What is the rarest thing in an investor?

Yesterday morning I stumbled upon James Wise's announcement of their latest fund:

In it, he gives an eloquent answer to the question posed in the title of this article:

“As any founder will tell you, there is no shortage of low conviction investors, willing to jump on a hot trend or pattern-match a CV - who might then drop you as soon as the numbers miss or the sector goes cold. High conviction investors are still in short supply, and so despite the general growth in venture dollars available, only half of the investments we make are actually competitive, because we have got conviction in a founder, technology and business when other funds haven’t.”

Reflecting on this passage, I realised how fortunate we are at HelloBetter to be backed by people with real conviction. By true believers, who drank the cool aid. They didn't let themselves be distracted by negative chatter about DTx or DiGA. They understood that our unusual team setup wasn't a bug, but a feature. They gave us the benefit of the doubt, crucially, when others did not.

I have a story to tell for each of them and somehow I feel like today is the time to spill the beans on these anecdotes. In the following, I will describe how they acted out of conviction rather than herd instinct:

1) Hevella Capital

When we raised our Seed round Hevella Capital told us they wanted to invest. But we also had an offer from Mangrove Capital Partners . Given their reputation as one of the best Seed investors in Europe, we decided to sign a term sheet with them instead. Unfortunately, on the way to the notary, Mangrove realised that another portfolio company saw them as conflicted and vetoed the deal. We had already signed a lease for an office and started hiring, so this placed us in quite a bind, to put it mildly. We returned to Hevella with our tail between our legs, asking them if they were willing to invest after all. Clearly, our negotiation position was pretty terrible at that moment. But Axel Von Starck and Jasper von Flotow acted with rare grace, simply crossing out Magrove's name in the term sheet they had given us and replacing it with Hevella's – leaving all the terms as they were. That is how to start a long-term partnership.

2) Expon Capital

Lily Wang from Expon Capital first reached out to us in September 2020. Working with Jerome Wittamer on the deal, they quickly established that they liked HelloBetter. They came to Berlin to meet the team?in the midst of Covid and decided to invest. But they were too small a fund to lead our Series-A. So they stuck with us as we were looking for a co-lead. Weeks went by. Months went by. We gave them regular updates. They made the occasional introduction. They stuck with us as we made progress, but also when we experienced severe setbacks. One institutional co-investor backed out on the day we were meant to sign a term sheet. Then, just a month, later a group of "super angels" did the same thing, deciding after months of due diligence and weeks of negotiating a term sheet that DTx was not for them. Expon did not waiver in their commitment to the deal. It took us a full year until we finally found another found with conviction:

3) HealthCap

We met HealthCap through a business development conversation with Orexo US, Inc. . The Orexo team quickly realised what an unusual company HelloBetter was and suggested that we speak to HealthCap as a potential investor. HealthCap, traditionally a Life Science and Medtech investor, at that point had only made ONE investment in a digital health company in the telemedicine space. But Staffan Lindstrand and his colleagues knew what good science looks like. They reviewed our evidence-base and concluded that in this respect HelloBetter was (and still is btw) simply second to none globally. Having learned over more than two decades of investing that products that work in the end are what wins in the marketplace, they decided to commit even though the regulatory regime was still in its infancy at this point and no one really knew how distribution would work. But they had the conviction that a team that managed to develop such effective products would find a way to figure those things out as well. They quickly determined in our first board meeting after our Series-A that surely we would need more capital than what we had just raised (as we had said all along...), so I was tasked with orchestrating a second-closing. As luck would have it, I found:

4) MassMutual Ventures

After an initial outreach by Cheryl Teo , I met Ryan Collins at Websummit. Being personally interested in the space, he had been looking for a mental health company to invest in for years. But the ones he found were either too academic, lacking the business acumen required to deliver a venture case. Or they had the expertise to build a cutting-edge product experience but had no scientific evidence proving that what they had built was, indeed, effective. In HelloBetter Ryan found both: academic excellence and experience in building world-class venture-backed tech companies. We basically had a hand-shake deal after the first meeting. Later, when the going got rough in 2022, Ryan doubled down, offering to lead an internal up-round before we had even asked him to do so. Even better still, he made the introduction to our next high-conviction investor:

5) HSBC Innovation

Ryan had worked together with Kara Byun from HSBC Innovation Banking at Goldman Sachs. As anyone who knows this working environment can imagine, they probably went through a trial by fire together. Therefore, I hit the ground running with Kara, after Ryan made the intro. We went from first call to in-person meeting in London in a week. After discussing HelloBetter over lunch for an hour and a half she looked at me and said: "This all makes sense to me and Ryan says it's good, so I'm in. Let's do something meaningful here: 5 million." Kara and her team conducted a complete due diligence process with military precision in a matter of weeks and she signed a legally binding equity commitment letter one month after our first call. That is commitment.

All of these stories illustrate what real conviction looks like in venture investing.

Thanks to this conviction we have been able to raise €25 million – so far.

A key factor that allowed all of these investors to build conviction was, of course, that we held up our side of the bargain.

If you invest out of conviction and Hellobetter looks interesting to you, let's talk!

P.s.

Congratulations again to James and the entire Balderton Capital team on a remarkable journey. I first met Rob over a decade ago while building my first venture-backed tech company, iversity . What a long way we all have come since then! It was great to meet Jacob Lehmkühler , the latest addition to the team, last week.

Upwards and onwards!