Endeavor talks with Paola Bonomo

Tell us about yourself. Who are you, paola?

I have been an Endeavor mentor since the early days of Endeavor Italy; Endeavor was actually something I had admired for a long time, and I was overjoyed in 2016 when the stars finally aligned and Italy could get started. At the time, after a Stanford MBA and a long career in strategy consulting, I was a digital marketing expert with a background in marketplaces, advertising and digital transformation. However, as time progressed, I wanted to see myself as more than a digital marketer, and I shifted towards another career wave, one where experience could be an asset as opposed to age being a liability. That’s how I started serving on corporate boards.

You have described your career as &quot”multifaceted” and driven by curiosity. Looking back, was there a moment or a choice that had a decisive impact on your journey?

Back in early 2009, I worked in a European headquarters role with eBay in Zurich. I made the decision to join Italian Angels for Growth (IAG), at the time a fledgling angel group, because I saw that the rise of digital platforms was enabling the birth of a startup ecosystem, and maybe I could become an investor in the next eBay!

At IAG, when I came back to Italy, I was able to meet many entrepreneurs, join some of them in their journey, and learn everything I know about pre-seed and seed investing. Between 2017 and 2020 I volunteered as a panelist on several Endeavor International Selection Panels. One of the people I met by doing this was Mario Costantini, who was planning the launch of Neva SGR, a fund investing in deeptech, cleantech and life sciences at Series A stage and up; and Mario invited me to become an advisor to the fund. So, all sorts of good consequences ensued from joining IAG.

Over the past ten years, you have seen the startup landscape in Italy evolve. What are the most evident differences compared to when you first started investing?

Things have changed quite a bit indeed. First of all, entrepreneurs have really raised the bar: today we see stronger teams, more compelling pitches, and more disciplined execution than we ever did before. Ten years ago, practically everybody was a first-time entrepreneur (unlike in other ecosystems, which already had perfected the art of serial entrepreneurship); today, founders who have gained valuable experience in a previous startup can power up a project much faster than when they had to learn how to do it the first time.

On the investor side, the number of early-stage investors has ballooned: I believe in 2015 there were 10-15 VC funds active in Italy, now there are maybe 100. The number of business angels has also grown. Our way of operating has become much more professionalized: for example, standard investment contracts are now the norm. We are much faster and much more effective.

Also, we have become better at teamwork. Years ago, a group of angels (or even an individual) could be the only investor in a seed round. Today, the size of rounds has grown, seed players have multiplied, and we have all realized that examining an investment from multiple perspectives is helpful in better understanding its potential as well as areas of risk.

That’s why we co-invest with funds that operate at the pre-seed and seed stage; having multiple players on board turns out to be of great help when the startup gets to Series A and beyond.

On the institutional side, the first Startup Act (2012) and the growth of allocations to various stages of VC by our state development bank, Cassa Depositi e Prestiti, have been two major enablers.

What stands out the most to you in a startup when deciding to invest?

I’ve spent a lot of time reflecting on these topics in recent years. There are three essential things: the team, the team, and the team. It may sound like a cliché, but it’s true.

A fantastic idea supported by a mediocre team doesn’t go far, while an average project with a stellar team can evolve, succeed and reach an excellent outcome for all involved.

It’s important to quickly recognize that there’s an issue if the founders are not focused or effective enough, lack resilience when faced with challenges during the startup’s journey, or are unable to grow with the company. Some individuals might be great in the early stages of a startup but lose their leadership abilities just as the company starts to grow. Others might remain focused on execution when they should be thinking more about strategy.

One important point to note for entrepreneurial teams, especially in the digital sector but not limited to it, is that thinking of and positioning their company as an “Italian startup” may not be very practical. Learning from the mindset of entrepreneurs in smaller markets such as Sweden or Estonia is crucial. Startups in these countries are born with a global perspective right from the beginning, which is essential to avoid becoming irrelevant. The best teams have a clear game plan to serve customers in distinct geographies; they establish and manage alliances, partnerships, and channels from the start.

Have these criteria changed over the years?

If anything, they have been sharpened. We know, for example, that the AI tools that everybody has access to today can help low performers get closer to the middle of the distribution. It cannot yet transform an average entrepreneur into a top 1% entrepreneur. Our job is to find those top 1% people and those top 1% teams.

What is the biggest mistake you see founders making when seeking funding?

Founders have become much smarter, and often they can create some degree of FOMO, driving investors to commit too soon merely because a round is perceived as “hot”.

In this environment, while some are tempted to game the system, I believe founders should keep in mind that transparency and fairness should remain paramount. For example, a startup should not invite more investors into the data room if the round is already oversubscribed; a polite denial builds a better relationship than an about-face two weeks down the road.

You never know: maybe the investor you needlessly antagonized could have introduced you to someone who would have led your Series A!

You have been very active in our network since we opened the Italian office, and in fact, you strongly supported its creation. What do you believe is the strength of Endeavor, and why, from your perspective, is it valuable to be a part of it?

Endeavor is a worldwide network of people who truly believe in entrepreneurship as a primary engine of growth and value creation. Even if they live in countries that do not seem sympathetic to entrepreneurship (regulation, bureaucracy, taxes, instability, corruption…), Endeavor entrepreneurs will doggedly pursue their mission to create a long-lasting enterprise.