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Written on 20th November 2008
6 COMMENTS 
Boris Veldhuijzen van Zanten, Serial Internet Entrepreneur
According to Library House, a Cambridge based research firm, German investors among Europe’s most active VCs. In particular this one VC named High-Tech Gründerfonds Management was the most active investor both in terms of total deal activity as well as first-time investments. Sounds like they REALLY want to get rid of all their money!
With €272 million from a combination of public and private-sector sources, including KfW Bankengruppe, Germany’s federal bank, as well as corporates BASF, Siemens, Deutsche Telekom, Daimler, Bosch and Zeiss it might take some time before they really run out of money to invest.
Feel free to help them though! Send in those business-plans and start your “How to bluff your way into German” courses!
Do know that this fund has fixed deal terms leaving little room for negotiations. They invest no more than €500k in exchange for 15% of the companies they invest in and save some money for a second round, should there be one. So far however, 37 out of the 43 deals it completed during the period were first rounds.
If you start negotiating with Germans here are a few tips: never touch them. They don’t like it. No hands on shoulders or patting on backs. Keep things formal, even during dinner or when they seem relaxed. If they make you an offer, in general, that is the amount they want to spend. The first offer is what they think is reasonable and not an invitation to a counter offer unless you have a REALLY good reason to make one. If they seem angry during the negotiations don’t panic. That is just the way they negotiate. More tips for dealing with Germans? Leave comments!
The European Founders Fund, the investment vehicle of the Samwer brothers, founders of auction site Alando.de (acquired by eBay) and mobile content provider Jamba! (now part of New Corp’s Fox Interactive Media) is pretty busy too. In 2006 and early 2007 they did ‘only’ 6 new investments. In the past 12 months they invested in 14 new companies!
According to Library House the string of new deals by German VC firms over the past year comes as most other European VCs were scaling down their new investment activity.
Written on 13th November 2008
3 COMMENTS
Boris Veldhuijzen van Zanten, Serial Internet Entrepreneur
I just received an email from Tom Batten (at London and Palo Alto based) DN Capital with some good news!
“DN Capital recently had the first close of its second fund GVC II and is actively seeking investments in European software and digital media companies requiring growth capital.”
In other words: we have money and want to give it to you. Tom is looking for profitable companies with quarterly revenues of at least €750k who are growing 30%+ pa.
That rules most of us out unfortunately.
If your company is doing well and you are seeking capital for growth, founder liquidity, or change of control, don’t hesitate to contact the kind people at DM Capital!
I wish I would get more of these emails!
Here are two examples of investments that highlight DN Capitals growth strategy:
Written on 2nd August 2008
3 COMMENTS
Boris Veldhuijzen van Zanten, Serial Internet Entrepreneur
There are several ways to get your start-up funded and one of them is the so called Triple F Fund. The 3 F’s stand for friends, family and of course: fools. The FFF fund is often overlooked as a viable option for getting funding. There are some drawbacks to getting money from these groups of people and one of them is getting everybody organized.
Now there is a service which plans to organize this unorganized group of individuals and make it easier for you to get your first round completed. As Cornelius Colin McNab, Founder of 40billion.com explains:
“We are addressing a $40 billion gap in funding for small businesses, and our goal is to help all those hardworking entrepreneurs that have good ideas but don’t have the money or resources to get started”
So, instead of focusing solely on professional VCs you might want to consider using 40billion.com to get started.
Written on 16th June 2008
4 COMMENTS
Patrick de Laive, Internet entrepreneur and co-founder of The Next Web Conference. Twitter: @patrick
Germany-based Sevenload, announced at Supernova today that they secured ‘a double digit million euro’ investment from T-Venture which is a part of Deutsche Telekom.
First of all, what is Sevenload, you might think. I’m sure a lot of people have heard of the name, but when asked what the company does, it becomes more difficult. The official statement: “Sevenload is a social media platform for video, photos and interactive show formats”. In my own words, take Flickr, Youtube, Vimeo and Blip.tv, combine them into one company and you have Sevenload. Sevenload is especially well known in Germany, but with this round of funding, they’ll try to conquer the rest of the world. Starting as a sponsor of Supernova 2008, I guess this will be their first effort to enter the American market.
Sevenload also announced that they joined the “User Generated Content Principles” initiative, to protect copyright claims of content owners. This initiative is backed by big US companies like Disney, Microsoft, Fox, CBS and MySpace.
Oh, by the way, that is Ernst-Jan with a Sevenload shirt, a present for my girlfriend.
Written on 19th March 2008
5 COMMENTS
Ernst-Jan Pfauth, editor in chief
Mike Butcher from TechCrunch UK started the second panel as a depressed man. The credit crisis not just affects the world’s economy, but also the mood of one of Europe’s best bloggers. Luckily there were four investors at Plugg to cheer him up a bit.
Paul Fisher from Advent Venture Partners noted that lots of the start-ups have an advertised-based business model. And online advertising is still growing. Moreover, there’s a continued roll-out of broadband, specifically in Eastern Europe. He also said it’s a challenging time for VC’s: “Talent is a lot more expensive now”. So an important issue, according to Fisher, is that start-up expect more than VC’s.
Julie Meyer (Ariadne Capital) sees the crisis as a way to seperate the women from the girls and the men from the boys. The one’s that really want a start-up will pursue. So she sees it as some kind of filer. “It forces entrepreneurs to be a Fiat Punto instead of a Mercedes S class. Discipline is important now”. Reshma Sohoni from SeedCamp agreed with her: “Companies are now more careful with cash burn and costs”.
So in a few years, people will ask successful entrepreneurs: “What’s your secret?!” Those guys will then probably say: “Wel, we started in Q1 of 2008 and learned to start a company in an efficient way.”
The investors convinced Butcher. I even heard him saying a remarkable thing, something you would expect from a optimist instead of a guy who just lost his faith in world economy: “Yes, it’s a fantastic time to build a start-up.”
Written on 9th March 2008
0 COMMENTS
Ernst-Jan Pfauth, editor in chief
Yoav Andrew Leitersdorf, Managing Partner of YL Ventures – an European and Israeli early stage technology venture capital fund – emailed me that they will announce tomorrow that YL Ventures is appointing Robert Goldberg as a Venture Partner. He is a Silicon Valley Internet and digital media veteran and now shifts his focus to Europe and Israel.
So I’ve emailed mr. Goldberg with the question: why Europe? Isn’t it more attractive for an American VC to focus on the 300 million English-speaking people market of the US? He replied, saying: “After spending considerable time investigating and experiencing the European market first hand and through Yoav, I’ve come to the conclusion that there is a very interesting investment opportunity there for several reasons.”
“First and foremost there is a pool of passionate entrepreneurs with substantial technical talent. Second, similar to what happened in the US in the early part of this decade, Venture Funds grew larger and more risk adverse, largely abandoning their ability to invest smaller amounts of money in early stage companies. That trend has reversed itself in the US, but not in Europe. This leaves great entrepreneurs with early stage ideas fewer options. The opportunity is filling the excess demand with supply! Thirdly, although in many ways trends and ecosystems often develop first in the US, that can also lead to a kind of group think. I have found a different, often refreshing and more innovative approach to developing opportunities in the market place coming from European and Israeli companies.”
Of course, the European internet entrepreneurs who are reading this article now, wonder whether Robert Goldberg might be interested in their start-ups. Luckily Goldberg is kind enough to give you a profile: “We are focused on companies in the media, mobile and internet infrastructure space that have a passionate founder with domain expertise. These companies have business models that are capital efficient in that expenses can be kept in sync with market traction and revenues.”
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