April 06, 2023

LFP224 – Early Stage Investment & VC Winter or Simply a Correction? w/Ric Schaefer Target Global

42 minutes

In this episode we discuss VC early stage investment and whether there is a “VC funding winter” as some have called it or whether just a correction. How should early stage founders who want to raise funds maximise their chances of doing so? Few VCs go down to early stage investing but what factors do they look for? Funding is harder to come by right now but it’s still there. What themes and approaches help? Is it indeed a good rather than a bad time to create a startup?

Dr Ric Schaefer is a Partner at Target Global which is a pan-European technology investment firm with more than €3 billion in assets under management. Whilst investing across all stages of the startup to realisation lifecycle they are relatively unique in investing from pre-seed to A rounds.

To date via six global offices they have backed 15 unicorns and also have an investment in Revolut who you may have heard of.

Topics discussed include:

training for a triathlon starting from a standard level of fitness

Ric’s career journey from tech through the banking crisis to VC-dom

ten years of VC and Angel investing

the experiential difference between BigCo and SmallCo life

what a VC looks for in early stage investment include:

people who bring an unfair advantage

those who have had a successful venture before

the right vision and clear plan

those who have the “founder gene” and the drive to solve a problem

also like to back operators who have been number two or three in a business that has already scaled

success isn‘t just about money but about winning and building a sustainable business

examples form people who retire but just wither in absentia a daily challenge

the focus of early stage VCs need to be on building a big company, not just optimizing finances

different types of founders who can do the ‘zero to one‘ or the scale up from 1 to 10 or growth from 10 to 100

preference for founders who can “go the whole way”

VC funds still have a lot of capital available, but it is more competitive for newcomers

Non–institutional capital such as crowdfunding and angel investors have pulled back due to more competitive dynamics.

It is a good time to start a business – there is a wider pool of talent available and infrastructure has been built to enable businesses to be built far faster

Valuations are more reasonable than the last two years and people are looking more at multiples and the fundamentals of the business

Ric’s expectation of the best sectors for fund-raising and progress

Target Global is an early–stage venture capital firm that invests across the lifecycle of businesses, from inception to growth

invests in consumer, software, fintech, marketplace, and digital health sectors

has offices in Berlin, Tel Aviv, London, and Spain, and has backed over 100 companies

VCs invest in relationships and a series of rejections does not mean a no forever

Target Global is looking to invest in founders with a unique advantage.

And much much more

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By Tony Clark

4.6

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