"We thrive on collaboration and exchange"
Supporting startups from the very beginning - that's exactly the approach First Momentum Ventures (FMV) pursues. The "first-money-in" investor launched in 2018 to fill the gap for early-stage investments in Germany. Their "from-founder-to-founder" mentality is still pervasive today, four years after founding.
In an interview with 5-HT, Fabian Schubert, Investment Manager, tells how FMV's first moments of success laid the foundation for many others to come.
"Our name represents our mission",
explains Fabian Schubert. He explains what exactly stands behind this phrase as follows: "We want to give founders the first, decisive push with our support so that they can pick up Momentum, which means first traction. To do this, First Momentum provides support beyond funding to move from an initial idea concept and prototypes to commercialization.
If that initial push is successful, the startups can then raise additional capital and reach out to new investors."
FMV's further development on two levels:
"On the one hand, we have developed further on an entrepreneurial level, namely from the initial student venture capital fund, to a tech investor with a focus on initial financing rounds," describes Fabian Schubert. Furthermore, FMV maintains a student focus, which is not least reflected in the many collaborations between universities and FMV. "For example, we have established an ambassador network with more than 70 students to bring them closer to the venture capital world. At the same time, we learn about exciting founding teams at an early stage," Fabian adds.
We know the barriers that founders initially have to deal with.
"On the other hand, we have decisively developed the ways in which we can support our portfolio. At the same time, the core thesis for our investments has remained identical. We look for strong, technical founding teams that convince us with exciting ideas and whose solutions potentially address a large market predominantly in B2B."
"In principle, we invest in pre-seed and early seed rounds",
says Fabian Schubert when asked from which startup phase FMV participates with its investments. "Of course, it always depends on the respective situation: On the one hand, we work a lot with deep-tech founding teams that have previously worked in the research environment of a university and want to spin out from this very university environment," he describes vividly. "In such cases, we invest early on, when there has been scientific validation and initial discussions with potential customers.
In addition to this, FMV also invests in classic software-as-a-service (Saas) companies where the first pilot customers have already been convinced and the focus is now on commercialization.
"We are currently focusing on the German-speaking region",
Fabian emphasizes. "Besides this aspect and the technology solution already described, we can best support founding teams with a B2B business model." In principle, FMV invests as lead investor in pre-seed financings or co-investor of seed rounds. Fabian Schubert adds, "In most cases, we are part of larger rounds as part of a syndicate. In this context, the normal round size is usually between €300,000 and €2.5 million.
In addition to the monetary contribution, we support the founders through contacts from our network, in sales, in recruiting workers or even our expertise in preparing for the upcoming fundraising rounds."
Through your community - the Pre-Seed Family - startups can search for funding from the comfort of their own home. How does the process work?
"With this event series, we offer startups the opportunity to pitch to relevant pre-seed investors from the DACH region all at once," says Fabian Schubert. "At the beginning, the startups fill out an application form online, after which, if the startup fits our profile, we get back to them with further details and feedback. Following this, the pitch presentations then begin."
These take place once a month, with a select group of startups pitching to a group of investors via Zoom. Here, each company has five minutes to present itself, followed by a ten-minute question and answer session.
"We created the Pre-Seed Family to bring together some of the most renowned investors in the DACH region who can advise, support and ultimately provide initial funding to founders," Fabian continues.
How is the chemical and pharmaceutical industry relevant for you, in this context?
"We find this area enormously exciting," Fabian emphasizes. "In particular, we see great potential in approaches that implement new technologies such as machine learning and thus enable development cycles to be accelerated and existing processes to be optimized. An exception to this is perhaps the aspect around drug development, simply because this area is rather risky.
But pretty much everything else, whether it's data analytics, sales, or supporting and simplifying processes from this sector, we're happy to support."
Brief contact, but already big plans
Because even though FMV has only been cooperating with 5-HT for a few weeks, the outlook is promising: "We are looking forward to working with 5-HT," says Fabian. "Everything from joint events to the basic idea of sharing knowledge and contacts with each other is enormously rewarding for us. Because we find this learning from and with each other very important. On the other hand," Fabian continues, "5-HT has a very large, well-developed network of chemical and pharmaceutical startups. The fact that this gives them easier access to VCs is of course conducive to driving future innovation in this area."
That's the beauty of our job: It thrives on collaboration and exchange.
"FMV analyzes more than 1000 founding projects and startups per year. Of course, we must do a lot of selection here. But through our successful network expansion, we have often had the opportunity to refer promising companies to other VCs and still generate added value in this way," describes Fabian. "It is precisely this aspect, that we are in exchange with each other, provide each other with contacts and actually always fall on open ears: that is what keeps us going.
That's also how we assess the future collaboration with 5-HT and hope to continue this kind of win-win situation."
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