Investor Talk #4

In this investor talk, we sat down with Niklas and Lucas from Freigeist Capital, a famous and well-established Venture Capital firm based in Bonn. With their focus on technology ventures, the firm has contributed to numerous success stories such as Lilium, Kraftblock, Xentral, Endurosat or AirUp

Niklas (RWTH): Niklas and Lucas, what are your professional backgrounds and what brought you into the VC industry?

Niklas: I have a business background and have worked at several consulting firms. After working  in a family business for two years, I was set to continue my path in an entrepreneurial environment. I started at a larger private equity fund, then decided to switch to Freigeist Capital. 

Lucas: I would say my rather entrepreneurial background originates from my parents’ own business in the recycling industry. This led my interest towards my studies, I have a Master degree in Innovation Management & Entrepreneurship. After working as an entrepreneur in residence, I gained experience in the field of crowd innovation software and learned a lot about real estate from my own side business. What fascinates me about the VC scene is the diversity of people and ideas with which we are confronted every day.

Niklas (RWTH): Please tell us a bit more about Freigeist. What differentiates your investment approach from other VCs?

Niklas: Freigeist is different from most other VCs as we invest our own money and not the money of third parties. Therefore, we are not bound to typical investment and divestment cycles, which provides us with more operating freedom. We only invest in 2-4 companies per year, allowing us to allocate about 50% of our resources on supporting our portfolio companies. This support ranges from IT over recruiting and sales to financial planning. Essentially, we understand ourselves as co-founders rather than typical investors. Still, the founders always have the last call. 

Niklas: Why do you focus on technology startups and which technologies are of special interest?

Lucas: We invest in technology startups with groundbreaking ideas, ideas that disrupt markets and improve the quality of life on earth exponentially. With our technology focused investments, we are trying to solve the most relevant challenges of today, such as climate change or pollution. Technologies we are currently looking at include robotics, edge computing, sensors, synthetic biology, IOT or blockchain, to name some of them. In the future, topics like quantum computing, nuclear fusion or brain computer interfaces will gain more Attention. 

Niklas (RWTH): Anything you want to share in particular, any events or launches or startups that are currently in your portfolio that excite you the most?

Lucas: Literally, we are launching the first satellite of our portfolio company Endurosat in 2021! It will be the first satellite of a greater mission that will enable consumers like you and me to have direct access to space data via a space app store!
Niklas: We are also currently working on the relaunch of our ERP software Xentral with a brand new design! Xentral is growing at an exponential rate, and we hope to improve the current ERP software situation for small and medium-sized businesses, building a strong SAP competitor. Talking about growing exponentially, we are looking for new team members to join our journey!

Niklas (RWTH): What is your view on technical universities based in Germany with regard to entrepreneurial activities? Does entrepreneurship need more attention in education?

Niklas: It is great to see that more and more entrepreneurial initiatives or events such as atec x are rising from technical universities. The foundation for great technological innovation lies to a great extent within these universities and its students. These events and initiatives guarantee the much-needed early exchange between startups, existing businesses and investors which is beneficial for all.

Niklas (RWTH): What would be your approach to strengthen entrepreneurship early in school or at universities?

Lucas: I have always been and still am convinced that not only the topic of “business”, but specifically entrepreneurship should be a mandatory subject in our school system. Every student between the age of 14-16 should get the chance to learn about the opportunities of founding their own company.  

Niklas (RWTH): Entrepreneurs are always asking how to get face time with investors. How do they get to meet you?

Niklas: At Freigeist, we use various channels to get in touch with the startups out there. We screen the whole European market through a multitude of websites, we participate in startup events and have our own application tool. We take a look at every pitch deck or application we receive. If the topic has a technological relevance, the website looks promising and the pitch deck covers the most relevant information on product, USP, market, traction and team (to name a few), we will get in touch and schedule a first call.

Niklas (RWTH): What is the best advice you can offer founders seeking funding during the pandemic?

Lucas: Don’t worry about funding, there is enough money in the market (for great teams with great product visions ;)) No seriously, for founders looking at solutions for the pandemic crisis, my advice is to extensively screen the market for existing competitors as the number of companies popping up is enormous. Ask yourself how you can potentially adapt when the crisis is over. For all others, we know that sales might be harder without personal contact these days, but there is a lot of software out there that facilitates exchange, so use it! Try to find online solutions to validate your product and traction. Today, great investors find great startups very early through a great network and partnerships. Therefore, make sure you are present on relevant startup websites and that your own website provides a good overview of the product with an at least decent design ;)

Are you a founder who is planning to fundraise over the coming months? RWTH Entrepreneurship Center’s investor network comprises some of Europe’s leading venture capital firms and business angels. Our dedicated team of start-up coaches can help you leverage this network.

Get in touch with us here.