Roman Huber has been managing director of the Landshut-based Bayern Kapital GmbH, the venture capital firm of the Free State of Bavaria. He answered our questions in an interview with Munich Startup.
Mr. Huber, please briefly introduce Bayern Kapital GmbH to us!
As a venture capital company of the Free State of Bavaria, we support young, innovative high-tech companies in Bavaria by providing equity capital. We were founded in 1995 and are a wholly owned subsidiary of LfA Förderbank Bayern. To date, we have over 210 million euros of equity capital invested in around 235 innovative technology-oriented companies. This has created over 5,000 additional jobs in Bavaria.
What do you consider to be the classic success factors for founders?
Founders need professional expertise, high motivation, and perseverance. They also need a market and sales focus, as well as the ability to work in a team and partner.
“The focus is always on the customer”
What factors determine whether you invest in a startup or stay away from it?
We generally work with technology-based startups. Founders need to ask themselves: Why and at what price should someone be interested in purchasing my product? The customer is always at the center of a successful company. What do they want, what benefits do they get? There must be a fundamental market need for a new technology or service. In addition to the business idea, we assess the personalities and skills of the founding team.
In which sectors do you see the greatest future prospects?
We specialize in financing future technologies, including life sciences, software & IT, medical technology, materials & new materials, nanotechnology, and environmental technology.
What do you think are the most common mistakes founders make? Is there a simple mistake that could easily be avoided, but is still made by many?
A common mistake is for a young entrepreneur to fail to translate their excellent business plan into detailed project management. Or to align their innovative efforts with concrete customer benefits very late. However, we help avoid mistakes right from the start by asking important questions, such as: Is the "Freedom to Operate" study in progress? Do the interim results indicate problems with third-party patents? Is there a coherent benefit-price argument for customer acquisition? And so on.
What does the perfect pitch look like for you and how does a founder immediately catapult himself into the sidelines?
In addition to the innovative business idea, it's good to be able to present it clearly. Customer benefits shouldn't be neglected. A clear and plausible allocation of tasks within the founding team is also always convincing. Anyone who explains lengthy technical details and clearly has no idea who the target customer is is, at the very least, too early.
Innovation and start-up centers show positive impact
How has the start-up landscape in Bavaria changed over the last 20 years?
The startup scene throughout Bavaria has noticeably revitalized and grown significantly. It has also become more professional, for example through business plan competitions, startup consulting, and investor networks.
Why do you consider the current situation for startups in Munich and Bavaria positive? Where do you see room for improvement or where there is still room for improvement in this country?
The long-standing government initiatives in the regions, I'm thinking of the innovation and start-up centers and cluster policy, are having a convincingly positive impact. This is evident in increased start-up activity and networking. But even Bavaria sometimes has disadvantages, for example, compared to the USA. Small and medium-sized enterprises, in particular, could bring their innovations to market more quickly if the capital markets for such companies functioned better. In the USA, investors are still more open to innovative business approaches.
Are there any startups you have worked with that particularly stand out in your memory and if so, why?
With 16 IPOs and 24 trade sales, it's difficult to choose. What they all have in common is years of trusting collaboration, even during the inevitable difficult phases.
Thank you for the interview!
