In total, the HTGF has completed almost 600 investments, more than 100 exits, and two IPOs. Some successful Munich-based startups in which the HTGF has recently invested include Iatros, Tangany or UnikiWe spoke with Marco Winzer, the face of the HTGF in Munich.
Munich Startup: Please introduce yourselves briefly!
Marco Winzer: The HTGF is Seed investor for innovative technologies and business models, primarily in Germany, but also in Europe. With over €900 million under management, we successfully support the best founders whose ideas can revolutionize entire industries and improve people's lives. From founding to exit. We typically invest €500,000 to €700,000 in the first financing round, either in the form of equity or with convertible loans. We can be the sole investor, but prefer financing with other early-stage investors. In total, we can invest €3 million in a startup across all financing rounds.
Ideas that can revolutionize entire industries
The startups we finance become part of the ‘HTGF Family‚ — one of the strongest networks in the high-tech venture sector, from which we actively support growth, customer acquisition, hiring, co-investments and follow-on financing with expert knowledge.
Munich Startup: What do you prefer to invest in?
Marco Winzer: Our passion is high-tech. We invest in startups in the fields of digital business models, industrial technology, life sciences, chemistry, and related business areas. The founders should develop highly innovative technologies, solutions, and business models. We invest very early—a proof of concept should be in place—which also means that the founding teams are often not yet complete. Together with the founders, we then conduct the appropriate team and company building. In other words, we help fill any missing skills within the team.
Munich Startup: What kind of startup would you never invest in?
Marco Winzer: We do not invest in the following industries, among others: armaments, alcohol, tobacco, or gambling—anything that we consider ethically and morally unacceptable or unsustainable. Likewise, we do not finance purely 'me-too' business models or 'copycats'. Overall, sustainability has become very important.
HTGF: “We are not the better founders”
Munich Startup: Do startups have to be afraid that you will interfere too much?
Marco Winzer: No. We know we're not the "better founders." We see ourselves as sparring partners. A partner with whom you discuss business development, develop strategies, and seek advice, contacts, and profitable networking opportunities. After seed financing, the interests of founders and HTGF should be aligned: namely, increasing the value of the company.
Operationally, the HTGF receives monthly reports and there are regular exchanges between our investment manager and the teams; there are also shareholder meetings, etc. Certain transactions that fall outside the approved business plan require the managing directors to obtain approval from all investors; this is typical for VCs. Furthermore, the HTGF never acquires more than 251,000 shares in the GmbH. The founding team is always in the driver's seat.
Munich Startup: How long does it take from the first contact to the conclusion of the contract?
Marco Winzer: Our record is 28 days. But that's the absolute exception. Startups should generally expect a period of three to five months.
Success factors for startups
Munich Startup: To be successful, a startup must…
Marco Winzer: ...solve a significant problem. The most important success factor, however, is the founding team or management! That's why our slogan is 'We invest in people'. The team must be agile, dynamic, problem-solving, professional, and forward-looking! And willing to change strategy and tactics when necessary. The founders must therefore be highly responsive to changes in the framework and market conditions and prepared to master even difficult situations. At the same time, they should have a vision. And, of course, they must address a large, dynamic market, where they assess product-market fit early on—but also regularly. Does the product or service address customer needs? This is the key success factor: the customer.
Disputes within the founding team — a knockout criterion for the HTGF
Munich Startup: Tell us the knockout criteria for the pitch!
Marco Winzer: For me, the primary goal in a pitch is to build trust. Honest, transparent, and open communication is important to me. This also includes openly addressing weaknesses or unresolved issues. The knockout criteria would therefore be: untruths, overselling, and arrogance, as well as disputes within the founding team. It's also worrying if the founders don't know their own figures, the unit economics.
Munich Startup: What have you ever miscalculated?
Marco Winzer: It happens… and every early-stage investor knows this: technological development doesn't work out as planned. Let me give you a vivid example from the pharmaceutical sector: 'The mouse dies during toxicity studies' — and the entire drug development is halted. Then the entire seed investment of the HTGF is worthless. Or regulatory requirements cannot be addressed.
However, a major factor in failed startups is the team: If disputes, isolation, etc. occur here, it often leads to the business plan not being pursued further and being doomed to failure.
Munich Startup: The trend of the year is…
Marco Winzer: Solutions to address the coronavirus crisis and its impact on society and the economy are currently trending. These include not only the development of vaccines and therapeutics, but also digital solutions, for example, in the areas of hygiene and hospital equipment. All technology fields are encouraged to participate.
Early support for strong teams
Munich Startup: What do you think the Munich startup scene is doing right?
Marco Winzer: Munich boasts outstanding scientific institutions—such as universities, research and development departments, etc.—that place an early focus on commercializing their results. This is supported by a strong and well-founded landscape of technology transfer centers and incubators. At the same time, there is early support for strong teams from the universities. Last but not least, the Munich scene is characterized by good collaboration between industry, startups, and academia.
Munich Startup: Last but not least: Who do startups approach when they want to talk to you?
Marco Winzer: In principle, you can approach any HTGF member. We are personally present at many startup events in Munich—just reach out. If you'd like to send us your pitch deck, we have industry-specific contacts: For Industrial Tech Fabian Hogrebe, for Life Sciences Julia Seliger, for digital business models Christian Berbig and for chemical startups Marie Asano.
Munich Startup: Thank you!
