Rheingau Founders in conflict with its own backers

Berlin — The start-up inves­tor Rhein­gau Foun­ders is in a tangi­ble conflict with its own backers. As repor­ted by the busi­ness maga­zine ‘Capi­tal’ (issue 11/2019, EVT Octo­ber 24), one of them is the venture capi­ta­list Born2Grow, which is finan­ced by Lidl foun­der Dieter Schwarz. Seve­ral inves­tors are conside­ring lawsuits. Born2Grow is also nego­tia­ting a complete exit and sale of its invest­ments. The dispute was sparked by fund fees that Rhein­gau Foun­ders deman­ded from its financiers.

The foun­ders of the startup fund had come into money in 2014 through an early invest­ment in food deli­very service Lieferando. They then began to build their own compa­nies and formed an inves­tors’ club. In addi­tion to Born2Grow, the members include entre­pre­neurs such as Corne­lius Boersch and the Mende family from Karlsruhe.

A dispute arose as early as a year ago when Rhein­gau Foun­ders char­ged its inves­tors for start-up invest­ment costs, such as tax advi­sors and audi­tors. What was unusual was that the fund also clai­med costs retroac­tively — in some cases for a period of five years. Born2Grow, for exam­ple, was to pay a quar­ter of a million euros in fees. Some inves­tors ‘Capi­tal’ spoke to refu­sed to pay. The reason given: The suddenly accruing claims were too high and in part alre­ady time-barred.

Rhein­gau Foun­ders part­ners Phil­ipp Hart­mann and Tobias Johann, on the other hand, call Born2Grow’s beha­vior “unpro­fes­sio­nal.” The costs had been fixed in the contracts. Born2Grow had alre­ady taken the Berlin foun­ders to court at the time. Before a verdict was reached, the parties reached an out-of-court sett­le­ment. Now, new lawsuits could be on the horizon.

There are further points of conflict between inves­tors and the start-up fund: Seve­ral Rhein­gau inves­tors complain that they have been inade­qua­tely infor­med about the busi­ness deve­lo­p­ment of their start-up invest­ments. One inves­tor even got into trou­ble with the tax office because docu­ments were miss­ing. Rhein­gau Foun­ders dispu­tes this, saying the fund has always “fully complied” with all report­ing requirements.