Venturepreneurs'

Our last summit took place a few days ago.

This time we chose a special location a bit outside of Barcelona: AC Beach Hotel in Gava Mar and Beach Club Tropical. Around 20 Venturepreneurs came together during two days for knowledge and experience exchange surrounded by a relaxing atmosphere close to the beach.

To kick off the Venturepreneur Summit, the Venturepreneurs gathered for an experience sharing session with successful Barcelona based entrepreneurs from the tech incubator Seedrocket.

We were honored to have Ken Morse with us, Founding Managing Director of the MIT Entrepreneurship in Center in Boston, who held a great and insightful keynote presentation about Entrepreneurship.

On May 10th the Spanish Newspaper “La Expansion” released the following article and we'd like to share our free English translation with you.

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Every member invests between 25.000 and 250.000 into each project. At the next summit two new Venturepreneurs will be welcomed to the Organization: Marek Fodor (Atrápalo) and Heiko Rauch (Zanox).

Catalan economic history books always emphasize the entrepreneurial character of this region. Recently it’s been enriched by a new movement of young foreign entrepreneurs who left their successful projects in other European capitals to move to Barcelona.

One case is Christopher Pommerening, originally from Hamburg (Germany) who created various Internet portals  until when, in 2004, he allied with Philipp Schroder (also German),  Ricard Soderberg (Swedish) and  Blair McLaren (Scottish). These four are forming the management team of Active Venture Partners, a management company of the risk capital branch of the Molins family, owner of Cementos Molins.

In 2007, the Active Venture Partners initiated the creation of the Venturepreneurs’ Organization, a network of international investors with headquarter in Barcelona.  Next to Active other supporters of this initiative are Didac Lee, Catalán with Chinese roots who founded Inspirit – with the Carulla family, owner of Agrolimen, as partner – and Carlos Muñoz, founder of the first Spanish low cost airline Vueling.

Venturepreneurs’ Organization, a non-profit organization which comprises more than 30 investors, is a special red of business angels. “We contribute with entrepreneurial experience, knowledge in distinct sectors, contacts and knowledge of international markets, meaning all the attributes and entrepreneur needs”. This is how Christopher Pommerening explains the leading motive of the Venturepreneurs’.

Gatherings
Other members of the organization are Rodolfo Carpintier (Netjuice), Albert Armengol (eConozco) and Jesús Encinar (Idealista.com).

Twice a year they come together for a Summit where they share new potential investment opportunities. Every member of the organization decides individually where and how much he/she invests as the entity as such does not form part of any investment activity in a company.  The amounts of investment range from 25.000 to 250.000€. The average investment amount is around 100.000€. The members of the organization take minority participations in the first rounds during the Start-Up phase.

Until today, the Venturepreneurs’ have invested in around 200 projects.  Just mentioning a few of the funded projects Bloguzz, Genoom, Linqia, 3scale o Garmz.

The upcoming summit will be held from 20th to 22nd May in Gavá Mar (Baix de Llobregat).  Then it is expected that two new Venturepreneurs will join the organization: Marek Fodor, co-founder of the leisure and travel portal Atrápalo, and Heiko Rauch, creator of the online marketing company Zanox.

What do the members of the Venturepreneurs Organization have in common? All share the same mission: “Create one European ecosystem for investment activity into companies in their seed stage.”, comments Christopher Pommerening. At the same time the Catalan capital provides all the necessary conditions to become a hub for entrepreneurs.

The investors not only contribute money to the companies they support, but also their experience and network of contacts. Further their profiles are filled with international references, which contributes added value to the projects. This means the companies start off by already paying attention to international markets.

This blog post has been shared with us by Eneko Knoerr, one of our fellow venturepreneurs from Bilbao, Thanks a lot for sharing your thoughts, Eneko!

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When I was young, I remember the habitual conversations we had amongst our friends returning home after a night out. We had not caught what we wanted, wondering what was happening  in town and where we could find girls to flirt with. I'm sure that, like us, there were groups of girls who returned  home also complaining about not having eaten any donut. Supply and demand had not met each other. And each party was "mourning" on his or her side ...

Speaking between entrepreneurs, it’s habitual to comment that there are no investors, there’s no money for projects, that all is a disaster and so on. Come on, there's no way to "catch"-money, in this case.

But the funny thing is that when I talk to investors, I often hear that there are no projects and they complain that they don't find any projects to invest. They don't find any entrepreneurs even though they are searching.

Just like in the world of flirting: supply and demand is desperately looking for each other but there is no way they find each other.

From my position as an entrepreneur and investor, the truth is that I understand the comments from both sides:

- The Entrepreneurs. Many times we feel lost. We don’t know whom to approach, where to begin, which type of investor would be a good match for us … In the Internet space there are a some very active business angels that come to our mind but the possibilities are scarce (or they seem). We think (sometimes with good reason) that the public risk capital remains discarded because they won’t understand our project. We heard about the people who were looking for financing for months without any success. Of course I’ve also seen those who complain about not receiving any investment and it turns out they’ve never sent their project to any place (yes they might have composed something "presentable" …). The sensation is clear: there are no investors.

-The inversor. Some receive very few projects. Others receive proposals from sectors which they don’t invest in. There's the one who finds powerpoints valued for several million euros. And it’s common to see entrepreneurs who know only a little about the business they plan to get in. After all, between small entrepreneurial movements and little amount of projects, as investors we say that there are no entrepreneurs.

Who’s right? The Truth is both. In future posts we will see how we can set and end to this incomprehensible situation.

How do you see this? Are there no investors? Are good projects missing? Leave your comment here!

Our fellow Venturepreneur Markus Wagner has great news to share: The transaction of the world’s leading online people search service!

His incubator i5invest and Austrian venture capital firm Gamma Capital Partners successfully sold one of their portfolio companies: The French PagesJaunes Group has acquired a 100% stake in 123people. "We've started 123people just 30 months ago beginning from scratch. 123people is a great success story for everybody involved. The founding team, venture partners, business partners, the new shareholder and last but not least the internet users profit by the leading realtime internet people search. The success of 123people proofs once again, how effective the i5invest setup works", i5invest partners Markus Wagner and Stefan Kalteis state.
 
123people was founded two years ago, and with currently 40 Million Unique Visitors per month, ranks as the world’s leading provider of name-related vertical search on the Web. "PagesJaunes Groupe, as the new owner of the company, brings in substantial online-expertise for 123people. Synergies between a renowned and leading directory service and a company, which is considered optimizing people search on the Internet, are obvious.“, says Markus Wagner, founder and CEO of i5invest.

„Once again a leading and global company has been established with Austrian Venture Capital. The acquisition by PagesJaunes Groupe has positive effects for all stakeholders involved: the founders are being rewarded for their initial phase of building the company, jobs in Austria are being secured and widened and Investors happily profit from a 200% return per year“, says Klaus Matzka, who lead the transaction on behalf of GCP gamma capital partners, about the successful trade-sale of the company.123people was founded with strong support of i5invest and has been financially backed by Gamma Capital Partners.

„PagesJaunes Groupe’s involvment truly enriches Austria as an IT and Web location. I5invest’s vast international network of individuals and companies has yet again proven it’s viability and success.“
 
Within two years to global player: 123people
After its relaunch in 2008, 123people quickly became a synonym for people search on the web and global brand. Under the leadership of CEO Russell E. Perry and an experienced management team headed by Iris Pittl and Martin Stemeseder 123people currently reaches 40 Million people (unique visitors) with eleven localized country sites (Germany, Austria, Switzerland, France, Italy, Spain, United Kingdom, Netherlands, Sweden, USA and Canada). At every request more than 200 data sources are being pulled into the service, whereas a majority of them is location-specific, and is thereafter being displayed in a structured way on the Web. Since its incorporation in 2008, 123people continuously grows both revenues and profits.

i5invest GmbH operates offices in New York, Vienna and Salzburg and is a „Startup factory“ for Web and Mobile companies. With a team of internationally trained and experienced entrepreneurs and a vas network in New York, Silicon Valley and Europe, i5invest acts as Incubator for tomorrows’ Online and Mobile businesses. I5invest’s current portfolio on companies consists of Online travel guide tripwolf, Coupon platform DealHamster, social yellow pages startup Tupalo and mobile App company Adaffix. Furthermore the company is shareholder in Online gaming world Papermint and supports both the leading gaming provider Xendex and Augmented Reality startup Mobilizy.

About GCP gamma capital partners AG
GCP gamma capital partners AG is a leading Venture Capital (VC) investor with offices in Vienna, Munich and Bratislava. GCP provides equity und mezzanine capital to technology-driven startups and family-led growth companies. Investors are leading austrian and international financial institutions, private investors and renowned foundations. GCP’s current portfolio is built of more then a dozen dynamic technology growth companies, for example the RFID holding Indentec, the game commerce platform fatfoogoo, the med-tech company Pantec Biosolutions, the wastewater treatment company Organica, the agro-generics holding GAT Microencapsulation or the industrial biotechnology business Eucodis.


Thank you for sharing, Markus!

IE Business School invited for a one day conference to bring together European Entrepreneurs and Venture Capitalists to assess the current entrepreneurial situation and access to capital in Europe.

The IE Business School campus is based at an old convent and we were invited to the most unique location you could imagine: An old medieval church where Queen Isabel I used to pray for Christopher Columbus’ return.

Thanks to the organizer Gary Stewart, co-founder of nuroa and new Managing Director of the Venture Lab of the IE Business School, a good number of interesting internationally focused Entrepreneurs, Venture Capitalists and 400 MBA students were brought together.

The Entrepreneurs

Juan Pablo Julia, founder and owner of Axel Hotels, created the world’s most successful hotel chain for hetero-friendly gay hotels in Barcelona, Buenos Aires and Berlin. He mentioned that one of his most difficult challenges was and still is to take the company from a first entrepreneurial stage to a real well-structured company with qualified management team (he employs 120 people worldwide).

Venturepreneur Albert Armengol and founder of eConozco, Spain's first online business network which was acquired by Xing in 2007. Later on he co-founded and invested in several pure internet start-ups participating as Business Angel and Venturepreneur. He actually is a graduated medical doctor with a passion for Internet technology so he created Doctoralia, the world’s leading doctor and medical search engine. He says the great thing about Internet companies is that they permit you to start off without investing a lot of money at the beginning and you can quickly change paths if things are not working or need to be adapted to the market.

Gary Stewart, before starting nuroa he came to Europe as a Yale graduate and first worked as a lawyer. In his particular situation of being a foreigner abroad, he very soon realized the only way to control his own destiny would mean being his own boss and creating a life within is control. Thus together with Oriol Blasco he co-founded nuroa (vertical real-estate search engine). The entrepreneurs shared a few lessons they learnt throughout their entrepreneurial activities:

1. Fighting insecurity: As an entrepreneur you need to find your own way to gain your strength. Juan Pablo recommends "meditation, yoga or go running every day at 6am in the morning".
2. Be creative – as an entrepreneur you NEED to find a solution for difficult situations. There’s no one to turn to and to ask when you are in a difficult situation. Be creative and think out of the box.
3. Be persistant, perserverant - There are many difficult situations ahead of you - be prepared to fight them!
4. Test the concept first and make sure that it works before you start approaching any investors.
5. Do your homework - It’s essential for entrepreneurs to do their homework: Do market research and be aware who your customers are and what they really need.
6. Value of networking – Go to events, go to conferences, connect with other entrepreneurs and potential investors. Always keep the lines of communication open as there might be an opportunity coming up in the future.
7. The importance of money – If you want to bring an idea, to an opportunity and to a company you will need money to grow. For each step you'll need more you will need to give up parts of your control. Ask yourself what your motivations are? Do you prefer control or money and growth?
8. Values of the team – Make sure you have people on board who are better than you in certain areas. “Better an A Team with a B idea, than a B Team with an A idea”.
9. Sense of the market – Make sure you know who your target is. The key is to adapt the vision in your head to what the market really needs.
10. Passion- is even more important than the vision. Your passion will always help you overcome your difficulties.

The Investors

In Europe we don't have the same history of success like in the US. The US have strong success cases like Sequoia Capital boosting companies like Apple or YouTube. Europe only has a few comparable growth cases like Skype for example. Europe is much more dispersed than the US. Everyone is creating their own little ecosystems but none is reaching the power that Silicon Valley has. In order to find answers to the current situation in Europe and how it affects entrepreneurs raising funds, the following VC’s painted a picture of the current VC market:

Jan Borgstädt from Bertelsmann Digital Media Investments (BDMI). BDMI is the venture capital arm of Bertelsmann AG, a leading global media company based out of Germany. They invest into start-ups in the sector of online content distribution (advertising, online payment solution, mobile technology). With consolidated revenues of over €17 billion (U.S. $25 billion), Bertelsmann AG is an international media company encompassing television (RTL Group), book publishing (Random House), magazine publishing (Gruner + Jahr), media services (Arvato) and media clubs (Direct Group) in more than 50 countries. Being an Entrepreneur himself,

Creator of Venturepreneurs Organization, Christopher Pommerening presented in his role as Co-Founder and Partner of Active Venture Partners. Active is a Spanish based early & expansion stage fund which invests primarily in technology related businesses. They've completed 9 investments and invest between 0,5 – 4 Mio €. He created the Venturepreneurs' organization – an organization for serial entrepreneurs who also act as venture investors. His advice to any entrepreneur is: If you act according to your passion you will find the skills and the money – not the other way round.

Olivier Tardieu, Senior Analyst at Van den Ende & Deitmer, a Dutch €150 mio fund. The fund was created by Joop van den Ende and Hubert Deitmers who sold their shares of Endemol, World leader TV production company of famous shows like “Big Brother”. They invest between 3-8 Mio € into entrepreneurial mature start ups with a geographic focus in Benelux, France, Spain and UK.

Patrick Raibaut is co-founder and Partner at Debaeque Venture Capital. His investment interests include online and mobile services as well as media investments. Even though the crisis has hit many companies hard he says there’s still enough money, more resources and a lot of talent out there. So it’s the right time to start your company now.

Xavier Lazarus, Partner of Elaia Partners, is heading up a French VC Fund of €75 million investing into Spanish and French Start Ups. They have 18 investments completed and on average they invest between 1 and 4 million. According to Xavier, the effect that the 2008 crisis had on VCs was that the money flow completely disappeared. They made only two investments in 2009 and are now slowly starting to invest more again which means there's light at the end of the tunnel.

Joaquin Alexandre Ruiz Tarré manages a Spanish Technology Fund from theEuropean Investment Fund. The European Investment Fund is an institutional investor in the VC asset class. They have 300 VC funds under their management. In his eyes the crisis has affected the VC sector in that way that it was obviously much more difficult to raise money. Nevertheless some VC’s have managed to do a first closing which shows confidence that little by little the industry is coming back now. Therefore the requirements have also changed: Whilst before the crisis most VC’s already wanted to see the Business Models to start working, they've become even more pickier “show me how you make money first and then I think about investing into your company”. He calls these the best vintage years and is confident that by the end of 2010 we will see a reactivation of the investment activity. If you think about raising capital, keep these questions in mind if you plan to approach any VC's:

1. Does your business scale? Make sure you build a business – not only a solution. VC’s will only invest in businesses that scale.
2. Does your company actually fit in the VC’s focus area? If they only invest into technology there’s no need to present them a fashion product.
3. Are you really solving a problem? Make sure the VC will understand the solution you're presenting and how it makes money.
4. Is it the right time to market? Is the market ready for your product?
5. How big is your market? Is the market large enough where the customers really have money to spend? Is the market scalable?
6. Do you have the “flame of passion” in your eyes? In the end they invest in you as a person and in your team. They'll only do that if you're dedicated to the project 100%.
7. Do you know the pitch of your company? Be prepared anywhere anytime to explain what you do within 60 seconds. You never know who comes along if you don't expect it.

Since 2008 we are hosting several Venturepreneur Summit throughout the year. We meet twice for one weekend in Barcelona to share experience and to talk about our Needs to find the most efficient ways to help each other.

During these conversation many learnings occur so that we decided to create this blog. We'll share with you the latest happenings in the entrepreneurial and investment scene!