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Thursday, 17 February 2022

My Morning Routine: Dina El-Shenoufy, Chief Investment Officer, Flat6Labs

Dina El-Shenoufy, chief investment officer, Flat6Labs: Each week, My Morning Routine looks at how a successful member of the community starts their day — and then throws in a couple of random business questions just for fun. Speaking to us this week is Dina El-Shenoufy (LinkedIn), chief investment officer at Flat6Labs. Edited excerpts from our conversation follow:

My name is Dina El-Shenoufy, I’m the chief investment officer at Flat6Labs. I’ve been doing it since 2011 and it doesn’t look like that’s going to change anytime soon. My job comes with a lot of responsibilities but if I really have to distill it, it’s portfolio management, fundraising and investor relations.

I tend to wake up at around 5:30 am and I need an hour to drink my coffee. It’s my sacred time. Following that there tends to be an hour or two of working out, depending on whether or not I’m training for a race. And then it's breakfast, email, setting the day, e-commerce browsing, and work.

Now I’m doing triathlons, which is why I tend to start with two hours of training every day. I started out as just a runner and I’ve been doing that my whole life. I started doing marathons around 2013 and at some point I needed to give my knees a break, so I switched to triathlons in 2018. I haven’t had a race in a while because covid has slowed things down. Pre-covid, I did the half Iron Man in Turkey, but the last few races have been here in Egypt

I tend to be a very disciplined person by nature. I have lists everywhere — mostly in my head. But I believe that sports have helped me to be very organized. They help me to organize the day ahead and to start the day earlier.

The origin story behind Flat6Labs is that we want to invest a hundred-mn USD ticket, but whoops, there’s no company that knows how to spend a hundred-mn USD. Flat6Labs is a very early stage investor because we want to eventually have a company that can absorb that. So the question is: how do you make companies investable, how do you get them to understand how to manage a company, not a product? How do you invest while being return-centric, rather than just a support program? We are actually investors, remember. This is why I think that Flat6Labs is actually an institutional investor at a very early stage with a very particular investment thesis to cater for the higher risk associated with such early stage investments.

When you’re investing at or just after the MVP (minimum viable product) stage, the likelihood of companies failing is very high, whereas a series A or series B VC would expect that 75% of the companies that it invests in will succeed. We are the opposite. We probably make 20 investments a year under the assumption that 75% of them will be written off and we have to do the returns on the 25% that succeed, but it becomes profitable on the overall portfolio. We do very small ticket sizes compared to a series A or series B investors, so it has a very different flavor.

The needle has moved a bit, which is also a reflection of the maturity in the market. When we started in 2011, we literally took ideas. It was the equivalent of USD 15k tickets at the time, and we took mostly idea-stage startups, but now more often than not there’s a product, we help them turn it into a company, and take it to market. But for 80% of our companies, we are the first investment they receive.

I hear statistics about global gender bias against investing in female-led startups but I always feel inclined to dig deeper and find out how it’s actually measured. At Flat6Labs we have a mandate and a target imposed by some of our LPs, and the struggle more often than not is finding a pipeline of female-led startups. As an investor, I look for female founders or co-founders, but we don't come across a lot of innovative ideas from female founders that have scalability and traction. But I do understand that there is a shift in mentality when a female is pitching versus a male is pitching, and in our organization it tends to be balanced out by having quite a few female managers. The other thing we put effort into is educating female founders in learning how to pitch. Female founders tend to be less courageous than males when presenting their companies.

I play Boggle and Wordle with my husband every single night. It’s our nerdy guilty pleasure that we have to do every night. And I also have to play Sudoku everyday, so the nerdiness continues.

I’m asleep by 9:30 pm every night, but I usually watch 45 minutes of TV. The series that I recently watched that was mind-boggling is a German show called Dark. It’s difficult and complicated, but it’s fantastic food for thought. Two books that I found to be life-defining are Ayn Rand’s The Fountainhead, and A Conflict of Visions by Thomas Sowell.

The best piece of advice I got was from a good friend of mine who told me to stop holding myself back and doubting myself. That was an eye-opening experience for me, and I think it’s advice I would give to a lot of females. We tend to have self-doubt and we tend to hold ourselves back.

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