Heiner was at an academy hosted by BtoV, one of the oldest VCs in Europe and UBS, the leading wealth manager. The exchange between participants was intense and illuminating. Angels, micro-VCs and VCs all in one room. Incredible people brought together by both BtoV and UBS. Some of them were building early stage portfolios since more than 20 years. All of us shared interesting aspects, methods and cases. War stories, including failures, missed opportunities walking and lying dead, but also1’000x successes were abundant.
One of the take-aways was that the probability to generate good returns in practice seems higher than the usual US academic figures mention. Especially, ventures, where the seed investor is close to the team seem to do quite a bit better.
Company building was also described as a way to significantly boost returns in a portfolio.
Another insight was, that the longer an investor is in the business, the more the assessment of the founder team becomes important in his due diligence. This seems to show, that over time investors develop a better intuition for people they can work with and trust. More gut feeling, less checklists. Of course, a VC fund like BtoV, with its fiduciary responsibility is obliged to conduct a deep dive regarding all aspects of the venture and to turn every stone to find a possible red-flag.
But also, professionally looking at any venture investment, one needs to focus on what could become exceptional, what has potential, what is out-of-the box, not what could fail.
A lot of discussion was around risk mitigation for the investor, thus liquidation preferences. The consensus was, for any early stage investor liquidation preferences and the like are really a double-edged sword, because such options to build pressure might demotivate the founder and give a bad example or signalling to later investors.
At Katalysen, we basically agree with the above ideas, however, we do never propose or recommend liquidation preferences, but, we do agree that returns and survival rates of early stage companies are far better than the usual US statistics might suggest.
We see (VC [Insert Smiley Face]) Katalysen as a Long Term Venture Partner that builds companies, supports growth in an early stage, and orchestrates an exclusive network of companies and investors. Katalysen’s business consists thus of three synergetic business lines:
- Partnerships & sweat equity
- Venture Builder
Being a partner to the company and striving to work only with founders we know for some time and fully trust, allows us to take a participation in a company without complex contracts.
But in any case, the excellent explanation by Christian Winkler (Partner BtoV) of all the possibilities was highly interesting for everybody in the room, even to the most experienced investors.
And, a great thanks to BtoV and UBS, both which we can recommend wholeheartedly.