Acton Capital Partners has been investing in internet companies since 1999. In addition to etsy and HolidayCheck, there are Ciao.com, Zooplus, Mytheresa.com and Windeln.de also includes some successful Munich startups in the portfolio. Dr. Christoph Braun, Managing Partner at Acton, talks to Munich Startup about preferences, trends, fears, and missed opportunities. If you want to meet him in person, you can do so at Burda's Startup Day'n'Night (#SDNN) on January 20th.
Christoph, please introduce yourselves briefly!
Acton is a venture capital fund based in Munich. Our team has been investing in early-stage, technology-driven companies in Europe and North America since 1999. To date, we have invested over €350 million in more than 65 companies.
“A good investor should ignore personal preferences”
What do you prefer to invest in? Do personal preferences sometimes influence your investments?
We invest in fast-growing, young internet companies. The absolute revenue size is not necessarily decisive for us at the time of entry. What matters is whether the company can grow quickly, profitably, and sustainably in its specific market. We typically invest in B-round financing or in more mature A-rounds. Most of our portfolio companies target consumers (B2C) or small to medium-sized enterprises (SMBs).
A good investor shouldn't just base their decisions on themselves and ignore personal preferences as much as possible. I'm far too curious to specialize in a few segments.. So far, I have been able to invest quite broadly, from marketplaces like Etsy to software like Clio to e-commerce at Zooplus or Momox.
Would you ever invest in unknown industries?
We don't invest in the technology itself, but rather in a business model that leverages a technology. So far, these have always been innovative models, but in familiar industries.
“It must be clear how the company will earn money in the future”
What kind of startup would you never invest in?
We invest in companies with business models that clearly demonstrate how they can generate revenue in the future. This eliminates companies that initially aim for maximum distribution but have yet to establish their business model.
Do you scout for promising companies yourself or do you have consultants for this?
We do our own research and often approach companies directly. We often receive recommendations through our network or funds that enter a phase earlier. We also look for promising startups at conferences and trade fairs. We rarely get through consultants.
“Fear would be poison”
Do startups have to be afraid that you will interfere too much?
Fear would be poison, because the relationship between founders and investors depends above all on trust. A good investor interferes as much as necessary and as little as possible. We strive to make a genuine contribution, especially in strategic matters and in the development of the organization.
Ultimately, we want strong, entrepreneurial founders whom we can actively support. The emphasis is on support. The founder is still in control.
And how long does it take from the first contact to the conclusion of the contract?
This varies from case to case. An investment can be completed quickly and successfully in less than six weeks. However, we often get to know the companies at a very early stage and initially monitor their development until the time is right for an investment.
“Establishing a company is a marathon”
“To be successful, a startup must…”
...have the right idea at the right time and implement it with the right team. Founding a company and successfully establishing it in the market is not a sprint, but a marathon. Accordingly, good time management is essential for sustainable growth.
Tell us the knockout criteria for the pitch!
Founders who are already considering an exit during their pitch. We invest in entrepreneurs who want to stay on board long-term and have the staying power to turn a company into a market leader.
Acton's Anti-Portfolio
What have you ever miscalculated?
Every venture fund has an anti-portfolio: successful companies in which one could have invested. We, too, have rejected some companies that have since become highly successful. That's part of the business, just like individual write-offs. Although we strive for a balanced portfolio and don't focus on individual winners that will repay the entire fund, not every company always grows the way we envision. But that's why it's called venture capital.
The trend of the year is…
Sustainability! Recommerce companies like our holding momox are at the forefront of a fundamental shift in consumer behavior.
“More courage to embrace technology”
What is the Munich startup scene doing right from an investors' perspective? What could it do better?
The Munich startup scene is quieter than the Berlin one. The focus is also different. While many startups in Berlin focus on end customers, Munich is home to a lot of B2B innovation and a greater willingness to embrace technology.
The ecosystem of Munich's Technical University and Ludwig Maximilian University (LMU) is home to many exciting startups that are already considering their connection to industry early on. This is both good and right. Berlin is more playful and very strong when it comes to networking between founders and startup teams, as well as sharing expertise and knowledge. Munich certainly has a lot to learn here.
Last but not least: Who do startups approach when they want to talk to you?
We read every pitch that reaches us. Ideally, startups identify in advance which team member is responsible for the topic in question and send their pitch via email. What doesn't work so well is sending emails to all colleagues; that ends up being spam.
And if you want to meet Acton personally, you should definitely go to the Startup Day'n'Night (#SDNN) of the Burda Bootcamps gehen – Dr. Christoph Braun will be there as a speaker.
