Interview
Portfolio ventures that are going great need almost no support, and the ones that are in the bottom aren’t worth helping. Apart from the two extremes, what do you do about the ones somewhere in the middle? How do you decide how much effort to put into them?
Creating a company is a marathon and not a sprint, so companies who are struggling need help to get out of the dark zone. We provide experts who can help the founders with looking themselves in the mirror to get to the bottom of the reason why it is failing. If they still want to proceed, we help them create an environment to execute. Even with finding new co-founders or replacing the existing one. One of our key elements is a team assessment tool which we use to create the right team.
If they still want to proceed, we help them create an environment to execute. Even with finding new co-founders or replacing the existing one. One of our key elements is a team assessment tool which we use to create the right team.
How do you balance your time between (1) sourcing quality prospect ventures (2) doing due diligence for prospective investments and (3) helping current entrepreneurs? Which of these are you comfortable outsourcing to principals/analysts and which do you absolutely have to do yourself?
Since our motto is Founders.Backers.Builders, we start from scratch and get to know the founders quite well. We also support them in the pivots they need to make. So we do (2) & (3) ourselves but based on our own Venture Development Program. We work with solid partners for (1) and we share a part of our carry with those partners.
We believe in alignment of the whole supply chain of a startup during the first 3 years. Creating an environment surrounding the founders to let them focus on execution. Based on this we will fund the company from Pre-Seed till Series A.
Many GPs are good investors but don’t master one of the core skills – adding value as a board member. What do you think are some tricks to a productive relationship with founders? What should the culture be for the board and CEO for a quality relationship?
We only work with seasoned entrepreneurs who went through the rocky ride themselves and will always adding value during board meetings. These board meetings are always as transparent as possible and is only focusing around strategy.
We provide founders with templates to run these type of meetings and one of our experts is also part of it during the start to get the most effective board meetings. We also advise to add a dinner after the meeting to have a more informal connection between the board members.
How do you solve important conflicts with CEOs, such as lack of alignment on exits, strategy, or just the CEO being in denial about things like performance? Does the resolution begin with a private conversation or with involving other board members in a decision?
Since team failure is one of the most common problems amongst startups, we have implemented a quarterly pre-mediation session with the founders and raise topics like that during those sessions.
We also use data to proof our point and even get experienced founders in the game to convince the CEO to make the right decision. If this is till not working, we have not done a proper job in choosing the right team members and have failed ourselves.
When raising money from LPs, what is the thing you emphasize the most when “selling” the fund? Past returns? Team expertise (domain and/or entrepreneurial expertise)? Unique angle?
We have raised our Investment Cooperative based on team expertise and our unique approach of Metered funding & Network as a Service model where founders have access to a network of very experienced independent professionals who in return receive a part of the carry.
With our methodology, founders can focus on execution instead of fundraising because we provide a total of 2.2 MIO EUR in 4 tranches: 50k, 150K, 500K and 1.500K based on validated data. This unique approach is based on founding >15 companies ourselves, invested >200 companies ourselves and helped >2.000 founders in the past 8 years.
Key Lessons from Marc
- For board meetings, a template is the best start. If there is an explicit schedule for the meetings, as well as structured and prepared materials, meetings will be much more efficient and have more added value;
- Alignment with the board starts with the right founders and board members. By vetting the CEOs and board members they work with beforehand, Marc’s firm mitigates risk of misalignment in the boardroom;
- Marc’s investment process sells the support given to the founders. As a service provider VC, Marc’s firm gives the founders room to do what they do best – execute. This helps onboard LPs as portfolio founders can focus on executing;
