Very early stage investments — what are the opportunities?
From an investor’s point of view, the early entry and the broad diversification in the portfolio offer the potential for very attractive increases in value. We typically get in before all other investors. — We invest very systematically in young companies as soon as they are founded — we talk about “day zero”. This phase is otherwise not systematically addressed by institutional investors. Early-stage investors typically only start when the first product is on the market and the first customers have been found.
At Antler, we deliberately start working with exciting founders even before they set up their next company. We now receive more than 120,000 applications a year from founders who want to work with us. This includes complete founding teams that are already working on their first product as well as individual founders who are looking for complementary co-founders — i.e. partners with different backgrounds who complement their strengths.
We generally work with founders for a few months in one of our offices — only then do we decide on initial investments. We now have 30 offices around the world so that we can work as closely as possible with these founders during the start-up phase. In Europe alone, we invested in 130 new companies last year and supported over 120 follow-up financing rounds in our portfolio.
We are available as a financing partner for our portfolio companies up to their Series C stage and can invest tens of millions over several rounds alongside other strong investors. In order to make the best decisions on day zero, we usually invest in teams that are extremely strong, tackle big problems and take a technologically innovative approach.
For us, the largest sectors in Europe include climatetech, fintech and healthtech. However, we look very specifically for founders who have in-depth knowledge and strong hypotheses in an important problem area — we are often surprised by the ideas ourselves. The portfolio includes both hardware and software companies, with the majority of the portfolio consisting of B2B companies from a wide range of sectors.
Drive, Grit and Spike! — We are looking for teams that address large and typically fast-growing markets and develop scalable products and business models based on technology. The key question is always whether the opportunity is big enough to build one or potentially several very large companies in this area.
Drive describes the motivation and, in a positive sense, the drive of founders. Building a company from scratch is a big task — especially when it comes to developing new technologies and serving global markets. Strong teams think big, they tackle unsolved problems and are often more motivated by this than by the pure enthusiasm to build a large company. They often have a deep passion for solving the problem they are tackling.
Grit describes the ability to grit your teeth and carry on in difficult times. The journey of a founding team is always rocky, you are confronted with many rejections — it often takes dozens of conversations before the first customer or investor is converted.
Spike describes both the individual strength of each member of the founding team and the collective strength — being better than the competition. The question we ask ourselves is whether the founding team can be one of the best teams in this field. Only if there is a conviction that a team can prevail against the (future) competition are there high chances of success.
We can initially continue to invest in our portfolio ourselves from two fund strategies up to a Series C, i.e. over the first approx. 5 financing rounds. In our experience, this is a very strong value proposition for both our investors and founding teams. We also work closely with the strong VC investors in the ecosystem. These are VCs as well as business angels, family offices and, in later phases, corporate investors.
As we generally do not lead the following financing rounds, we are complementary to the co-investors in the ecosystem. A close partnership leads to more attractive deal flow.
The financing environment in the early stages — such as pre-seed, seed and in some cases Series A — remains intact in the current market environment. Further new investments are being made in technology, especially as the exit horizon for early-stage investors is usually >7 years. However, the market is acting much more prudently today than 2 years ago. Due diligence processes are carried out properly and decisions are based more on facts. The round sizes and valuations here are quite stable and show a strong belief that innovative tech companies are no less important today than they were 2 years ago.
In the later phase, particularly from Series B onwards, the players continue to be very cautious. However, most of our portfolio, particularly in Europe, is still well ahead of this phase, so we and our portfolio are much less affected here.
About Christoph Klink
Christoph Klink is a partner at Antler, based in Germany. Antler is the world’s leading day-zero investor and one of the most active early-stage VC firms in Europe. He is responsible for Antler’s investments throughout Central Europe. Since the launch of the first residency for founders in Berlin in 2021, Antler has made more than 50 investments in tech startups covering multiple sectors such as climate, finance and healthcare technology. Many of these start-ups are now regarded as the most promising start-ups in the DACH region, including NeoCarbon, clare&me and Tapline.
In the last two years, Christoph has held residencies for more than 500 founders in Berlin, Amsterdam and Munich. Antler is specifically designed to remove the barriers to entrepreneurship and support a new generation of tech founders. The founders who took part in the residencies came from 53 different countries, and 35% of the startups had at least one female founder.
Christoph is considered one of the leading experts on early-stage investment trends in Germany and recently co-authored a report on the demographics of unicorn founders in the DACH region.
Before joining Antler, Christoph was a partner at McKinsey. For more than ten years, he held leadership positions in McKinsey’s Strategy and Corporate Finance Practice & the Advanced Industries as well as in its Logistics and Infrastructure Sector Practices.