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btov Partners is a European venture capital firm, managing about € 420m

This interview was held by Burak Buyukdemir and the article is written by Jeremiah Uke, contributor author at Startup Turkey

An interview with Mr. Alexander Stoeckel

This is part of a series of interviews with top venture funds in Europe by Startup Turkey. Alexander Stoeckel is a Partner and Board Member at btov where he has worked for the past 12 years. Alexander is currently responsible for the Managed Partner Funds managed by btov, i.e. customized startup portfolios that are assembled according to the preferences of the respective limited partner of a Managed Partner Fund. Furthermore, Alexander is a member of the Swiss Private Equity & Corporate Finance Association (SECA), where he was a member of the Executive Board from 2015 to 2017. He is also a frequent guest lecturer on venture capital topics at the University of St. Gallen.

btov Partners is a European venture capital firm with offices in Berlin, Munich, St. Gallen and Luxembourg. btov was established in 2000, initially as a business angel network. In the following years, the company evolved into a venture capital firm and a business angel network. btov currently manages 8 funds, and works with 250 private investors who co-invest with the funds and offer support and advice to the teams backed by btov.

btov Partners focuses mainly on digital technologies and industrial technologies. Digital technologies comprise, for instance, software-based products. Industrial technologies comprise, for instance, technologies that help to improve resource efficiency, or center around the concept of Industry 4.0, and the automation of manufacturing processes.

Fund has about 420 million Euros worth of assets under management, and have made over 150 initial investment rounds in the past years, with more than 150 companies in the portfolio. Annually, btov Partners invests about 50 million Euros in startups as initial investments and follow-up rounds. The Swiss fund is designated to make Series A investments, the team also makes selective seed investments, in addition to growth investments as well.

Today, btov Partners has about 420 million Euros in assets under management, and has made over 150 initial investment rounds in the past 10 years, i.e. the company has more than 150 companies in her portfolio. On an annual basis, btov invests about 50 million Euros in startups. The firm’s sweetspot are Series A investments, but btov also does selective seed-stage and growth-stage investments.

btov invests primarily in startups from Europe. However, they also do selected investments in the rest of the world, especially in the U.S., Israel, and Asia. btov requires that they have a very solid understanding of the business case of a given startup, and then either btov themselves will act as lead investor, or they will invest alongside other trusted investors.

According to Alexander, btov sees more than 3000 investment opportunities per year. 15-20 of the 50 investments they manage every year are initial investments in startups added to the portfolio.

Startups get introduced to btov through members of the btov Private Investor Network, the btov team, or by contacting btov directly through the website or LinkedIn. btov has a dedicated screening team of 4 people, who are responsible to analyze each incoming investment opportunity systematically, i.e. in terms of fit with the btov investment strategy, team, product, market, competition, business model & sales, financial plan, investment case, and business strategy. This is process is designed to develop a comprehensive understanding of the startup and the startup team’s intentions. Startups usually get feedback within 10 days after the first contact. On average, it takes btov 6-12 weeks to effectively invest in a startup.

Alexander mentions that the team of a startup is one of the most important components of startup investments. The composition and quality of the team is also one of the possible reasons why individual startups get rejected by btov. Some other reasons for rejections are the level of advancement of the product (i.e. stage/maturity), market size, too strong competition, and unconvincing economics/potential to scale.

Alexander mentions the most famous company rejected by btov to be Uber. He also added that there are a couple of other opportunities they have missed and that the team strives to make sure the anti-portfolio remains small.

One good example of a btov success story is the Israeli company Orcam, founded by the founders of Mobileye (sold to Intel for $14 billion). Orcam has developed a highly innovative optical technology and was valued at USD 1 billion in February 2018.

Another btov success story is that of Data Artisans, introduced to btov indirectly by contacts of the btov Private Investor Network. Data Artisans was successfully sold to Alibaba in January 2019.

According to Alexander, many startups get rejected by venture capitalists because they approach the VCs too early. As a startup, in most cases, it helps a lot if you can show some traction of your business in the market. It is also advisable to try and get the company as far as possible in terms of KPIs, e.g. revenue, number of users and so on, before founders decide to reach out to VCs. Moreover, Alexander says that startups should do some research on the investors they plan to contact, i.e. find out where the investor you plan to contact has invested, contact portfolio companies of the investor and ask the founders about their experience since the investment.

11 March 2019

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