Welcome to StartupRed.io, your podcast and YouTube blog covering the German
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Hello and welcome everybody to StartupRed.io. Today we're diving into the world
of venture capital with Identity VC. Joining us is Till Klein. Hi, Irene.
Hi, Joe. How are you today? Doing good, thank you.
You are the founder and managing partner of Identity VC, a VC firm redefining
investment in early-stage startups.
In 60 seconds, Till, can you share what sparked the idea for Identity VC and
what problem you're most passionate about solving?
Sure, happy to. Yeah, IdentityVC invests in LGBTQ-led companies.
And the thesis behind that is that innovation thrives when we break from the norm.
And for the LGBTQ community, breaking the norm is part of our DNA.
So our thesis is that LGBTQ founders are born to disrupt.
And this is a great untapped opportunity as an investor, full stop.
That's why we do it and what we do.
For our listeners, what's the biggest challenge you think early startups face when securing funding?
Let us know in the comments down here.
Talking a little bit about your journey, your origin, your story, your vision.
Before we got into the recording, we talked, you already had a successful career
before founding IdentityVC, working, for example, with BCG.
What was the catalyst that led you to launch this venture fund?
Yeah, it's kind of, you need to go back to, so I started, actually,
I wanted to work for a bank. When I was at university, I wanted to work for a bank.
But I finished university in 2022. There was no jobs available in banks.
So that's how I ended up with BCG.
I never regretted it. And I had a good time. And I stayed there for more than 12 years.
But I've always focused on financial services.
And at some point when left and right, the fintech wave started,
I saw my clients doing nothing and got a bit frustrated. And so that triggered
me to start my own company, Fintech company.
And so that's also how I met my now co-founder Jochen.
He is a family office investor out of Berlin.
And we both came across an organization called GANGELS in the U.S.
That's initially gay investors who invested into diverse founders.
And I came across them when looking for funding.
Jochen, as an investor, as a co-investor, he did a lot of co-investments with
them. And we asked ourselves kind of, why is there nothing similar in Europe?
And so that was back five, seven years.
And then kind of we didn't find a reason why not.
The only reason is probably nobody did it. So then we were waiting for a while
if somebody does it and nobody did it. And after I closed down my startup,
we then said kind of, let's give it a try.
Now I've got some time. And obviously, it's on us to start that idea in Europe.
That already kind of gets my next question.
Which gaps you saw? It's especially the LBGGQ founders that you are looking
for from our discussion before.
My understanding is that at least one of the members needs to identify as LBGGQ,
but everything else is just a normal startup.
You're also looking at the normal business projects there and stuff.
Absolutely, absolutely. So actually, there was no fun focusing on the LGBTQ
or queer community. It's sometimes easier than the acronyms.
But the opportunity is huge. So we estimate that 18% of the startups do have an LGBTQ co-folder.
And this is even growing, given the fact that in younger generations,
more people are identifying as queer.
So this is a huge untapped opportunity as a VC.
And if you compare that, that's more or less the same size as the fintech market.
So it's a huge, huge opportunity.
You came from BCG, then you tried fintech, and then you started a VC fund.
I think that's quite an interesting journey you have behind you.
But what was the biggest challenge in building a VC firm that stands out in
a very competitive industry?
We do get, I would say, at least once a week mailings from some new fund that
was either raised or completely new VC firm launched.
So it gets more and more competitive, which, by the way, is for Europe a very
good thing, because there's a lot more startups that need funding than there are VCs right now.
But what we say kind of stood out as like the one, two or three top challenges you face there.
Yeah, let's say, kind of, I wouldn't have started if the opportunity wasn't so obvious.
Because honestly, starting a generalist fund in Europe at the moment, I wouldn't do that.
I do not recommend it. But here was really an opportunity that was very obvious
and nobody has taken it yet.
On the other hand.
We also were a bit naive when it came to the fundraising environment and coming
from 2021, 2022, where capital was available easily.
And so we were over optimistic at the end.
So fundraising was just a bigger effort than we thought.
At the end, if I look left and right and how many funds I saw who started earlier
than we and who are now behind us or who have given up.
So I'm pretty satisfied with what we've achieved so far.
But that definitely was in that environment to raise a fund is a tough cookie
coming all with what comes with a fund.
So it's kind of you need to build the organization, you need to build the network, and all that comes.
And all that without having any income, that's also kind of – that's a big structural problem for VC.
And that prevents a lot of, let's say, uncommon people to get into VCs because
at the end, you need to be able to afford it.
And because fundraising takes two years and there's during those two years,
there's no income, but a lot of costs.
So that is kind of so Jochen and I, we are a bit older and so we could afford it.
But that's a big challenge, particularly for younger VCs.
And that prevents probably quite interesting VCs. I would love to see in Europe.
Before we get to my next question, do you have any idea how one could encourage such VCs?
Oh, pretty sure. So honestly, European VC is primarily public funding.
So it depends on the vertical, but overall across all, it's over 30% is public
funding. So that always we need to keep in mind.
And so the question is kind of behind the public funding, what you want to achieve.
And if public funding would be kind of focused on that and would drive new,
for unconventional VCs to come up, that would work because they could put their money there.
They don't do that, to be very honest.
They prefer to throw their money after those who are already big.
But that's a political decision, a wrong decision from my perspective.
But that could change. How that could work, you see, it's about defense tech.
So defense tech was not big. And then there was a lot of public money turned
towards that direction, and that immediately shifted the whole industry in that direction.
So they do have, they could play, given the fact that they are so strong, play an important role.
Unfortunately, when it comes to new VCs and new ideas, they're not really open.
They prefer to sit in the board of the established VCs or on the advisory board.
When you've been talking about starting Identity VC, you talked about you would
not start a general VC fund right now in Europe.
That got me curious. What kind of VC fund would you start right now except for Identity VC?
What kind of VC fund I would start?
I haven't thought about it. Honestly, these kinds of things are very opportunity-driven.
And honestly, if there would not have been the opportunity and there would not
have been Jochen to do that together, I would not have done it, probably.
So it's kind of have the idea, the opportunity, and the team.
And honestly...
And there is none. So I don't think I need to start a second FAT at the moment.
So I'm still busy with the first one. I do believe so.
Let's talk about a little bit of the industry market landscape, the competitive edge.
You are described as investing in startups with a strong market fit and unique identity.
What defines a strong identity in a startup?
A strong why, a strong mission. Why are you doing this?
What's the mission? And founders who really know they want to change something,
they want to build something, except from getting rich, which is not,
from my perspective, a very strong mission, at least kind of in terms of pushing a startup through.
We've been talking about your main investment focus, but there are also,
of course, different industry, different trends. Think about like all the things
we've seen in the past, e-commerce, fintech, quick delivery,
drones, and so on and so forth.
How does IdentityVC position itself in this evolving landscape?
Are you looking on a deal-by-deal basis? Or are you already seeing what could
be the next trend, what could be the next interesting wave of startups?
Lots of buzzwords, which is kind of, yeah, very kind of that characterizes the VC industry.
Kind of there's lots of trends and fashions and then everybody is chasing that.
So typically the most VCs are not very good in risk taking and taking new opportunities,
which doesn't make any sense because that's a job of VC.
But I was I've never understood.
So you want to go for the stuff others don't look at. And honestly,
if you look at the history of VC, that's also how big VC firms grew,
because they took a decision that was against the market.
But so to answer your question, what we do is we are generalists and decide deal by deal.
So we are open for plenty of opportunities.
And so that also comes with a challenge in terms of you need to have the expertise,
you need to have a great network.
But as we have that kind of very narrow focus on kind of what type of founders
we're looking at, we decided,
okay, we need to be a bit broader when it comes to industries and that allows
us to see very, very interesting stuff, particularly for a guy who has a banking
background, which is like very boring,
very kind of always the same, a very simple industry.
And now I have the chance to look at quite exciting startups who have really
impact and can make a big difference to people.
You guys are investing in early stage startups. What would you say is,
especially from the side of
the founders, the biggest misconception about early stage VC investments?
And one thing that jumps to my mind is when they ask me to sign an NDA,
which is like, and that shows there's no lake of ideas. And an idea is worth nothing.
It's all about the execution. I've seen so many ideas that never happened.
And this is quite often you see that from unexperienced founders.
They come and say, can you sign an idea? and this is honestly,
you're just talking about a brainchild and,
there's nothing if you are not able to execute on that, it's worth nothing so
this doesn't make any sense.
So they learned that very fast because no VC would ever sign an NDA at that
stage but it always gives me a smile when they come up and say, can you sign an NDA?
It's like, no I was the same when I started my startup and you were an unexperienced founder.
I did exactly the same.
I see. So we're all learning. Hopefully a lot of future founders listen to this
episode and already learn from the mistakes of others.
I want you to close your eyes and imagine something.
Imagine Identity VC has backed the next generation of unicorns.
What key industry shifts would have made this possible?
I would say it's clearly AI at the moment. It's kind of not industry-specific
that will impact across industry.
That's really like having even a broader impact than Internet had 30 years ago
or 25 years ago. So, no, 30 years.
So, shit.
That reminds me how old I am. But this will have such an impact on so many industries,
starting from financial industry, health, but production.
This will be very fundamental, and we are just at the beginning.
Actually, about being older, just a friend of my wife, she has a girlfriend,
and the kids are teenagers.
And I told them, I'm older than Google. And they said, no way. And I said, yes way.
That is really old Jill we will be back for our audience with your investment
thesis and startup selection deep dive after a short ad break.
Hey guys, welcome back to the interview with Till from Identity VC.
We are now talking about investment thesis and startup selection.
Till, what are the top three criteria that determine whether Identity VC invests in a startup?
We already heard it's not the idea, it's the execution, but what else?
It's pretty clear. There needs to be a real problem. You need to solve a problem for somebody.
Secondly, there needs to be a market and a big enough market.
If there's no demand or nobody is paying for a solution for the problem or it
is too small, it doesn't work.
And thirdly, it needs a great team that executes it on it and solves the problem.
That is great. It seems like you have seen my next question because beyond the
numbers And be honest, in early stage VC investment,
the numbers are not that important here because the real revenues will come in the future.
What are some intangible qualities you look for in a founding team?
That's what I mentioned before. It's kind of mission driven.
I think that's very, very, what's the motivation? Why somebody started the startup?
So I think that's a very, very interesting question to understand the startup.
And why are you so crazy to go through all the pain?
So you need to have a very strong motivation. And second is risk taking.
You need to be willing and able to take crazy risk.
And everybody around you will advise you not to take that risk.
But then you are exactly on the right way.
If everybody is disagreeing with you, go ahead. You are on the right way.
And that combined with a hustler mentality, at the end, it's like there's nothing to delegate.
Hate this, just get, roll your sleeves up and go create results and create them fast.
By the way, mission driven. That made me smile because being rich quickly is not a mission here.
It is. Honestly, that drives some founders. Yes, it does.
This is not a company I would invest in.
Yeah, so the getting rich is all good. And honestly, we're not good in Europe.
So that's kind of for all the pain and all the risk you take,
there needs to be a proper reward.
And that's a big problem in Europe that the reward, particularly not only for
the founder, but kind of for kind of the management team, is not enough.
But that's not enough to build a great company and to solve a real problem.
I was smiling because I found when you have somebody in the team who wants to
get rich quick, he or she takes the earliest possible exit,
during semi-retirement or something that is not the people who really want to
build a unicorn to the end. Um,
How do you balance investing in visionary founders versus proven traction?
I don't balance. 100% vision.
Okay. What role? We talked about this before.
You and your team, obviously, like I do, use AI.
And what role does AI play in your investment decision-making process?
Do you leverage AI to analyze deal flow or market trends?
It would be a lie if we don't. Can we do more?
Honestly, we can do more, more systematically, more do kind of the routine task.
So kind of what, honestly, what in previous times an intern did or so,
that's all stuff that you can do or an assistant that you can do with AI.
At the end, AI is not yet there that it can take an investment decision from
my perspective because AI can do a lot, but it's not intelligent yet.
And I always have the discussion with the team to say kind of this is all good market research.
But honestly, to nail that to the point and draw a conclusion,
a business and really an investment decision, this is missing.
And this is what you cannot yet get out of AI.
That's where the human factor comes in.
I was smiling when you talked about the intern, because if you can describe
a to-do in a way that an intern would get it, you can also delegate it to an AI.
That's a very, very good point.
And honestly, I see that and I've experienced that so often that you get something
and you think, what the fuck is that?
And then you just have to hold your own nose and think, shit,
this is what the briefing I gave. I gave no briefing.
So bullshit in, bullshit out. And that's exactly what's happening in much faster pace.
So you get more faster feedback, but that also happens if you don't give proper
briefing to your team and the more junior they are,
you get non-optimal results.
I see. Let's talk a little bit about business model and growth strategy here.
VC is evolving. How do you see traditional VC models changing over the next five years?
As we already talked, AI will have an impact.
I do believe there's some overvaluation in AI, but we're just at the start of
learning how to really apply it.
And the development is already in the future here.
So how do you see the traditional VC model changing?
First of all, I would challenge your point that VC is evolving.
This is a very conservative industry, which has not much involved over time
and has not much changed.
So it's dominated by white old men and public institutions.
And they are typically not very the change drivers. And so is the industry.
The only shifts we've seen is kind of what I mentioned a bit earlier is kind
of when there was a shift by public funders. Kind of defense tech is a good example.
So they shifted their money. That was like a big boom in one direction.
And everybody is running behind them or following them.
But at the end, if you look at things like women in BC, this is ridiculous what
happened the last 10 years.
If you look at top ranks, the share of women in VC has grown from 2011 to 2021 from 9% to 12.5%.
This is fucking ridiculous. If you project that in the future,
it would take another 107 years to get to parity.
So this fucking industry is not changing at all.
And this is all lip service and kind of we get more diverse. No, you're fucking not.
So you are at a lower double digit number of female and not talking about other
diversity dimensions. But there's, for obvious reasons, more data available.
And that's also true to other stuff. So this industry is ready for disruption as well.
And when you talk about public investors, one should keep in mind that you're
not only talking about the legal entities here involved in Europe,
But also, you should keep in mind that a lot of the big VC funds in the U.S.
Are basically backed by something like the Teachers Retirement Fund of California,
Ontario Pension Fund of Public Employees, or something like that.
You should always keep that in mind.
It's important, but that's a political issue, that in the U.S.
Kind of pension money, and that's the biggest pool of wealth, flows also into VC.
And that's a big problem of Europe that policymakers have not understood that
this is the lever. The only who has understood that is Macron.
Can debate about him, but that's what he did very right.
He forced kind of the insurers to put more money into BC and kind of look at
the numbers that in the meantime, Paris has overtaken Berlin.
That's one of the reasons why. Mm-hmm.
So what's your take? I mean, as a traditional VC, what's your take on alternative
funding models like revenue-based financing or, for example, crowd investing?
We put a lot of hope in crowd investing, but right now it's more a proof of
interest by potential community, by potential audience.
Like a first step to raise venture capital. I've seen it so far.
Yeah, it's good to have some that never took off.
Obviously they're not the solution because what we need is funding below VC
level so we see a lot of great founders with great cases but they're not a VC
case they might become a company that's worth 80,
100 million or 100 million which is fucking successful which is great but it
doesn't work for the math of a VC fund,
This is just kind of you need to really chase for the unicorns.
Otherwise, the math don't work.
So what we do need and what is not yet available is really kind of VC-like money
for kind of this level below VC case.
These 50 to 100 million companies and there's a big gap. and both models you've
mentioned don't solve that.
You're a former consultant, so I can already guess the answer,
but how do you support your portfolio companies beyond just capital?
You mean I throw slides on them?
Yeah, first of all, we can, yeah, I would say as every other top VC,
We can help them with funding, with operating support, with strategic advice.
So Jochen brings an incredible experience in fundraising.
So he himself has invested over $100 million into VC.
At the same time, he is an LP in over 20 funds in the U.S. and in the EU.
So he has top connections and something that...
It's not so common also into the family office world, which is very difficult to get in for founders.
Mari has a very good operating experience. So she was a growth operator,
scaled a company over a double digit in ARR.
You mentioned I have a consulting background and was a founder.
But that's all I would say you could expect from a VC and other VCs have as well.
So what we do have and others don't have is the LGBTQ community.
And so our intention is to help our founders to make the community their unfair advantage.
And this is a super interesting community because it's huge.
It's across borders. It's across hierarchies.
And it's cross-functional silos. So this is a great, great network,
which most owners have not yet properly leveraged and to get access to experts,
to mentors, to corporates.
We have in end of February, we have an event in Amsterdam. I'm super curious how that will work,
kind of connecting LGBTQ founders with companies, with the Pride networks and
the companies, And which is great because typically a company is a black box
for a founder and very difficult to get into this huge black box.
But the pride network in a company could give you a great network already in
the company that might not exactly the right person who is in charge of what you need.
But they're very open to help you, to guide you through the organization.
And this is a huge opportunity.
And our intention is and our mission is also to open that up for our portfolio
companies, but also beyond.
I see. To our listeners, if you were a startup founder, what would be the biggest
challenge in raising VC funding? Let us know.
To you, what do you think is the biggest challenge of startups they face when
scaling, meaning they have the first investment,
they have the first product, and then they want to go big, they want to scale.
What is usually the biggest challenge they face and how do you help them?
It's a very different thing if you're an early stage startup and you are kind
of a bunch of friends, a team, and you do something together.
And it's super easy because you just need to turn around and you speak to another department.
Building an organization, recruiting, building an organization,
building a culture, that's a big challenge and that's a complete different animal.
And that's something you need to be able to. you also need to like.
So for example, I know that's not my kind of thing. That's consulting doesn't work like that.
Also, VC doesn't work like that.
So I like to have high speed, small teams where everybody kind of is in charge.
But to really scale, you need to build structures. You need to build processes.
You need to build a culture that makes these structures work as you want that.
So that's a big challenge. What we can do is we can be a sparring partner.
That's the thing. And this is anyway kind of how I see also value creation to founders.
It's they need to come to us. I don't want to obstruct help.
So they need to come to us and happy to give my opinion.
I've seen a lot of large organizations.
Jochen has seen a lot of startups also growing exactly. and he has exited large startups.
So he has seen what challenge these are. And I would say it's worthwhile talking to us about it.
I see. Let us go a little bit into fundraising and financial sustainability,
especially for the startups.
You've worked closely with early stage startups.
What's a common mistake founders make when pitching a VC?
So it's quite often, but sometimes you have to be too creative when it comes to their pitch deck.
It's like the pitch deck is something that you want to look for.
You look for a certain set of information to do your first screening.
Don't be creative. Just have the information I'm looking for.
If it takes me too long to look for the information and if I'm not able to understand
the product, the market, it's super simple in a few minutes.
Then this is not a good sign.
That does not mean it needs to be professional and also to get across kind of
your branding and the shape that's kind of I'm able to do that.
But sometimes too tactical, too creative decks, just do your homework.
And that's because the first step is very technical in VC.
You see, we see 10, 20 decks per week.
So, screening it, you look for certain information, you take a decision,
do we want to talk to that team or don't we want to talk to that team?
If it takes us too long to figure that out, it's a default no.
I see. You've been talking basically about keeping your first pitch deck boring,
but what was the stand-up pitch you've received that really struck you? So far, none.
I've seen good pitches, yeah, but there was not the – I'm still waiting for
the real moonshot pitch that blows me away.
They were all, like, better or worse, but there was none that's,
like, completely thrown me away.
Great. We'll be back with team and leadership after a short ad break.
Hey, guys. Thanks for staying on. I'm talking with Till in, I think,
more than 35 minutes already here in the recording.
We are talking about now, Till from IdentityVC, I have to say,
and we're talking now about team and leadership.
I would be curious what one leadership
lesson is you learned while running IdentityVC, not BCT, not FinTech.
I i'm probably the the wrong person
to ask i'm a really bad leader so
if you you know this this linkedin things kind of good and bad leadership and
then there's this bad leadership that's all me so i would say um i i'm not a
role model here and i'm also too too old to to change uh fundamental things here.
You always learn, but I would not say that my leadership style is a role model.
I see. So then quickly shift into the culture.
What would you say are core values that define the culture at your company?
What sticks out is to be a super entrepreneurial, and that's kind of also what aligns Jochen and me.
We are very different in terms of how we work, But we are super aligned on the
mission, but also on the values, what we accept.
And part of that is entrepreneurial. Do new opportunities.
So I'm a big fan of don't ask for permission, ask for forgiveness,
just do it. Only result count.
And what I often come across in that industry is that they tell,
yeah, but others do it like that.
I don't care about how the bullshit others do. That's not an excuse not to do
it better or to do it right.
And I hope that's also a bit of the culture we have at Identity VC.
We not just, and that's what you see quite often in VC, just copy the bullshit
that the whole industry does. We do things differently.
Yeah, I see this in the news, of course, always the trends.
Yeah, you have like three, four big investment in one area within a month because
they heard, hey, they do it.
Yeah, we also had a startup pitching. Let's do also that.
We've been talking before about the leadership and the team.
And how do you assess whether a founding team is resilient enough to navigate
the startup challenges?
It's a very good example for what we just discussed, because that's what we do very differently.
We do BCG McKinsey-style case interviews with the team.
So once we've done all our homework, so we looked at the market,
we've gone through all the Excel sheets and talked to the founders quite often about the company.
Then we invite the team to us. They come to Berlin. Then, first of all,
we have a dinner together, not
to talk about the company, just to meet the team. What are the hobbies?
What's the background? To meet the person behind, because at the end you invest in the person.
And secondly, the next day we do interviews and case interviews.
And this is nothing you can prepare for. That's really kind of real.
We take real life examples, put them in front of the founders and see how they would solve it.
And what we want to get out of that here is kind of how ready they are to take risk.
Do they have a bias for speed and for results? All the capabilities we spoke
earlier about to figure that out.
And that works super well because founders stop,
try to sell their company because they just kind of, you confront them with
a question they will come across anyway in the future and see how they react.
And this is turned out to be a fantastic way how to evaluate founders.
So this is something I took from my BCG time with me and brought it to BC.
Interestingly, I haven't seen any other VC who does it, although it's very obvious.
Let's talk a little bit about regulatory and societal impact.
Do you see regulatory trends affecting VC investment strategies in the coming years?
Regulatory one, very much so, of course. There's a lot. But I would say kind
of it's more political, even though kind of one level up, because we are at a turning point.
Trump has terminated kind of the social contract between nations.
So if you think based on the Swiss philosopher Jean-Jacques Rousseau,
his idea of having a social contract that...
People agree on rules to gain more freedom.
And that's kind of how society works.
That's how a state works. And
since World War II, we had that also on an international level, kind of.
You agree on common rules, and that gives everybody, all nations,
more freedom. That is changing.
Trump is somebody who said, I don't accept the rules anymore.
So he stopped playing by the rule. And immediately, we are back to what Thomas
Hobbes described as man is a wolf to other men.
And so, I don't know if that translates to German, but the car is getting reshuffled here.
And that will have huge impact on many industries, on the society,
and with that also on the VC industry.
I do believe it will also have an indirect impact on the European startup scene
made before the VCs from the US directly investing in European startups,
as well as the LPs investing in European-based funds.
Absolutely. Absolutely. Because you see that will reshuffle what was common
practice for a while and it will stop trends and reverse trends.
And so I don't know if we get to a new level of rules,
but first of all, there is somebody who just breaks the common practice,
and that will definitely have a huge impact.
And I don't know what the impact is, because let's see, and that also depends
very much on how the European Union and Europe reacts to that.
And I think that's very hard to predict at the moment.
I do believe it's also important to see he's breaking the rules.
If he can do it, other leaders will also try to do it. And then they'll figure
out a degree to which they can do.
And that at one point hopefully may establish some new rules,
maybe even some better rules. Yeah, exactly.
Yeah, exactly. Kind of, honestly, in general, it's not bad kind of to shake
up a bit and to disrupt a bit.
But kind of, if you give out fundamental rules, all others don't feel bound to the rules anymore.
Um, and, uh, so this is kind of, you're leaving an equilibrium and you need
to find a new equilibrium and, uh, that could be very, very painful.
Uh, the path to that, I guess, or there will be one, if it's better or not, let's see, let's hope.
Um, and the key question is how long will it take to, to get to that, uh, equilibrium?
Yes. And it doesn't have to be optimal for everybody else. Everybody knows who
knows a junk cash equilibrium that basically doesn't have to be optimal for either side.
But getting off our soapbox here again, going back to VC investment,
what industries do you think are the most in need of venture capital support
but are often overlooked?
Typically, what I was referring to before, VC has a hurt mentality.
So they're all moving in one direction or the other direction.
And typically, this is overemphasizing one thing or the other.
We're all in consumer. No, they don't like consumer anymore.
They are all in B2B SaaS, which is also bullshit. So because there is opportunity
or interesting opportunities in all industries.
But there's industries I think they're super interesting and I don't see them as I would expect it.
It's, for example, assistive technology.
So technology that helps disabled people.
Because in my mind that would be kind of if kind of you have kind of a disadvantage,
wouldn't it be great if you have technology that kind of jumps in and kind of
replaces the disadvantage so that you are at par again?
And probably it has to do with the market and how it's paid for that,
but that could be a great opportunity. and a great impact for people.
And I also guess, though, great economically, also interesting one because it would solve.
A big challenge and an unsolved problem. Talking about problems here,
I'm sure you encountered a lot of them in the past and you learned some lessons from this as well.
I'm talking about the lessons for future entrepreneurs here.
You know, the typical question is what piece of advice you wish you had received
before starting Identity VC?
I remember from the start of our interview, like almost 40 minutes ago,
that you've been talking how long it takes to raise funding. Yeah.
One thing is like, forget about institutional investors as an emerging manager.
We've wasted some time on the institutionals before I learned, forget about them.
They're not committing to emerging managers. Very, very rare cases.
You need to raise your first or second fund. you raise on high-network individuals and family offices.
That's known, and others have the same experience.
It would have been good if I would have known that before. Then that would have saved us some time.
I see, I see. Talking about a common misconception of founders about raising
venture capital, for me,
In the beginning, it is that every VC invests in every company.
There are certain focus groups like yours. There are certain industries.
Plus, there are also stages like early stage, late stage, pre-IPO, and so on and so forth.
By the way, guys, if any of these terms didn't tell you anything and you're
about to raise venture capital, maybe you should talk to JetGPT here or do your homework.
Any other misconception that strike you?
First of all, adding to the homework before you contact the VC,
go to the webpage and check what they do.
Yeah, so sometimes it's like crazy that people do not do the three-second check,
and what do they do, what do they invest in, and everybody has it on the website,
and then they contact you.
That's a waste of time for both of us. And in terms of misconception,
I would say it's a distribution of power.
And many startups or most startups feel kind of there is kind of the VCs have
much more power and they completely underestimate how big the challenge for
VCs is also to allocate their money and to deploy their money.
And so this is much more at eye level than than many, many founders think.
And VCs are desperately looking for investment opportunities and they have to
do a lot to find good companies.
And if you don't get money from a VC or from many VCs, I would kind of need
to rethink your business model or the way you present it.
It's not the lake of capital. There's more capital than is needed out there.
So be aware that VCs kind of also need to kind of pitch you and want to.
If you don't get money, don't use that as an excuse.
Then maybe you obviously did something wrong or something is wrong with your
model or you cannot get that across.
Or all VCs are wrong, which I would also could be.
That also happens. But first, I would look what I can rethink my business model
or the way I present before I would assume that all VCs are wrong.
What's the hardest tip for first-time founder about securing their first VC
check? What would they need as advice?
Be more relaxed. Be aware of the imbalance of power you just described.
Yeah, that's more the attitude, how you go into it. But at the end is kind of what you optimize for.
I did the mistake brutally, kind of don't optimize for valuation,
optimize for personal fit.
It's kind of, this is a one night stand you cannot get out of.
This is a marriage for 10 years and they are on your cup table.
So really, really also do your due diligence and think about, can I work with this?
Typically, it's a person who represents the firm and kind of is a direct contact
over that firm for the next five, six, seven, eight years.
And always keep in mind this one TechCrunch article that I have in mind,
which kind of emphasizes a very important point. more startups have been killed
by the investors than actually their competition.
Interesting point of view. I haven't thought about that.
I don't know that article, but it resonates. Yeah, it resonates.
Now let's go into the closing and looking a little bit ahead,
the future of Identity VC.
What is your long-term vision for the company?
It's clearly being the European leader in LGBTQ and diversity funding.
That's one dimension. The other dimension is to create and be the catalyst for
a strong European LGBTQ startup community.
That's not there. It's a little bit in the UK. We have that.
We see that, how that could work in the US. There's organizations like Ganges, like Stardark.
In Europe, there's still a lot of room to really integrate founders,
investors across Europe.
What are you most excited about the next 12 months except the publication of
this interview? Along the different dimensions.
So this year, we have around eight more new investments we want to make.
So this is very exciting and a lot of work, but this is always great to invest
and have a new company in the portfolio.
So also founders, if you're looking for LGBTQ founders, if you're looking for capital, contact us.
And then secondly is we want to do the final closing of the fund in the foreseen future.
And we have a lot of things on the agenda around the community and what we want
to achieve and what we want to do.
So this was the very short version and just the highlights.
So we have a very long list, probably more than we can do, but if we achieve
part of it, that would be great. Awesome.
Last final questions. How can people reach you? We'll link down here in the
show notes your LinkedIn profile.
Is this a good way to make a first contact?
LinkedIn, email. Honestly, I'm not a friend of asking for warm intros.
This is kind of a big problem of the industry, kind of that shows we only want
to invest in the friends of my friends.
And that's one reason why this industry is not so diverse.
And that's kind of same universities, same background, whatever.
We want to see founders who were not part of that communities and who others might not have seen.
So you can find my email on our web page. You can contact me via LinkedIn.
And please do me one favor. If I don't answer at the first time,
just write a second time.
Sometimes things get lost. Sorry for that.
I have the standard receipt check since I had a random idea during the interview
with Alex from Frankenberg, at the time CEO of Hitech Krümerfonds.
I asked him, he also sent me an email, and I asked him, would you reply to an
email that only says, yo, we should talk? Would I reply?
I don't know. I don't know. It depends. I would say one more keyword would help
or a LinkedIn profile or one trigger and that's.
Maybe I would, because this is very rare.
I don't reply to emails that are not personally addressed to me,
and there's more than you think.
This is hi, comma, blah, blah, blah.
And you can see that was a mass email. This one is immediately delete.
I see. Also, that would be a good way for people looking to work with Identity
VC as part of your staff. Best thing is follow us on LinkedIn.
That's anyway a good recommendation. Then you're up to date what we invest in,
what events we do. Kind of we do a lot of community events.
So we have upcoming events across Europe and also job posts.
So I would say that's probably the best thing. Follow us on LinkedIn.
Great. Till, that has been a fantastic conversation.
I loved it. Thank you very much. And to our listeners, what's a question?
You would like to ask Till about Venture Capital. Drop your questions down here in the show notes.
Till, thank you very much. It was a pleasure. Thank you. Pleasure was mine. Thanks for having me.
And talk soon. Talk soon. Bye-bye. Bye.
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