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> Venture capital: From my experience this is mostly true, as there are many people that try to appear as if they have very good connections and money, but in t
by Kequc 10y ago
> Venture capital: From my experience this is mostly true, as there are many people that try to appear as if they have very good connections and money, but in the end they offer pre-seed level investments for double-digit equity. A few of the international VCs have offices in Berlin now though, so my advice would be to stay away from the impostors and go to firms that have actual credibility and a history of funding successful startups.
If you suggested a VC I might be able to tell you what my experience was with them in Berlin. It's entirely possible my startup just was bad. But I'd tell you what their problem was with us and it might help to flush out a bigger picture. Might be interesting. Kind of a delicate subject possibly though.
So, on the other hand maybe I should just speak generally.
All of them wanted to see sales before they would invest. That means they wanted to see market impact, we could show them all the imaginary projections and potential market impacts we wanted and it didn't make any difference. They wanted to see real world income.
That is hard to do if you don't have any capital. You can tell them all day what you'll spend the money on and what you predict will happen and they don't care. Meanwhile your product idea is being copied by the large company down the street who saw you pitch pitifully begging for a VC to pay attention to you.
That large company will make the same thing, worse but with capital. Then they'll sell it to the same people you are trying to convince to jump on board for a equity stake with you.
That is by far the largest hurdle. Before you have income they aren't interested, and if the other company never has income because the idea is too good or too unique or too hard to do. Then they'll pay attention to something easier. There is no attention being paid to innovation.
I've seen for example business loans in Germany which are given out to Flower shops. There are a million flower shops and kebab shops. But those are proven businesses. Real business loans, which means if the business fails the owners can just claim business bankruptcy.
That doesn't exist for tech startups in Germany you do not qualify. They want a tiny bit of income and no risks. Which to me says it isn't a startup hub.
- ThePhysicist 10y agoYes I can largely confirm this experience: When you're pre-revenue/pre-traction it's very hard to acquire funding, and even after you made initial sales the VCs are quite reluctant. Honestly, in Germany it's probably better to rely on government-funded investment programs, as paradoxically those tend to take on more risk than most VCs in Germany, at least if you're building something innovative and not just do another copycat of a US/Chinese startup.