicators of scalability and growth so they can have the biggest impact possible. Lastly, she evaluates if there is trust and transparency. Melody says she has seen too many times where founders tell a different story to the investor and there is no way MPA can help a founder if they don’t know they need help.
Due Diligence from Blackbullion’s Perspective
Vivi says telling the truth is easier for her because she has such a bad memory that she doesn’t even try to keep lies straight. She has also seen founders overblow numbers or downplay issues but knows when due diligence happens it all comes out. So talking about the good, bad, and ugly from the start just makes life easier. For the first investment with MPA, the due diligence was about instinct and proving that instinct is right. All Blackbullion had at the time was a team and some numbers, so no one was digging so deep to make sure things worked how they should. However, as they grow and raise more money, and have more data, the due diligence becomes more intense.
Thankfully, Blackbullion investors already know the business because Vivi sends monthly updates on where they are and if things aren’t going well so there are no surprises in the deep due diligence process. Even though due diligence was pretty straightforward before, Vivi predicts their Series A will be different. There will be new investors and market changes. Thankfully, Blackbullion will be ready since they have always been efficient with capital and kept an eye on hard-core metrics. Vivi says “The market has now caught us to where Melody and Blackbullion have always been.”
Vivi’s Advice to Female Founders and Entrepreneurs
First, recognize you will never have all the skills you need. Vivi says the one thing she wished someone told her is that every 6 months she has to completely reimagine certain elements of how she is doing things. The leader she is today is very different from the one she was a year ago. Her advice is to “get good at what you do, and know in 6 months what you need to do will be different so try to anticipate the horizon as much as possible”.
Every 12 months she looks back at things that went wrong, finds the reasons they happened, and then tries to keep those risks top of mind. She also advises testing things with clients before you build anything out and being sure to surround yourself with as good as people you can hire and afford. She tells us “this is a very human job and so much about people”. About 80% of her day is about managing people and keeping the vision top of mind.
Above everything, she says if you don’t have a burning passion then do something different. This is hard and relentless, 24/7, and lonely. It is not for everyone and in fact, it’s not for most people.
How MPA is Working with Vivi to Support her Vision
MPA is a “boutique expert investor”, meaning they are very high in touch with support. That is why they like to invest in fewer companies and be able to give high-quality support. For example, that can look like Melody and Vivi going to breakfast and brainstorming strategy, long-term vision, and what Blackbullion can become. Or it could be Melody sending relevant articles to Vivi or making connections and introductions for her. Basically, Melody keeps her portfolio companies at the forefront of her mind and is proactive about helping them in any way she can.
Women in Business
A recent Pitchbook survey revealed that the US venture capital deal value for female founders reached $32.4 billion through the third quarter of 2022, already raising more capital than any year prior to the record highs set in 2021. On the check-writing front, the numbers underscore that the industry is still a long way from equal gender and diversity representation. Female investors account for just 16.1% of venture capital decision-makers in the US. Furthermore, 95.5% of venture capital firms have a majority male population of decision-makers.
Advice from Melody to Women Entering the Venture Capital Space
Melody acknowledges that it is encouraging to see the numbers increasing but also recognizes that we are far from equality. She advises female founders to be sure they understand imposter syndrome. Whether it stems from a lack of self-worth or not feeling good enough, a lot of women experience the feeling. She tells us that she is talking from personal experience and felt imposter syndrome when she joined her first firm in 2018 and found she was one of the only women who had never applied her math to finance, only physics and science. Impostor syndrome often comes from a place of comparison and competition. As in “look at all these other investors who have degrees in finance. Who am I to be doing this and claiming I’m an investor?”
However, over time, Melody has become more comfortable with who she is among the female founders. She knows the value she adds to the companies she invests in. That is why she hands over her companies to other investors for anything series B and beyond. She knows she is strongest as a pre-series A investor.
Advice from Vivi for Female Founders Considering Partnering with a VC Firm
There is a huge difference in pitching institutional investors versus family offices. One piece of advice she gives is to wait to raise money until you have to. Only raise institutional money to “power the engine not to build it”. Since It is a very hard journey, you should do it only when you are best positioned to do it. Specifically for women, she says “except that it will be harder for you. That makes it easier if you know it will be hard.”
A lot of people talk about how it isn’t fair for female founders. This is true but not helpful. In her perspective, the best way to make change is to be the change. For example, if there are more women that are female founders and investors the game will eventually change. However, as we know, change on a societal level moves very slowly. That is a reality of history. However, if you quit because of that fact then you are the one standing in your own way.
Overcoming Rejection
Vivi says she had 71 rejections for this current funding round. “We have to be able to keep going and seek out the 72nd and 73rd. If you can’t do that then don’t start”, she says. “It is hard and it does make you question who you are. With business, people say “it’s not personal it’s business”, but when you are a founder everything is personal”. Some founders may need to look at other sources for funding. However, as female founders, try to find other great female founders in the VC space. Vivi says the whole process becomes much easier because they get it. Vivi says she doesn’t have to overcompensate for Melody like she would if she were a man. “That is the reality of the world in which we live. That doesn’t mean we can’t change it but you have to call it by its name to change it.”
Contact
- The best way to contact Dr. Melody Lang is through her Linkedin
- The best way to contact Vivi Friedgut is through her Linkedin or Twitter
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