Venture capital reaches new heights
“The investment environment is very good: there are attractive investment opportunities, valuations are low, more and more experienced teams to build successful companies can be found in the market. The general economic environment is extremely good, especially in Germany. Those who currently have capital to invest have really attractive conditions ahead of them. The biggest challenge by far remains fundraising.”
“The No. 1 challenge continues to be fundraising. Investors are very hesitant in deciding who to put their trust in. A clearly differentiated investment strategy is a minimum requirement and investors want to see the extent to which managers have the appropriate tools and know-how to successfully execute their differentiated strategy. Investors take the time to analyze this closely and evaluate it in parallel with performance data. Since the hurdles for successful fundraising are already very high for established teams, it seems reasonable to assume that the challenge to close a fund is even greater for first time teams. — The best opportunity for a First Time Team is to first identify a portfolio and seek investors for it very specifically.”
“Cash is King — a business ultimately exists to generate positive cash flows. Some founders forget this when developing their business plan. The structure and development of the company must be geared towards scalable positive cash flows. Then a company can be financed. It is also very helpful to approach investors in a very targeted way. Not every VC is a good fit for every company seeking funding, and it doesn’t make the chance of success any greater if you approach a biotech investor with a cleantech investment case.”