At first glance, the glass-ceilinged atrium inside the skyscraper which houses the Investitionsbank Berlin in Wilmersdorf might seem an unusual venue for the city’s entrepreneurs. And indeed, there were plenty of suits and ties to be seen as the European Venture Summit got underway on Thursday. But this was not an overly corporate affair skipped by those more used to the old world charms of Mitte and Kreuzberg – rather, the serious number of investors from across Europe were joined by more than 120 startups which had won the chance to present at the two-day event.
Before the serious business of pitching began, however, there was a chance to hear from two of the most important institutional figures in the Berlin scene – Ulrich Kissing, chairman of the IBB management board, and Cornelia Barbara Yzer, Berlin Senator for Economics Technology and Research, who emphasized the need for more investment money in the city.
Organised by Europe Unlimited, the EVS caters not only for ICT but also for the cleantech and life sciences sectors. The startups were selected from a series of regional events held across Europe during 2012, and the summit is designed to be a marketplace for talented entrepreneurs and VCs and corporate investors to hook up.
And the first morning was the perfect occasion for Senator Yzer to demonstrate how much more seriously the Senate is taking startups in Berlin nowadays. Describing the German capital, with some justification, as the “most vibrant and creative city you can find in Europe today,” she praised the “explosion in startups” and insisted that the availability of money is a key factor for success: “Enough risk capital for all stages is crucial We are very eager to create a good environment for investors with events such as [the EVS]… It is also key to attract venture capitalists from all over the world to come to Berlin and to offer their capital for the investment of an international community.”
It is good to see an acknowledgment of the lack of funding which many entrepreneurs in Berlin highlights as the scene’s most significant failing, although Senator Yzer did fall into the ‘new Silicon Valley’ trap, stating her pride that “the European Commission already named Berlin the new European Silicon Valley.”
‘The Foundation is There’
Ulrich Kissing, meanwhile, said Berlin is THE hotspot when it comes to startups and new entrepreneurs. And while the city is still suffering from its chaotic and divided history, lagging behind the rest of Germany and Europe, things are changing: “The dynamics are there: We are growing faster than the rest of Germany. There is a long way to go, but I think the foundation is there.”
He insisted the IBB can be a key element in helping to grow the young businesses which are sprouting up everywhere: “Entrepreneurial spirit should be in the genes of all employees of IBB. Why? We focus very strongly on supporting young startups, young entrepreneurs and young companies to grow here in Berlin.”
The speakers were joined on stage by William Stevens, CEO of Europe Unlimited, who followed the history theme by urging the attendees to bring down walls between investor and entrepreneurs: “Bringing down walls is very important; it changed this city, it changed the perception of Berlin in the world… President Kennedy [came] here almost 50 years ago, saying ‘Ich bin ein Berliner.’ I think if [President] Obama had the privilege to come to Berlin, he would probably say ‘Ich bin ein Berliner,’ but he would also say, ‘Ich bin ein Unternehmer.’”
Following these speeches, there was a panel made up of investors Christina Chen (DN Capital), Christian Nagel (Earlybird), Martin Pfister (HTGF), Jörg Sievert (SAP Ventures) and lawyer Nils Rahlf (Morgan, Lewis & Bockius LLP), moderated by Patrick Polak of Newion Investments.
The panel was discussing whether there was a special recipe for investing successfully, and they finished by each naming the special ingredient(s) they were looking for in a startup.
Christina: In pitches, she is looking less at the what and more at the who, the why and the how. Who is the team? Why are they following their particular idea – is there a gap in the market? And how are the doing it differently from others?
Christian: It’s important how you approach VCs. Many receive a couple of thousand business plans a year, so just writing emails is not going to get you very far. The best ‘in’ is to seek recommendations from others who the VC already knows and trusts.
Martin: The three things an entrepreneur needs to show is that they have a solution to a specific problem, they are responsive when it comes to dealing with investors and that they have courage – because they will need it.
Nils: Speaking as a lawyer rather than an investor, he said it is vital you keep your startup house clean and organised. It is important for investors to see that a company’s legal affairs are in order and straightforward. Additionally, don’t do anything too complicated in early pre-VC funding rounds which might put them off later. And finally, protect your IP.
Jörg: Investors don’t like unusual structures – it is much better to stick to industry standards; something VCs can remember a year later without having to refer to the original paperwork. He also had three top tips: Be passionate, show integrity and know your stuff – if you meet a VC and they more about your market than you do, they will get nervous!