"The recommendations of 5-HT are valuable to us"
Faster, better, Seed + Speed. Founded in 2016 by Carsten Maschmeyer, the Seed VC Fund supports startups when they are still in the early stages. Based in Berlin, the venture capital firm invests primarily in early-stage software startups from the B2B sector headquartered in the DACH region.
Managing Director Alexander Kölpin is also convinced of their concept: "Our company name reflects our ambition, which is to make quick investments in the seed or pre-seed phase." In an interview with 5-HT, he explains which startups can turn to the investor and how they are extensively supported.
From B2C to B2B: The development of Seed + Speed after its founding.
According to Alexander, the shift from a generalist approach to a focus on B2B software had mostly to do with the evolution of the industry and the fact that you can provide relevant input in the B2B space with the appropriate seed tickets. In addition, he says of the team's emergence, "We've assembled a professional and experienced team that has made many investments in the past and can act quickly."
Gradually, Seed + Speed has focused on the DACH region, which means the VC now actively invests in seed rounds of scalable software startups based in Germany, Switzerland and Austria. "In fact, we have investments in all three countries," Alexander said.
Which startups can turn to you under which conditions?
"Since we already invest at very early points in time, namely at the angel, pre-seed and seed stages, experience shows that the startups are no more than three years old," says Alexander. But even though Seed + Speed invests at early stages, there are still certain requirements for the startups: "Let's say someone is just thinking about founding or only has a pitch deck to show, that's too early even for us."
Pre-Series-A is the phase where we are active.
"In such a case, we suggest the startup to contact us again at a later time, for example after six months or a year," Alexander said.
Generally, all such startups can turn to Seed + Speed that have already developed a Minimum Viable Product (MVP). "From this point on, it is worth coming to us."
Another existential requirement: market feedback
"Ideally, the startups that apply to us have already received feedback from the market. Policy projects are also sufficient for us: Assuming there are no real customers yet who pay money for the developed concept, a project with test customers would also suffice for us. For us, the investment decision is made enormously easier by user feedback."
Specifically for the founders, this means that they do not yet necessarily have to show sales figures. "With this requirement, we simply want to see whether the founding team is capable of successfully bringing their developed MVP to market," he concludes.
Thus, the initial discussions between the investment team and the founding teams always aim to work out answers to questions such as "Is the product interesting?", "Does the customer really need this service?" or "What would customers potentially pay for this?".
What level of investment can startups expect?
"In the first ticket, we invest between €50,000 and €500,000. From experience, the median is usually around €3-400,000, although we like to be part of a larger overall round," says Alexander. "If we believe the startup can change markets and create measurable value, then we also participate in follow-on rounds."
We invest with initial investments up to €500,000 and participate in follow-on rounds up to a total investment of €1 million.
Seed + Speed takes both the lead and co-investor roles here. Because the investor acts as an evergreen fund without a fixed term, the founders have more flexibility with regard to the exit at the same time. In addition, they get access to a free B2B sales training: "Here, a dedicated team of sales coaches (Sales Coaching Team) works with each startup individually on their B2B sales topics. The training sessions are deliberately tailored to the wishes and needs of the startups," Alexander explains.
This sales training is offered in addition to the cash investment and aims to promote the establishment of sustainable and effective sales structures. This way, nothing stands in the way of fast and efficient growth.
To what extent are the chemical and pharmaceutical industries relevant for you?
"Even though we haven't made any investments here yet, both industries are still very interesting for us," Alexander emphasizes. "In our view, startups that deal with health and chemistry fit us because our focus is precisely on B2B and deep tech."
In which ways can 5-HT's startups get in touch with you?
"There are primarily three ways here. Firstly, classically via the website: here, startups can send us their pitch deck directly," says Alexander. Here he emphasizes the importance that this is structured as informatively as possible: "It should not only be self-explanatory, but also provide answers to the most important questions on 10-15 slides. It should arouse interest in the VC to want to get to know the team."
A pitch deck should be the hook for a conversation.
Apart from this, however, Alexander particularly emphasizes the second way of establishing contact: "Basically, we recommend that startups establish contact with us either via their peer group, other founders and investors, or precisely via platforms, such as 5-HT."
The contact to over 2/3 of our portfolio companies was established via recommendations. That's why we put a lot of emphasis on recommendations from 5-HT.
"Ultimately," says Alexander, "we advise startups to participate in as many pitch events as possible. We also try to always be present at these events. Primarily, of course, to find potential startups to invest in, because there is no better first impression than the personal presentation of a pitch deck. But of course we also want to exchange ideas with platforms like 5-HT."
Seed + Speed has been cooperating with 5-HT since the beginning of this year. What do you expect from the collaboration?
"We see a lot of opportunities in the cooperation with 5-HT. On the one hand, we are of course happy when you refer suitable software startups to us. But beyond that, we also like to take the chance to participate in your pitch events. Be it as a spectator, jury member or mentor," says Alexander.
The exchange and networking with each other - that's important to us.
"In the end," Alexander sums up, "this is exactly what we live from. Especially because in times of a global pandemic we can hardly meet at face-to-face events for the time being, every virtual event is all the more welcome.
In this context, we hope for a further, intensive exchange with 5-HT."
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