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This blog post first appeared first on old medium publication (https://medium.com/startuprad-io), and was moved to this blog with the relaunch of our website in summer 2024.
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We are the most active seed investor in Europe.Alex von Frankenberg, MD HTGF
The Investor
Alexander “Alex” von Frankenberg (https://www.linkedin.com/in/justdoitalex/, https://twitter.com/Justdoitalex, https://www.crunchbase.com/person/alexander-von-frankenberg) is Managing Director of Germany’s High-Tech Gründerfonds (HTGF).
We helped to raise 2,8 bn Euros in follow-on funding for our portfolio companies.Alex von Frankenberg, MD HTGF
HTGF is a venture capital investor with private (like BASF, Bayer, Braun, Boehringer Ingelheim, Cewe, Dräger, Haniel, Lanxess, RWE, SAP, …) and public LPs (KfW, German Federal Government). The fund has approximately 890 m € (1 bn US$) in assets under management and close to 600 seed investments. focuses its investments in Europe, especially Germany, but also invests across the world — even at a lesser degree.
In my experience in the venture business: It is really the “long tail” that matters … it is also in the long tail, in den deal flow, where you need to find the hidden gemsAlex von Frankenberg, MD HTGF
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I think our record was 28 days between first meeting the startup and signing the [investment] contract.Alex von Frankenberg, MD HTGF
The Fund
In 2005 HTGF (https://www.htgf.de/en/, https://www.crunchbase.com/organization/high-tech-gr%C3%BCnderfonds, https://twitter.com/HTGF, https://www.linkedin.com/company/high-tech-grunderfonds/) was established as a private-public partnership, to compensate — at the time — for the lack of active, domestic seed investors. Just two years after the bursting of the dot com bubble many seed investors went out of business and so an expert group of the German government recommended setting up a fund. The private investors helped HTGF to develop into a real venture fund, not only a public funding entity.
I reply to every email, even one that would just say “Yo, we should talk”.Alex von Frankenberg, MD HTGF
On average it takes three months between the first contact with HTGF and its investment. Note this may vary significantly during corona and maybe some time afterwards.
HTGF always takes the role of a lead investor in a seed-stage investment. This is due to their history. In later rounds, they will give up the role of a lead investor.
HTGF IV
HTGF is currently raising its fourth fund and is looking to close the fund in June 2022.
We not only open doors at our LPs for our portfolio companies, we also know many many other companies.Alex von Frankenberg, MD HTGF
The Video Interview is set to go live on Tuesday, December 22nd, at 19.00 CET (Frankfurt/Zurich/Paris/Milan)
We can invest globally, but we are focusing on Germany.Alex von Frankenberg, MD HTGF
The Audio Interview
Further Readings / Additional Resources
Feedback
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The Interviewer
This interview was conducted by Jörn “Joe” Menninger, startup scout, founder and host of Startuprad.io. Reach out to him:LinkedInTwitterEmail
Automated Transcript
[0:00] Music.
[0:08] That I owe you were podcast and YouTube blog covering the German startups.With News interviews and Live Events hello and welcome everybody this is Joe from startupradio your startup podcast and YouTube blog from GermanyI’m wearing a turtleneck so you can tell it’s Christmas it’s Christmas time approaching and Merry Christmas and Happy New Year to you guys this is the.
[0:37] Last interview we are going to publish this year on startupradio Darrow,only episode you can expect is on the 25th of December our legendaryfintech reviewed this year with a new concept of course I’m talking about an interview here and I do have a guest Europe’s most important seat investorhey Alex how you doing.Hi how’s it going I’m fine yeah it’s a real pleasure to have you here and we may tell the people a little bit about thatbackground why I tell why I tell the people he’s the most important that I da so you are working with high-tech corner for of course you can tell from the language this is a German construct it’s a,government and private backed font private public partnership with approximately 1 billion US dollar and the management and 600 seat Investments by far the most active seed investor in Germany,Europe and you actually do not only have funds from 33 large and medium-sized private companies like whole bad Bosch sap Bayer and BASF but you also do have,money from.
[1:57] Kfw and the ministry of Economics that’s an interesting construct can you tell us a little bit about the history and wed originates.
[2:08] Yeah of course maybe little correction up font we’re not,most important seed investor we see ourselves as the most active seed investor as we do for the new Investments per year and I have been doing this now for 15 years.
[2:27] And right now we are at number of 599,so next week will be the big 600 seed investment and on top of that we are very active doing follow-on rounds in our portfolio so on average we do almost 200 follow-on rounds in,the active portfolio of about 300 companies and this year we will be doing also 20 exits,so in total we’ll do like 250 260 transactions this year so almost every day every working day wanted action very very busy very active important I don’t know,we see ourselves as the most active what’s the history so we need to move back 15 years,in 2005 the actually the German government recognized the importance of innovation,so all Competitive Edge is not cost its,it’s quality it’s Innovation and they set up 12 work councils work groups around different aspects of innovation and one of them was dealing,the question of innovative startups and like then the situation was there were,no Innovative startups being financed in Germany as there was no money after the.
[3:41] Big burst of the mm bubble know everybody was afraid of investing in startups DC funds died out themselves they didn’t have any money or they tended to invest much much later.Because it’s too risky to invest in seed Stitch companies so the proposal out of this expert group came but not surprisingly to set up a fund,and then everybody within that group as well so let’s set up the sun who’s contributing what.And then the the German government said will be put on 240 million euro.
[4:17] Plus there were another 15 million from cave W which is a government-owned bank.And then six very large companies put up 17 million which is not much in comparison to the whole fun size.
[4:32] And and but there was significant because it put us in a very different way of we were no Public Funding agency but rather a independent,Venture fund with independent management independent structure separate office building very state-of-the-art it variable pay we could pick.We could build our team we could pick the best investment you could find so the product component is very important and then over time we did delivered significant value.For our public investment also for the private investors and that led in the to the fact that middle third fund that we closed two years ago.The share of the private investors increased to 34% they contributed 110 million out of the 320.It would be very similar to the fund so it’s nice to Bill gross has the public shareholders very happy the private shelters are very happy.And that’s our DNA we are profitable but our goal is not to maximize the profit of squeeze out the last Euro but we want to be successful of course,we’re profitable but we also deliver lots of benefit value for the startup scene for for Germany by building great companies that strive and are successful and create jobs and pay taxes.
[6:00] So you are an investor that not only defines its success by just having.Exits but also to contribute to the growth of the German startup scene we may add that the big boom you are referring to was the dot the bust of the.com bubble which.Especially Frankfurt pretty hard with all the companies of the neue mark disappearing I think that.Should appear does this quite a few very successful survivors,so I think a third of them survived and became even more valuable that than they were in 2000 but it was a bloodbath the the stock index of the.Of the of the tech companies in Germany there’s no marked the stock index fell by 95% so everybody was like oh my God everything is going down the world’s going to end.And that’s the that’s the scenario where we when we restarted basically the tech scene and Germany.
[7:08] Hmm um I’vebeen stalking you a little bit and of course everybody would like to learn more about you two can go down here in the show notes way you wherever you watching this or listening to this go down there in the show notes there is a link.To our to your personal LinkedIn profile as well I’ve been stalking you a little bit on several.Profiles and they told me not only yetdid you work for Siemens and Deutsche Bank you also have a PhD and you did an MBA at UT Austin do you think that,changed a little bit your mindset working in big corporates and doing an MBA in foreign country.
[8:01] Yeah definitely it was very lucky in over there are several stations that I had to see very different companies so before I studied I work as an apprentice,learning basically retail Banking and then you know very very.
[8:21] Very big and very prestigious dogger Bank studied business in Mannheim and with a scholarship I had the opportunity to study two years in Austin Texas and I think that,definitely changed my whole life my mindset because Austin actually a took that I was making back then and they sent me overas for aad notification program I used to be a big nerd nerd and then that was be notifiedgoing to Austin Texas and I think that that’s really what happened Austin with a big music scene and artists but also technews.And and and the University of Texas back then was a business plan competition where we were I very unsuccessfully participated and and I was really exposed the first time in my life to something else.Then what we saw in Germany I was exposed to tag to to the American attitude of trying out of just doing it.And being very positive and optimistic about the future and that of course changed I guess my personality quite a bit so yeah yeah and there was a great experience loved it.
[9:34] Diener defecation the first time I’ve heard this word here exist,it will exist from now on and if people ever write a Wikipedia article about that they have to refer to this interview right youyou’ve but you did not start as a VC investor from what I’ve heard you first tried a little bit in Innovation at Siemens.
[10:02] Yeah actually when I came back from from Austin I started to work for Andersen Consulting today Accenture doing big it systems programming and implementation.And then it was a very very good experience because I think it’s a very good way to start a tech when you later become a CI programmed not so shiny a COBOL on a Mainframe I can still do that.And and we implemented a huge payment system in Germany I spent some time doing the project also in Columbus Ohio and in Frankfort.And working for an American company I think in the early to mid 90s was a great experience because.The company was very Advanced and their quarterly performance reviews,there were criteria your performance was being measured with International and also them both teams now there was a very significant share of women Consultants back then on the project but also put an Anderson,and I think it was very unusual and in at that time most big German conference there were no performance reviews as advanced as a Zen doesn’t have them so I think,gold performance culture review culture but also teamwork and diversity was very good experience.
[11:22] I quit Anderson did a PhD for two years back in Mannheim.And was very interesting topic I was a huge Apple fan and back then Apple was dying.And I and everybody said it’s the better product it’s the better system that are quality compared to Microsoft Windows,but it’s not successful so it’s sort of funny and I looked at the question why was why isn’t one technology becoming the dominant standard as Microsoft Windows that become an apple almost died it actually it didn’t die just because,Microsoft invested in them to keep them afloat not to become a monopolist,and that was a very interesting questions or both competing Technologies and then all of a sudden there’s only one technology dominating everything becoming the de facto standard and that was the PHD thesis and I think it’s even still today,you see that question popping up all over the place will there be a standard and what do you do to become the standard.And after the PHD I went to an internal strategy constructed G Consulting unit from Siemens.And started in the very late 90s building and a corporate accelerator and there I caught the Venture Capital entrepreneur virus,ask the SS finished the accelerator I joined a start-up.
[12:42] A bit late in the cycle because because they quickly after a joint 9/11 hit and it was very difficult I was doing sales head of sales.Difficult selling because we didn’t get any more appointments but a good experience very good experience didn’t like it back then appreciate it very much today,and after the setup failed I went back to Siemens copper technology one of the leading leading.Tech hotspots in the corporate world and as a.
[13:17] Is it now with a business education and then we’re all physicists running around was tough to get the acceptance and will be did we identify Technologies but Siemens wouldn’t need,and then we build startups we took them over to business planThorson team acquired external financing and spank them out very very successfully.And from there on I went to htj F20 continuing that work at a much larger scale.
[13:48] I was a little bit smiling when you talked about all the physicists that,they had to accept you I wasn’t sure I thought maybe you did notification went too far yeah I think if you’re not a physicist.Whatever you are it’s hard to get a a acceptance.On a competence basis on a technical basis you have to find out the roots.And that that’s what happened I guess so so so it was the commercial expertise that I brought to the table and then combining the technical and the commercial expertise and maybe a little bit technical expertise on my side,we successfully spun out.Technologies but rather the researchers they really like them they really saw a huge potential and no one appreciated with her.
[14:43] We created new companies and.Cute with new they haven’t done that before and it worked well and they got external recognition the companies became successful so that was,quite a thing.
[14:58] Hmm sounds pretty good when we talked before because you say you’re the most active seed investor in Germany in Europe for me that means you are the most important but you were actually approachable we,we had a little joke going before we had this interview and I was asking you would you reply because you told me you proud of you,read and most likely reply to every email and I asked you what you reply to email that only States yo we should talk and you said yes.
[15:30] Yes I do so of course some newsletter style emails that obviously are mass emails that they don’t reply to.But you know my experience in the Venture business it’s really the long-tailed and met us on the performance side and its long tail that.Makes the fun performance and it’s also long kale in the deer floor we need to find the hidden gems the really interesting projects,and very often especially in the tech space its.For some Founders it’s not so easy to articulate really well so they don’t come across easily or easy to understand and and we made the experience that we saw,you no funny business plans funny Founders funny emails,and then when we look deeper into their word I mean great companies great great potentially great Technologies and with that perspective I think it’s really important to have a look and and to reply,and then once you get to know each other then maybe you come to the conclusion it’s not that great and then of course.Can’t invest in every company that you see but need to give everyone really a chance a fair chance and look at it.
[16:45] It’s tough because there’s more and more different inbox.Channels are of course we have email button that LinkedIn and Twitter and and Telegram and WhatsApp and SMS so once you’ve finished one channel then the other the next one is filled up and it goes around in circles.So I think it takes quite some time but I think it’s very well invest the time.Hi and there’s also slack I’m a member of lot of slack communities and there’s also a lot of messaging going on,fortunately people are not mad at me when I reply like one or two weeks later as long as I do reply I know where you’re going at atI’ve seen you that your podcast host yourself and I’ve seen you appear in a few podcasts your podcast is a very nice combination of German and English it is calledso Comfort ready with two Comfort is future in German what were you looking to do with this podcast.
[17:49] Yeah I think the title basically says we need to prepare for the future and need to be ready for the future because it it comes ever quicker,meaning that Innovation becomes ever faster more disruptive and we need to be even more prepared for,for the things that are coming for the future and basically what we try we try to find me really really good voices of the ecosystem to share their insights and,there’s so many people who not only are successful but we’ve learned a few things,that are worth sharing and that’s maybe a little another activity where we give back.Insights to the ecosystem and maybe also the big scheme is to encourage founders.To do the step to to try to set up the companies.Especially female Founders the shares way too low and so we’re trying to be positive encouraging.And appreciating because we believe the potential is is there and is very big.
[19:02] There with two statements that are really like when I listen to the your podcast appearancesone of them was failing by doing nothing and you equalize this or your interview partner equalize this with some German Industries they wait and see and when they realized ohthat is working it’s actually to like like Nokia with a smartphone what are your thoughts about that.
[19:33] I think the key point is the German engineering culture is to have a perfect product and and then in the end maybe it’s too perfect it’s over-engineered and the price that we pay,for being perfect is that we are slow and sometimes you’re very slow by doing nothing so we don’t try out things.And and I think the opportunity cost and that’s what I mean by failing the opportunity causes that we don’t.
[20:04] Tap into the potential of the opportunities that are coming along faster and faster so.Even when we try something and then fail.It makes us faster we learned to get feedback we get new ideas we iterate and try again.And by trying again we’re much closer to to finding oil too,finding the opportunity and let me do nothing then other people will grab the opportunity so I think the key to success is to be fast.And of course smart and then eventually hit the right direction but the worst thing to do is this of course nothing.
[20:57] Mmm maybe one last sentence because in the in the in the in the perfect culture.And the Perfection Perfection is culture in the engineering Germany,no but the aspiration to not do any mistakes you could do that by being perfect.Or you don’t do any mistakes by when you do nothing and very often especially in the corporate culture the goal to not make any mistakes.Leads to not trying out and that’s the certain path to failure.
[21:36] Hmm what would I also did liked it actually made me smile because you’re admittedly a very big fan ofBitcoin and in an switzerland-based podcast you talked about the goal of a Bitcoin atthousand US dollars per Bitcoin what are your thoughts behind that.
[21:58] Well it’s really the time frame when will we see 500,000 some people have have to eat at the end of this year in a few days.Some of their body parts because their prediction didn’t come true you know John McAfee 1 million and yeah I think.It’s easy if there’s only 21 million Bitcoins ever and a few million have been lost.And in there and and then if you look around as trillions and trillions of,of money of bonds of stocks of gold floating around and I think the files hundred thousand,the braking Force Buddha Brothers also have said that if you look at the market cap of gold and you apply that to bitcoin then it would translate into half a million per Bitcoinand I think in the long-term over 20 30 40 years it will be much much higher because money will inflate there will be much more money being printed.In all motor systems in the US and Europe and Japan also China,and now the more money is being printed and there’s a Limited store value like the Khan the higher the price will be so so I think the very long run,a hundred years will go to Infinity.
[23:22] Hmm at the time of recording this we standing at just above 18,000 US dollars per,Bitcoin let me get a little bit to actually what you’re doing the high-tech Conifer or HT g f is called on a short.This is a unique construct and goes back to Chancellor Gerhard Schroeder Canyon.Take us a little bit on the journey what let there.
[23:59] Basically it was the situation we’re in 2004 and 2005 only 20 startups in all of Germany,20 Tech startups got Venture funding,and by any comparison that number is too low and as a very long-term statistic that calculates the share of end of venture funding in the Germangross national product and that chair All Souls is very low and traditionally the German.Funding Finance scene is Bank driven and maybe basically that.That dates back to the end of the second world war everything was destroyed and then no one had any money but it was the bags that first had any money so they started to.To fund industry and companies so traditionally it’s a debt,finding culture not so much an equity funding culture and in Germany that the share of the households who World stocks is there on 10% much much lower than in most countries in the western world.So in that and that and that with that background.
[25:13] Trending back many many years and then the bursting of the internet bubble.No one really no one wanted to fund any.Startups the back with you there was no equity that was very very few Venture funds there were very very few Angels there was no corporate almost no corporate Venture funding.
[25:37] And that that and then there’s many many statistic Josh Lerner at the Harvard Business School is showed that Venture funded startups are much more Innovative in terms of patterns.And of course there’s all these success stories in the US but also in Israel and the UK and of course China and buy any comparison,Venture funding was too low and the potential at the same time as Germany is a tech driven.Economy society and the potential for successful service was much much higher so so they came up with the proposal to set up the fund and that that’s that’s it.
[26:23] I’ve been researching a little bit some of the Investments you guyit’s are having zechs wunderkind known for Wunderlist where you made an exit outfit reuse Elaine and Vinton the E should be pretty familiar to all,people listening to the podcast and I actually found three current portfolio companies namely bit Wallah.Code module in a very old interview Audio Only and creole lytx where we did the interview actually in the rooms of the German accelerator in New York that we interviewed.That is quite an interesting portfolio and you have much much more of course so everybody out there is wondering how you guys are investing how do you find your investing Investments.
[27:20] Yeah basically this this three rocks that the first round ispeople come to us they know us and they send us business class or get introduced to us the second world is we go out to you knowpitching events to Startup competitions to incubators to universities where we talked to Founders.Who are in the process of setting up the companies.And then the Third Ward around which is a little bit new we’ve been doing that now for two years we call it active sourcing so what we do we scrape databases,the German business register but also other databases where we look for newly funded tech companies.And then we approach them very actively and introduce ourselves and basically asked them if,if they will be open for investment and if there’s anything we could do for them in terms of helping the companies that have become successfuland the third world became quite significant especially this year because there is no events not so many events where we could go out and meet Founders yeah we go out and try to find them.
[28:36] Huh I’ll my mind is sometimes pretty devious and I was wondering if you ever wrote an email to Startup founder CEO we should talk.Maybe we did I didn’t but but we’ve been doing this for many many years so in the end of 2008 we invested in mr. Spex online glasses.And and definitely one of our best investments and,and I heard about the company you know somewhere in the in the late summer and I actively send an email to the gravel and CEO of me suspects inside while I think that’s an interesting concept.Would you like to talk and then we call it back and we talked and we convinced him to.Now to go with us which was very successful yeah and of course,the big challenge of course is to not commit anyone and by having a systematic approach where we scrape databases that’s what we try to do,what you guys are looking for what’s the Matrix what’s the background because we,apparently have seen some very b2c focused companies like Vinland ee like other stuff like mr. Spex what are you guys looking for and is this the focus of your Investments.
[29:57] So basically the portfolio is 80% B2B,and then Peter C is the smaller part and I think that that is because in Germany where like the btb guys so there is of course,very successful big to see companies but that’s rather the exception in when we when we read the web science and the public discussion people talk more about did you see because it’s easier to talk about it easier to understand you.
[30:23] You’re maybe customer and you know the product but Germany is really B2B and and also causes the CJ so very early,you know companies half of the companies that we invest in when we first meet them they’re not even founded,so it’s very very or leaders a demonstrator and prototype really there’s first Revenue so that’s a very clear,clear focused but in terms of Technology you’re very broad so basically anything anything with Hardware coyote robotics Machinery sensors,energy than anything about life science metallic biotechnology chemicals personal personal medicine,and then anything wrong Pew software companies fintech blockchain but also,artificial intelligence it security travel and help,basically anything with a tech or innovation approach is eligible for us.
[31:29] What is the term of time frame any startup would be looking at between let’s say first approaching you and then in case if you do invest the actual investment.
[31:42] I think our record was 28 days from really signing the contracts from the first meeting to signing the contract.But that’s unusual and I think it’s not so good because we need to we all need to get to know each other.I think it’s also important for the founders to feel comfortable with the investor and I think that takes a little bit of time on average I think you can calculate three months so we meet and then,we meet again and we start due diligence which basically means we try to even better understand what the founders are doing,and then once we’re positive in the detergent that goes in front of a board and then the board.But we presented as from our investors including industry make the decision and then we close the contacts so overall I think if you’re all working hard three months is it’s probably the median time frame the median.
[32:39] I see because I’ve heard about the investment committee before and just want to ask so apparently it’s about people you LPS as well as employees of H TGIF right.Yeah not really we have a two-step decision process first we have what we called team pitch and that pitch is really important for ourselves where we like.Pulling all the know-how all the expertise out of theinvestment team and as a team is very critical than we would reject decline the investment but they cannot make it positive decision The Next Step then would be the,official investment board and I think the investment board.I’m a high acceptance rate there and prove the weight the investment investment board is made up by representatives from our fund investors,so the government didn’t send any civil servants or government Representatives they send a VC and entrepreneur and a professor and then there’s industry,and pitching in front of industry is really.
[33:49] An opportunity to pitch for cooperation for maybe even a corporate investment it’s the first step to building a relationship to our fund investors it’s really much more an opportunity than a.A formal decision it is a formal decision but.
[34:09] Now it’s even more a opportunity to build a very meaningful relation tool to one of our industrial investors.
[34:18] When he said an entrepreneur VC and the professor thought heart there’s most likely somewhere joking that I cannot find it with another government I mean it’s an important point the government,now they have the majority in the front.So theoretically they could dominate everything and they decide nothing in terms of investment decisions,and that’s really really important we can we have done all our investments decisions.Based on professional DC criteria not all of them of course successful but there was no political Deal or No Deal where one.One Member of Parliament said well this is a company out of my region please unless the company in the company not not at all because it’s all based on.Pure BC now type criteria talking about investment all you guys also taking delete in a round.
[35:22] We always taking lead in the round and it dates back to our history when we started there were no other investors so no one less except task could take the lead.And we like that we remember very much like the lead because especially in the seed stage leaders fun because you can I mean you can you can change things or you can influence things you can help the founder of themost cases like two or three guys are girls.And as an investor you do have some impact now once you invest in the deer around and even if you’re the lead investor I think the influence is much more limited.And and but as much as we like to lick the lead role we hand over the lead role later on if so if there’s a large we see or even private Equity joining the company then of course it’s not us who has the lead.
[36:18] I see an in an old interview I’ve heard that the entrepreneur has to invest money themselves.
[36:25] Did used to be the case not anymore but the third fund that started in 2017.Miralax that criteria so there’s no requirement for the entrepreneurs to invest money sometimes we politely ask for that because if they’ve been very successfully.In the past and maybe they maybe it helps if they show some commitment and we’ve learned it’s even more important.If they contribute a little bit depending on what they can in later phases so if there’s a company hits a speed bump.And they have some issues three four years down the road and then the founder say well I really believe the company is going to be successful I have a little money not much but I put,the company I think that commitment is much stronger than the seed stage.
[37:21] Hmm okay now assuming you invested how do you work with your portfolio companies you introduce them to you LPS you coach them what do you actually do for the company’s besides just wiring some money.
[37:37] So the first thing that we do and I think that’s quite important we try we really try to understand the company and the founders.Because I think the worst thing that can happen to company is not an investor who does nothinginvestor who helps a lot but hasn’t understood the company completely because I think that that’s a good so we really try to understand and really try to you know,understand the situation of the founders and really try to understand where they.Really would need help because they are founders that entrepreneurs they are the CEOs of the companies,and they need to be in the driver seat so it’s not us who push them aside and says now we on the driver seat not at all.But if there’s a certain area where we can support them then we offered help and it focuses around a few areas and,now we’ve been very experienced in supporting the whole process of securing follow-on funding,rephrase 2.8 billion euros in follow-on funding for the portfolio and we know many many investors we know their criteria we can make introductions very familiar with them,as we have made common investments before so it’s much much easier for.All prefer companies to approach investors that we’ve go invested within the in the past and we also know.
[39:06] The criteria so we know the criteria of the national museum of the German disease but also the criteria of this is Angels so what we do we help the companies in the first one or two years to.To show a performance that they meet the criteria and that.Can can can be around sales they need to have minimum sales minimum of recurring Revenue to be.
[39:31] Interesting for me sees it could be the complement.
[39:37] Help the the founders of compliment the team so many cases,someone around sales sometimes it’s really a discussion around finding the right Focus finding the right direction or refocusing or pivoting the company.And of course we open doors in terms of Business Development we open doors to our fund investors but also to many many other companies that we know,and you know with it for a small start-up and a large corporation sometimes it takes a year or more until they find the right person to talk to and we can shortcut that process quite a bit.
[40:15] And I also do have seen on your website because you invest in companies you’re very successful and then you actually did have a lot of very interesting access right.
[40:28] Yeah especially this year 2020 has been record exit year it’s a little strange and scary that there’s a good crisis and at the same time.You know it made the record exit year.Yeah we sold nine companies to our fund investors out of the 125 that we sold.And maybe two of the transactions that we sold to our fund investors which were by the way the largest tool.Exit so far that we did this year we sold MR2 Haniel and Emma as an e-commerce.
[41:06] Mattress company and quite different from many other e-commerce metrics companies that were very very Capital efficient,they raced only six million and total from us and business angels and that’s it.And we sold the company for 200 to hang your giving us a very very nice multiple and what to me what’s really worth noting about Emma that they only needed,six million to achieve more than 200 million revenue and be profitable.It’s a very Capital efficient which we like because we didn’t get diluted so much and and and the other one last year that that’s worth noting actually was a Swiss company that we found in Geneva.Amount Therapeutics and we’ll basically what they do they,develop a solution to activate the immune system to find certain types of fight certain types of cancer.And we sold that company for close to half a billion euros to Birmingham England I’m also one of our fund investors.So it’s e-commerce not the high-tech and then it’s cancer therapy.High-tech so you guys can invest all over Europe or you just focusing on Germany.
[42:26] The focusing on Germany but we can invest actually all over the world so we’ve done a few investments in the US but it’s not a typical startup it’s basically a German us startup where there’s,significant operation in Germany and an incorporation in Delaware or somewhere else,but in principle we can do we can invest all over the place.
[42:51] You need to be close to the investment so typically a regional proximity makes sense in the feed stage.
[42:58] When we talked before and when I did my research even some of your former portfolio companies are now investing in u.s. LPS right.
[43:09] No plan yet we have one LP of the company front of and cologne.It was a company that we have in the deal flow and 2010.And back then or criteria was the capital needed new to be younger than one year and they were like one and a half years so we could invest in them because they were too old,being 1/2 years old and they got a business Angel investment basically and that’s all they got and then we became very successful and then they.Thunder on 2018 and said well I really like what you guys are doing and they invested in the fund but you’re totally right that’s one of our goals that one of our portfolio companies investing in the fund so.The race is still open talking about funds we now have 1 2 and 3 is there another fund of the horizon.
[44:02] What does many more fans on the horizon no seriously.There is number four on the horizon we plan to close number 4 June 20 22 so a little bit less than two years away from start fundraising next year and we hope that the corona.Situation situation is much better and the economy might better than.But also what’s also on the horizon is no blood by the German government some sort of.Later stage growth fund because that’s still a significant Gap in the funding because system in Germany,your large funding rounds of course how to acquire but then there’s very very few German investors who can write tickets larger than 10 million.So mighty that we can address that next year.
[45:02] Hmm that’s already a very good interview and we’re talking for more than 45 minutes so there’s just some final note how can people reach you and learn more about the process.
[45:14] Yeah I mean learn more about the process I think we have a,very good website you can look at the website I think that it says an explanatory I do recommend to talk to other Founders that we’ve invested in because it’s not just the process but it’s also anything around that.Other people really as nice as I say it and competent and of course you can talk to us and and,you can justuse any channel that you find you can call you can use any other Communication channel email and Twitter and Linkedin yeah and and we do we do makequite some PR so you can learn about us what other people say about us now other startups in the test all the Press.Yeah but we’re very approachable use any channel talk to anyone we’ll bill answer.And wheeled have down here in the show notes of course your LinkedIn profile your Twitter account and the website where people can learnmore thank you very much was just a pleasure having you herethank you for making the time on Friday afternoon and I know you have a stressful week but you keep working at it thank you very much greatly appreciate it and with just a pleasure having you here and hopefully T hear from me soon again.
[46:39] Thank you your honor was a great interviewer thank you for your time and well if there’s any questions just approaches thank you.
[46:49] Music.
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[47:02] Music.
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