VCs invest in founders. They exit companies.

Today, if you’re building a European tech company and putting together a moodboard for your new brand, there’s a decent chance Alan is on it.

Alongside Airbnb or Revolut, Alan (with its neon colours and furry mascot) has become one of those companies founders point to and say: hey, we want to look and feel a bit more like that.

However, in 2019, after raising its Series B, Alan wasn’t yet the company to copy. But that year, its founders made a deliberate bet on brand as part of their ambition to become what they called a “relational leader” in healthcare.

Now imagine explaining that decision at the board meeting. You’re competing in health insurance. You have a product roadmap to ship, customers to acquire, claims to process and an entire regulated market to figure out. I bet very few would expect to find redesigning our mascot somewhere on the list of priorities.

Yet in their 2019 shareholder letter, Alan’s founders described their brand as a “major differentiated asset.”

Today Alan is worth 5.5 billion euros and covers 1.1 million people.
Safe to say, nobody questions doubling down on the mascot any more.

Which points to a paradox I find interesting in the investment world: a VC might invest in a founder, but ultimately exits a company.

Brand is part of what happens in between.

This isn’t about the mascot
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The easy version of this story is that Alan bought a logo. That isn't what happened.

Three years in, they did two things. First, they worked with strategists on the brand platform, the strategic foundation. What it stands for, what it is building, where it wants to make a difference, why it exists beyond the bottom line. Then they commissioned a branding agency to handle the visual identity. What unique looks like, what different feels like, what people see. In their letter the founders write that their new identity intends to materialise their values and product pillars.

You can't be clearer than that. Visual identity is downstream from strategy, and if you want to become the next Alan… well you need both.

That same year, Alan brought in the Brand Director from Galeries Lafayette. You don’t make that hire to keep an eye on a logo. You make it because you've understood brand serves the business, and deserves a seat alongside the other functions building the company’s value.

This happened as the team grew from 64 to 164 people, hiring a brand lead alongside more engineers and sales. For Alan, 2019 was the year brand stopped being a nice-to-have and became a lever.

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Brand isn’t marketing.
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2019 was a good year for Alan. Annual recurring revenue went from €20.1m to €50.5m. Members went from 25,000 to roughly 66,000. Growth among companies with more than 200 employees multiplied eightfold.

You can see where this is going. Rebrand in 2019, revenue two and a half times higher, therefore brand works.

Except that isn't the full picture, is it.

The founders don't make that claim. They credit the growth to the product. What they do say is that brand had become that “major differentiated asset.”

And in the same letter, they admit the TV campaign was a miss. It aired too late, was too complex, and didn't move brand awareness where they wanted it.

Read those together. The brand was a major differentiated asset. The advertising was a miss.

Branding isn’t advertising, nor is it marketing. Alan's founders understood the difference.

So if the product drove the revenue and the advertising underperformed, what exactly was the brand doing?

Part of the answer is in the letter, though not where you would look. There's no section arguing for brand impact. There's a section called “A company is its people,” and it reports that Alan hired a hundred people in a year. By January 2020, more than half the company had been there less than twelve months.

At that point the founders couldn't be in every room any more. No company that size scales purpose by repeating it to a hundred new hires in person. What they believed had to become something other people could carry without them.

Alan’s brand’s first job wasn’t awareness, but internal alignment.

We've been saying for years that a brand is the sum of the people working within it. It's oddly satisfying to find a founder writing almost the same sentence to his investors, in a section about people and culture.

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Branding for the round
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How much brand investment you need depends on your stage of growth, and your stage of growth defines the round you're raising.

At pre-seed, the name of the game is speed. Speed to market, speed to investors. A landing page, an MVP, a workable deck, and a logo that identifies which company you are. That's about it. Anyone selling you much more at that stage is probably selling you something you can't use yet.

At seed, you start facing outward. You need a go-to-market, and your product moves from solving a problem for someone to solving it for a market. Your sales people need consistent tools. And your next investor wants to hear your long-term ambition and the operational path you’ll take to get there.

Then comes Series A and B. You have traction and now you need repeatability. You're growing operations, you’re hiring more, and you’re reaching a business model that scales. The company stops being an idea and starts being an organisation.

This post-seed stretch is often when VCs call us. Sometimes right after the seed round, in anticipation of Series A. Sometimes between the first institutional rounds.

Rarely to make things look better. More often, the business has outgrown the brand it was built with, and the gap is starting to cost it: in hiring, in sales, in market perception, and eventually in how the company is understood and valued by anyone doing due diligence.

Which is roughly where Alan found itself in 2019.

The marmot in the room
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Somewhere, someone who has never met Alan’s founders is pointing at the company and saying: we want to feel a bit more like that.

That’s telling because what they’re pointing at no longer belongs to the founders. It belongs to Alan.

And that is what should interest an investor. Ultimately the VC paradox is that early rounds are about investing in people, their vision, their conviction, their ability to build something that doesn’t exist yet.

But nobody acquires X% of a founder. At exit, you own X% of an asset that has had to accumulate value beyond the founding team.

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