Business Angels as an asset class is growing around the world, and within Germany, Business Angels Netzwerk Deutschland (BAND) aims to reflect the community’s growth and change made evident by its inclusive membership of Angels, Accelerators, Crowd Investors, Family Offices and Incubator. Matthias Wischnewsky, BAND’s Project Director discussed with KITE Invest about the landscape of the German angel community and how BAND is aiming high in order to encourage the most fruitful of angel investing communities.
KITE Invest: In your estimation is the Business Angel community in Germany different from that of others in Europe, and if yes, how so?
Matthias Wischnewsky: This is hard to answer, since reliable and comparable data relating to business angels’ investments in start-ups across Europe is difficult to collect. Speaking of the architecture of the start-up scene and the vitality of business angels within continental Europe, it seems fair to say that Germany does not need to shy away from competition. Sure, Great Britain is still ahead, having a highly active start-up and investment ecosystem. Considering the German ecosystem, there has been a change in recent years resulting in a more diverse landscape in seed-financing. BAND acknowledges all the players such as family offices, seed vc’s, business angel funds, accelerators and also crowdinvesting, and encourages cooperation between everyone for the benefit of start-ups.
KITE: Does BAND have alignments with other Angel Networks from around the world? And if so, what are measures of the collaborations?
MW: BAND is fully aware that the start-up and angel investing ecosystem should not be limited to a national level. After all, we live in a globalized world and start-ups must now more than ever target the global markets for their success. Connecting internationally in a fruitful way seems to be easier said than done, though. On an organizational level we are members of Business Angels Europe (BAE), the European equivalent to BAND, aiming to represent and give a unified voice for the business angel community in Europe. When it comes to overseas, we like to keep the exchange going by inviting speakers from all over the world to our events, such as the German Business Angels Day. We also maintain afruitful exchange of experience with the American Angel association ACA.
KITE: What space and assistance has German Government given the Business Angel community?
MW: As an umbrella organization of German Business Angels networks one of our main fields of work lies in stimulating policies. As the first nation in 2012, Germany took part in the European Angels Fund, which matches investments of renowned Angels on a pari passu basis. Additionally, in 2013, German government has launched a grant programme for Business Angels investments called “INVEST”. Although there will always be some initiatives of politicians, which prove to be counterproductive towards the investment climate, the acknowledgement of Business Angels by politicians has definitely risen in the last few years.
KITE: What was purpose behind establishing the Business Angels Decade? What are some of the remaining goals left to achieve before 2020?
MW: The initial spark was lit in the Business Angels year 2010 that we launched to raise awareness for the importance of the topic in Germany. Since we like to think big and also wanted to sustain the momentum of 2010 towards 2020, we established the Business Angels Decade. Our main goal for 2020 is to at least catch up with the UK in terms of Business Angels investments. We’ve set the bar pretty high, but are nevertheless confident that this is achievable for us in Germany. As an example, the number of angels in Germany has increased from 5,000 in 2007 to 7,500 in 2013.
KITE: In terms of Startups seeking Angel Investors, what in your estimation are some of the greatest challenges facing investment opportunities?
MW: The greatest challenge is surely to find an angel who matches the start-up’s needs optimally: a typical business angel, who is not only investor but also mentor with knowledge in areas the entrepreneurial team cannot provide on its own. A person like that does not coincidentally appear for a start-up, he needs to be found. So the challenge is to stay with it, network, go to events, pitch and talk to people to eventually find the right angel investor. This search can take some time, but it’s definitely worth it.
KITE: What would you say are the top criteria and characteristics in a Startup that Angels generally look for?
MW: Besides the innovative and scalable business concept, it is the team that is of the most importance. If the Angel is convinced that the team is capable of achieving the proposed goals, he will be more likely to invest money and expertise.
KITE: What efforts does BAND take to assist those looking for funding?
MW: As the umbrella organization of the German Business Angels networks, we offer start-ups access to Business Angels investments. Preferably Germany-based start-ups can send in their executive summary via our standardized one pager sheet. The one pager is checked for plausibility and then forwarded to our 40 member networks across Germany, Austria, and Switzerland. The networks then match between investors and start-ups, mostly through private pitching events. In addition to that, we host an online directory for start-ups who have proven to be eligible for the grant INVEST, in order for them to be visible towards investors.