INVESTOR TALK #3
Felix Plapperer (Principal) from Paua Ventures
In our third investor talk, we sat down with Felix Plapperer (Principal) from Paua Ventures, a well-established early stage VC based in Berlin. With their focus on B2B (deep-) Tech, the firm has contributed to numerous success stories such as Pipedrive, Wandelbots or Detectify since inception in 2010.
Niklas: Felix, what is your professional background and what do you like most about working in the VC Industry?
Felix: I’ve spent roughly a year with Rocket Internet in Asia where I fell in love with the smell and feel of start-up land. Later on I joined the Boston Consulting Group, spent four years on consulting projects around the globe and then ended up in Berlin as a VC when I joined Paua Ventures about two years ago.
Niklas: Please tell us a bit more about your company. What differentiates Paua Ventures from other VCs? Which investment opportunities are you looking for?
Felix: We invest in early stage B2B (deep) tech companies in Seed and A rounds such as Stripe, Pipedrive, Wandelbots, Detectify and many more. We are looking for obsessed and mission driven teams that combine domain experience with commercial drive. As one of the first B2B tech focused investors in Europe, we have built strong relationships with many corporates that often become the first clients of our portfolio companies. Also, we support our portfolio on the HR side with our internal headhunting team that is filling up the recruiting pipelines of our portfolio founders.
Niklas: As an investor at Paua Ventures, which features of a business idea grab your attention?
Felix: The most important “feature” of a business idea at an early stage always is the team. Other than that, at Paua we are specifically excited about business models with “real tech” as value drivers. Why? Because in our eyes, those are the businesses with both true defensibility (data network effects, complex product IP, etc.) as well as high customer lifetime values (high lock in driven by deep integration). You often find this combination in “places” such as ProcurementTech (which I love & blog about), Industry 4.0 and Robotics, Cybersecurity, Mobility, all kinds of enterprise software (etc.).
Niklas: What are the differences between tech-founders who are “just good” and those, who ultimately get your fund Money?
Felix: When talking to (deep) tech founders, I almost always encounter brilliant individuals that have a real sophisticated knowledge of a specific technology and/or industry, as well as a good product DNA. What I see less often are those founders that combine the above with a very strong commercial DNA & leadership capability. As you might guess, those teams (not necessarily single individuals) that bring all of the above to the table are the ones that we love to back.
Niklas: With your experience, how can tech-focused startups prevent common mistakes in the funding process? What is often underestimated and leads to rejections?
Felix: It's quite an unspoken truth, so let me be honest here: Try to get a warm intro to a VC when you are fundraising. Why is that? As a VC, it's not unusual to be in exchange with a couple dozen companies per week. In order to stay on top of this high-quantity "dealflow", VCs are forced to rely on pattern recognition. Statistically speaking, those founders that know how to get a warm intro to a VC are the ones that are "street smart" enough to hustle their way to the right person within a potential customers's organisation. This, obviously, increases the odds to successfully build a hyper growth start-up (what VCs are desperately trying to find) ;-)
Niklas: What are the consequences of the COVID-19 crisis in terms of startup funding so far? Will the future for startups look different?
Felix: Well… it depends. If you are fundraising for a B2B (deep) tech company, chances are good that your business model is not at all or even positively affected by Covid-19. If that’s the case, not much has changed. If, however, your business is affected negatively, there are quite a few things that you should do: Control your cost and try to extend your runway. Switch to a remote sales model and focus your product offering so you can show quick time to value - as sales processes get more digital and companies are forced to save money, buyers try to go after quick wins rather than long and implementation heavy projects. To close with a positive note: There is more VC money in the market than ever before and the rockstar teams will definitely get funded!
Are you a founder with a promising business idea who is planning to fundraise over the coming months and interested to pitch in front of Felix? Meet him at this year's atec x conference and sign up via www.atec-x.de
Besides, if you have further questions or interest to discuss your business idea, get in touch with us here.