00:03:41 · Uwe Horstmann
[00:03:41] S1: Very good question. I mean, I'm I'm still looking at it quite from an interesting... Like, as a very interested observer, because I'm trying to understand, you know, how is that public market model of stocks compatible with what we do here as as venture capitalists. Right? I mean, how does that bridge look like? How does the public look at those businesses that in the beginning don't make money, they burn a lot of money, they, can become successful, they can become market defining. So, you know, I'm I'm I'm grateful for the for the courage that that people are taking to put those companies also in the stock market. We'll have to see, I think, how exactly they are treated on the on the public market, how compatible those two models are. So that's kinda, like, how how I see it. It's definitely still super important and played a big role, just alone from a talent pool perspective. Right? Because back then, let's say, you know, 2008 to 2010, if you wanted to get into the startup ecosystem, how did you even do that? Because it it was not as obvious as it is now that you can just start your own company. You probably needed Yeah. Some expert advice and so on, and and that role for a lot of people was taken over by Rocket. And now probably it's it's taken over by by more accelerators or by angels or just by reading blogs or listening to podcasts and so on. Now that information flows freely. But back then, I think it needed a catalyst, that can absorb people and help them build their careers. And then that's how I at least, see Rocket, and that's what they were... What a company was really, really good at. And now I think the role is probably different because that specific aspect is not needed to that degree anymore. Right? As as I mentioned, if you want to if you're fresh out of school and you wanna start your startup, you can just do it. You don't need anyone else anymore. And that, of course, also has changed a bit of the role that a company like Rocket would have to play in such an ecosystem.
00:05:41 · Andre Degler, Uwe Horstmann
[00:05:41] S0: Yeah. Well, it certainly was a catalyst for you. Don't think I don't think it happens a lot now that someone who is joining a company straight out of college after three years just cofound a a venture capital firm that that becomes pretty successful in in its early years even. So I don't think it happens a lot right now. [00:06:03] S1: Yeah. Yeah. I... It... Me, personally, I mean, it it was a bit of a perfect storm. Things happened. Things came together, and then we had investors who really early on gave us a, you know, a a a big chunk of trust, obviously, by going onto the journey with us because we were first timers, emerging managers as they call them. And among our group, I was by far obviously the the youngest and and least experienced. So I'm very thankful for our investors, but also for my partners that they said, okay. Now let's take this young kid alongside us, and hopefully, he can carry his weight, of course. [00:06:38] S0: Right. So... And it is a good, a good segue into, talking about the firm itself. So what is Project A? What's your thesis like? What's your ticket size? What are you looking for? Give me the pitch.
00:06:51 · Uwe Horstmann
[00:06:51] S1: Yeah. The the short pitch is that we are pan European, so we have an office in London, one in Berlin, and presence through, you our people all over the continent, because we think great companies can start to exist everywhere. We are very thesis driven, so we have an investment team of around 10 people, all of them with their very specific, very concrete both industry expertise but also with thesis about those specific industries. So very conviction driven, very much based on our own interest in certain segments that are emerging in the market. We invest somewhere between 500 k and €10,000,000, I would say, over multiple rounds. In a company like Trade Republic, we can then also invest like $3,040,000,000, so we can definitely move a lot of money for successful companies who can grow even faster with that with that money. What's special about us is that we have a 100 people operational team on staff. To my knowledge, that's not something that anybody else has, at least in Europe. So 100 people working for a venture capital firm. Those are all operators. So we're talking marketing, acquisition, retention. We're talking product, technology. We're talking sales, business development, but also recruiting, organization building, all kinds of aspects of what you need when you when you build a business. And those people are available to you if you want them. It's not a must. It's not we are not forcing them upon you. We don't take sweat equity, nothing. They're purely available to you if you want them. If you want them now, if you want them later, if you wanted to have just a few experts, if you want to have a broad bench because your scaling is just not controllable without some support, that's totally up to you. But if we invest, you get everything that you get out of a normal venture capital firm as well as the optionality. If you ever want and need it, you can draw from our resources. Because back when we started, the world wasn't just waiting for another bunch of dudes who start spreading checks. You know, it was true back then. It's true now. So you have to think about how do you differentiate yourself. And we're operators. We're entrepreneurs ourselves, so we wanted to align our interests as much as we can with our with our founders, and we did that by trying to create operational value add. That's the idea. That's what we're trying to do.
00:09:13 · Uwe Horstmann, Andre Degler
That's why we have those 100 people. [00:09:16] S0: Mhmm. This sounds a tiny little bit Rocket Internet esque to me, having this sort of back office that can be shared by a startup that you invest in. Is this this on purpose? Is this something that you learned would make sense? [00:09:31] S1: I mean, we we... At Rocket, we definitely saw the power that you can have by combining great entrepreneurial talent with a good workbench that they can also build upon. But that's also where the similarities end. So for us, we only invest in companies that are stand alone, that are successful, that are great, and then we offer them the optionality on top if they want to. We never would like to take over control of a company. Companies always, of course, have to build their own culture, have to build up their own teams and so on. We can help, but we will only help basically, obviously as much as we need it, but then as little as possible. Right? Because we don't want to create companies that are somehow dependent on us. And the really good entrepreneurs, they wouldn't be interested in that. Entrepreneurs are interested in getting specific support here and there on specific challenges, and then they build up their own stuff. And that's totally what we want to do. And that was, of course, different from what we did at Rocket almost a decade ago.
00:10:29 · Andre Degler
[00:10:29] S0: Yeah. Yeah. I get it. Absolutely. So, in the conversation that preceded, this interview, one of the things that, we discussed is the ecosystem in Germany, and I will just quote what was written in in this interview pitch. The risk of the VC ecosystem in Europe and how and why it is now ready to explode. The only missing ingredient is that German bureaucrats need to make share option planning easier for high growth startups. So what do you what do you mean by the fact that it's ready to explode, and then from there, we can unpack the rest?
00:11:03 · Uwe Horstmann
[00:11:03] S1: So I think exploding an explosion in a good way, a good explosion, a Cambrian explosion, you will, I think we are we're about to see... Or we are already seeing that all over Europe. And I think it's just a result of some really, really good developments that are kinda combining... That are being combined with each other. So it's a positive cycle of more talent, more capital, more good companies, more exits, more investors, and they all kinda push each other. And we've been seeing that now for the past years. We are seeing that entrepreneurs from more diverse backgrounds, hopefully more and more, because it's still a big problem, are tackling challenges for more and more complicated fields of business, if you will, as well. Not only more e commerce, more e commerce, me commerce, but people are really getting into health care and industrial production and the future of work. But that is great. That is happening in Germany, that is happening all over Europe, and that self reinforcing effect is only getting faster. At the same time, European companies can now much easier tackle international markets as well. There's no reason anymore why a European software company shouldn't become a market leader in The US also. So that, of course, adds a whole another aspect, to that whole startup journey, and that that can make them much more successful. Yeah. Full stop. I I think that's that's the answer to the question about, you know, why is the explosion now? Think I it's a continuation and a culmination of a lot of positive trends, and it will only continue that way. Now valuations, you know, the way how we price startups, of course, are very high. That being said, I think maybe we'll see some correction, but the fundamental general trend I think is correct. Because startups can become more successful, they can become larger also at an exit, so I think it's okay if they also get more quote unquote expensive for investors when we invest. And now you wanted to ask specifically about that that stock option issue in Germany?