Ask HN: How can I get investor intros in Berlin?
I will be in Berlin on Friday. How can I get investors to pitch my startup to? We are looking at the seed stage (50-75K) and I realize this is the hardest time to raise money. I have never raised money before.
69 comments
Please don't waste your time pitching to investors in this position in Berlin. If you make X < 100.000 EUR monthly revenue, then any "investor" in Berlin will probably tell you:
"Very interesting. Let's keep in touch and come back when you make 5 * X EUR revenue."
And if make X >= 100.000 EUR revenue per month, then you most likely don't need 50-75K.
One thing in Berlin ist crucial: Social Proof. If you have it, you can raise 5 Mio EUR with basically zero traction and if you don't have it, it will be a long and timeconsuming process to raise any money at a fair valuation.
Are you willing to spend 6 - 9 months to raise 50 K and do you have significant monthly revenue? If so, your approach to meeting random investors should work. Otherwise you might want to apply for an accelerator in Berlin (for 25 K) or just focus in bootstrapping until you can approach international VCs outside Berlin.
EDIT: Spelling
"Very interesting. Let's keep in touch and come back when you make 5 * X EUR revenue."
And if make X >= 100.000 EUR revenue per month, then you most likely don't need 50-75K.
One thing in Berlin ist crucial: Social Proof. If you have it, you can raise 5 Mio EUR with basically zero traction and if you don't have it, it will be a long and timeconsuming process to raise any money at a fair valuation.
Are you willing to spend 6 - 9 months to raise 50 K and do you have significant monthly revenue? If so, your approach to meeting random investors should work. Otherwise you might want to apply for an accelerator in Berlin (for 25 K) or just focus in bootstrapping until you can approach international VCs outside Berlin.
EDIT: Spelling
So there are no investors for early startups? (honest question, not a rethorical one)
There is still a lot between 100k revenue and not profitable at all. What about something like barely selfsustaining (but by that proven to be somewhat profitable) with 2 employees? Or making 10k with a 2-man startup?
There is still a lot between 100k revenue and not profitable at all. What about something like barely selfsustaining (but by that proven to be somewhat profitable) with 2 employees? Or making 10k with a 2-man startup?
There are a lot of Investors in Berlin. But without Social Proof, it would probably be a waste of time trying to approach them.
If you make about 100k revenue (or if you have otherwise significant traction), you can not only approach investors in Berlin but also ouside, which kind of solves the "Social Proof" problem.
If you are barely selfsustaining, then please stay bootstrapped and grow your business. Otherwise the process of fundraising in Berlin will most likely kill your business.
EDIT: added one paragraph
If you make about 100k revenue (or if you have otherwise significant traction), you can not only approach investors in Berlin but also ouside, which kind of solves the "Social Proof" problem.
If you are barely selfsustaining, then please stay bootstrapped and grow your business. Otherwise the process of fundraising in Berlin will most likely kill your business.
EDIT: added one paragraph
Could you briefly explain how "social proof" applies to startups?
If you have Social Proof, you know you have it. If you are not sure, then you don't have it.
Social Proof could mean: - You are a Serial Entrepreneur - A famous Business Angel invested in your company - You graduated from a University with a great Alumni Network - etc.
Basically if a potential investor evaluates your Market, Traction or Business Model, then you already lost. If a potential investor invests, because he thinks other investors want to invest, then this is Social Proof.
For example you are talking one hour with a potential investor:
If you talk 90 % of the time about who else is investing and about how to structure the investment round, then you have Social Proof. If you instead talk 90 % of the time about how big the market is, what your revenue model will be any why your churn rate only decreased 2 % in the last month, then you don't have Social Proof.
Also if the potential investors talks about making the investment bigger to increase your run rate and increase your leverage for a Series B, you have Social Proof. If instead the potential investors is asking you if you can decrease your burn rate or recommends you to raise a smaller amount, then you don't have Social Proof.
EDIT: Added one paragraph
Social Proof could mean: - You are a Serial Entrepreneur - A famous Business Angel invested in your company - You graduated from a University with a great Alumni Network - etc.
Basically if a potential investor evaluates your Market, Traction or Business Model, then you already lost. If a potential investor invests, because he thinks other investors want to invest, then this is Social Proof.
For example you are talking one hour with a potential investor:
If you talk 90 % of the time about who else is investing and about how to structure the investment round, then you have Social Proof. If you instead talk 90 % of the time about how big the market is, what your revenue model will be any why your churn rate only decreased 2 % in the last month, then you don't have Social Proof.
Also if the potential investors talks about making the investment bigger to increase your run rate and increase your leverage for a Series B, you have Social Proof. If instead the potential investors is asking you if you can decrease your burn rate or recommends you to raise a smaller amount, then you don't have Social Proof.
EDIT: Added one paragraph
I'm in similar boat with the OP and with your comment I feel defeated already, but I guess it's the reality. Thanks for the bitter pill :)
Don't feel defeated. Embrace the fact that you can make it on your own ;)
Do you think surviving through side-gigs is a valid way of bootstrapping?
Yes! I think trying to make revenue as early as possible and making side gigs if necessary, is a valid way to bootstrap. But this is just my opinion and this topic should require its own thread, if you want to go into details.
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Social proof is a catch 22. Social proof is proof of previously being successful(or perceived to be). They want the return of investment to granted as possible. And for that they want previous successes.
But to get those success you need social proof.
It's a hard problem.
But to get those success you need social proof.
It's a hard problem.
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This. And it's not just Berlin, it's the whole Germany including banks - they will all tell you please make 1M, then we will lend you 1M with your 1M as a collateral. Simply forget it unless you managed to choose your parents wisely (i.e. rich or influential).
Expand to europe. Ot at least the Netherlands
could you clarify what you mean by Social Proof?
see my reply here, I hope it answers your question: https://news.ycombinator.com/item?id=13634338
> One thing in Berlin ist crucial: Social Proof
Then work on that. Or try to partner with someone who has that
How? Mingle. Go to meetings. Network "horizontally" (in your tech segment) and "vertically" (in your business segment).
One way you're not getting that is by being the foreigner just off the plane (or even there for a couple of years) that can't speak German
There's actually a funny series of bilingual books about "How to be Berliner/How to be German" that are kind of tongue-in-cheek but it gets on the overall mindset
And as someone said below, something like < 100k can be gotten from FFFs, so look onto that.
Then work on that. Or try to partner with someone who has that
How? Mingle. Go to meetings. Network "horizontally" (in your tech segment) and "vertically" (in your business segment).
One way you're not getting that is by being the foreigner just off the plane (or even there for a couple of years) that can't speak German
There's actually a funny series of bilingual books about "How to be Berliner/How to be German" that are kind of tongue-in-cheek but it gets on the overall mindset
And as someone said below, something like < 100k can be gotten from FFFs, so look onto that.
> Then work on that.
I disagree. If you don't already have Social Proof, then it takes a big investment to try getting it. I believe for 99% of all startup teams, the time is better spent by working on your product or acquiring customers.
Networking is not working. I have seen so many startups in Berlin, who had a good shot of making it, but who wasted time in "fundraising" or "networking" and therefore killed their business.
Now obviously to each his own and for some it might work. But I believe only very few people on very few occasions get something out of networking.
EDIT: added a paragraph
I disagree. If you don't already have Social Proof, then it takes a big investment to try getting it. I believe for 99% of all startup teams, the time is better spent by working on your product or acquiring customers.
Networking is not working. I have seen so many startups in Berlin, who had a good shot of making it, but who wasted time in "fundraising" or "networking" and therefore killed their business.
Now obviously to each his own and for some it might work. But I believe only very few people on very few occasions get something out of networking.
EDIT: added a paragraph
> Networking is not working. I have seen so many startups in Berlin, who had a good shot of making it, but who wasted time in "fundraising" or "networking" and therefore killed their business.
You're right. But even for a technical person, spending "24h" coding is too much
But ideally one person would be dedicated to coding, another, to the business/financial/fundraising side
You're right. But even for a technical person, spending "24h" coding is too much
But ideally one person would be dedicated to coding, another, to the business/financial/fundraising side
> One way you're not getting that is by being the foreigner just off the plane (or even there for a couple of years) that can't speak German
So, like most people in the Berlin startup scene?
So, like most people in the Berlin startup scene?
True.
The German start-up scene is pretty shitty.
Last time I checked about incubators or accelerators, most of the companies that work in that space were like "Oh no, we are not one of those, we do [insert some crap no founder needs] to help startups!"
Basically no one gives you money for anything if you don't know the right people and those who do want to own the company in full, which defeats the whole startup idea in the first place...
The German start-up scene is pretty shitty.
Last time I checked about incubators or accelerators, most of the companies that work in that space were like "Oh no, we are not one of those, we do [insert some crap no founder needs] to help startups!"
Basically no one gives you money for anything if you don't know the right people and those who do want to own the company in full, which defeats the whole startup idea in the first place...
Really? Then the whole seed funding must make no sense to you, mustn't it? ;-)
It makes a lot of sense for people with Social Proof.
Oh funny. Just like in Northern Europe (Finland).
I don't want to sound negative and I might be wrong in my assumptions but 50-75k sounds like something you can get from FFF (family, friends and fools) or supply it with your time. So the question for me is why an investor is going to put money in you if your family and friends don't do it.
A good idea to approach investor is through other startups, people that already know them. You can meet startups entrepreneurs in meetups, I am sure that Berlin is full of meet ups. And if you are not lucky this way you can always try to find them in internet and send them a cold email. A small email with 2-3 lines talking about your product, the money you want and for what it is.
I wish you good luck!
A good idea to approach investor is through other startups, people that already know them. You can meet startups entrepreneurs in meetups, I am sure that Berlin is full of meet ups. And if you are not lucky this way you can always try to find them in internet and send them a cold email. A small email with 2-3 lines talking about your product, the money you want and for what it is.
I wish you good luck!
This "why an investor is going to put money in you if your family and friends don't do it" question has been around for long in the startup 'hype' lingo, but I'm very curious if this has actually ever worked for founders that don't come from wealthy backgrounds, or from families with sizable savings (something that is a mirage for middle class families).
If you need 50-75K, perhaps it's better to just go for 100K€ (because things will not go as planned, as some investors will tell you) and, if you can build a solid case based on your business' performance, then reach out to angel investors, as 100K€ is an investment exactly in their ball park (unless your granny is sitting on 1M€ and can spare you 100K€).
PS: these things need proper planning, fundraising is a long process based on trust and personal impressions...so, contrary to what you read around the web, it's unlikely you'll have a lot of success (in Europe, at least) if you just show up of the blue to pitch your case and leave a business card behind, unless your revenue/orders are already solid and you have a realistic plan to multiply their volume/value.
If you need 50-75K, perhaps it's better to just go for 100K€ (because things will not go as planned, as some investors will tell you) and, if you can build a solid case based on your business' performance, then reach out to angel investors, as 100K€ is an investment exactly in their ball park (unless your granny is sitting on 1M€ and can spare you 100K€).
PS: these things need proper planning, fundraising is a long process based on trust and personal impressions...so, contrary to what you read around the web, it's unlikely you'll have a lot of success (in Europe, at least) if you just show up of the blue to pitch your case and leave a business card behind, unless your revenue/orders are already solid and you have a realistic plan to multiply their volume/value.
The question is, what you need 50k for.
For a office? Do it at home. For people? 50k is nothing. You get half an engineere for a year.
50-100k can mean that you have friends working with you, or it can be that you moved back to your parents to work fulltime on it.
It is such a small number in the business world, its strange that someone thinks that 100k can make a real difference.
For a office? Do it at home. For people? 50k is nothing. You get half an engineere for a year.
50-100k can mean that you have friends working with you, or it can be that you moved back to your parents to work fulltime on it.
It is such a small number in the business world, its strange that someone thinks that 100k can make a real difference.
> 50k is nothing. You get half an engineere for a year.
If you think a minute about that sentence, I think you'll realize that that depends on where those engineers live.
100K€ can allow 2-3 people to quit their jobs to work (for a year on low pay) on the features requested by their paying customers, or hiring an offshoring firm to build what they can't, or just having money to apply for government grants or cover real-world business expenses (provisional patents, technical infrastructure, lawyers, accountants, promotion).
If you think a minute about that sentence, I think you'll realize that that depends on where those engineers live.
100K€ can allow 2-3 people to quit their jobs to work (for a year on low pay) on the features requested by their paying customers, or hiring an offshoring firm to build what they can't, or just having money to apply for government grants or cover real-world business expenses (provisional patents, technical infrastructure, lawyers, accountants, promotion).
I don't know why this is downvoted when it's got a valid answer in it: strangers tend not to be good for getting investments that size. Either crowdfund or get friends & family to invest.
50% of people, in the US at least, have less than $1000 in savings. They don't have $10,000 to put into your startup.
Welp, then you oviously have talk to the other 50%!
a) we're talking about Berlin
b) Yes, this is extremely unequal; yes, it's much easier to do a startup from a privileged background. It's still the most common route to launching a business.
(Especially in Europe, people use home equity or secured loans for starting businesses quite a lot)
b) Yes, this is extremely unequal; yes, it's much easier to do a startup from a privileged background. It's still the most common route to launching a business.
(Especially in Europe, people use home equity or secured loans for starting businesses quite a lot)
I've been to Berlin twice now and was just there for 2 weeks last year in August. The startup scene in Berlin is very good, with lots of really talented designers and engineers. I'd say #1 or #2 behind Stockholm in terms of producing high quality companies these days.
Unfortunately the investment scene in Berlin is still very conservative. There are some angel investment programs out of Berlin (Google for Project Flying Elephant for example). Howerver I'd echo the sentiment that VC's and even angel's in Berlin operate like typically every other European investor, ultra conservative, little to zero speculation, and more of a bank than investment firm. Can't beat the US where you'll find risk takers with gobs of extra cash willing to bet on longshots, outcasts, and pet projects.
Unfortunately the investment scene in Berlin is still very conservative. There are some angel investment programs out of Berlin (Google for Project Flying Elephant for example). Howerver I'd echo the sentiment that VC's and even angel's in Berlin operate like typically every other European investor, ultra conservative, little to zero speculation, and more of a bank than investment firm. Can't beat the US where you'll find risk takers with gobs of extra cash willing to bet on longshots, outcasts, and pet projects.
If you would like to stay as independent as possible and keep your business in the long term, I would recommend to try with one of the currently ongoing EU investment programs - there is also one fond for smale-scale investment (like single person startups etc.) - definitely it is possible to get "free money" without high risk atm, but you must do the paperwork yourself:
http://www.berlin.de/sen/europa/europa-in-berlin/eu-foerderu...
http://www.berlin.de/sen/europa/europa-in-berlin/eu-foerderu...
"ERP-Gründerkredit Startgeld" might be what you are looking for.
https://www.kfw.de/inlandsfoerderung/Unternehmen/Gr%C3%BCnde...
https://www.kfw.de/inlandsfoerderung/Unternehmen/Gr%C3%BCnde...
Don't know about Berlin, but Munich/Bavaria has a pool of angels and family offices that they could connect you with: http://www.baystartup.de/finanzierungs-netzwerk/finanzierung...
I assume there's something like that in Berlin as well?
Disclaimer: have not tried this myself, no idea about the time needed or success probability.
Disclaimer: have not tried this myself, no idea about the time needed or success probability.
If you have enough time, it might be worth going somewhere like Betahaus [0] and meeting some people there. Every Thursday they have a breakfast event where different startups pitch what they're working on. Not always investors present, but certainly someone there could point you in the right direction or give you some ideas.
[0]: https://www.betahaus.com/berlin/
[0]: https://www.betahaus.com/berlin/
Here's my rule of thumb on fundraising.
1)You are an expert in building companies (you've done it before, can do it again) - this would typically be the case of repeat founders who've raised funds before
2) you are a domain expert, or have an idea which you think you are the right person to execute
For 1) as most people have pointed out things are a lot easier (relatively)
For 2) either you: a) have shown you are on the right track with customers (traction) b) prove you are the right team for the job
Again, a) makes it a bit easier to go to institutional investors. If b) the people who can be convinced of this would be the ones who know you and therefore trust you to do it (hence Friends and Family) Other option is people in the relevant industry who believe you know what you are doing (uncharitably, the Fools portion of FFFs)
From what you've told us so far, you are not seed stage. You are pre-seed as they like calling it in Europe. Institutional investors are a bad fit for this stage. Hence FFFs would be your best bet.
I would recommend accelerators, but very VERY few of them are actually worth it. But that does give you a leg up in the ecosystyem, by allowing your network to expand rapidly
1)You are an expert in building companies (you've done it before, can do it again) - this would typically be the case of repeat founders who've raised funds before
2) you are a domain expert, or have an idea which you think you are the right person to execute
For 1) as most people have pointed out things are a lot easier (relatively)
For 2) either you: a) have shown you are on the right track with customers (traction) b) prove you are the right team for the job
Again, a) makes it a bit easier to go to institutional investors. If b) the people who can be convinced of this would be the ones who know you and therefore trust you to do it (hence Friends and Family) Other option is people in the relevant industry who believe you know what you are doing (uncharitably, the Fools portion of FFFs)
From what you've told us so far, you are not seed stage. You are pre-seed as they like calling it in Europe. Institutional investors are a bad fit for this stage. Hence FFFs would be your best bet.
I would recommend accelerators, but very VERY few of them are actually worth it. But that does give you a leg up in the ecosystyem, by allowing your network to expand rapidly
Or (and I am not kidding or being sarcastic), think about going to Munich instead. For well-defined startups with a clear strategy, Munich is a decent location. It's not "cool" or "hipsterish" but instead focused, goal-driven and quite approachable in my experience.
With (50-75K) you are looking for angel investors. I have seen this going up all the way to 250k in Europe. Having well known angels invested will help you a long way to built that social proof everybody here is talking about.
There are Techstars programs in Berlin, if you make it in you get 20K+100K. Plus convenient intros with numerous investors as part of the program and comfy intros to hundreds of investors afterwards. You also learn a few other things about building a scalable business.
Check http://www.techstars.com/programs/berlin-program/ and https://www.metroaccelerator.com/
Check http://www.techstars.com/programs/berlin-program/ and https://www.metroaccelerator.com/
Where are you actually located? I don't think there is anything happening in Berlin on Friday. I suggest getting involved in your local startup community and heading to wherever the events are, when they are actually there. You wont have abny problem with investors if you actually get involved. What is your startup by the way?
There are a lot of people on here telling you it's not going to happen, but I'm going to assume you have a fundable idea and a track record in the domain needed to deliver your idea.
Submit your deck to angel syndicates. If it's good, they'll invite you to a pitch event. You can find plenty of advice online about what you need to cover in your deck.
A decent angel syndicate could easily do 50K-75K EUR and be able to follow on up to 1M EUR or so.
Submit your deck to angel syndicates. If it's good, they'll invite you to a pitch event. You can find plenty of advice online about what you need to cover in your deck.
A decent angel syndicate could easily do 50K-75K EUR and be able to follow on up to 1M EUR or so.
Could you be more specific than "angel syndicate"? Thank you.
We do have a track record of shipping in this domain.
We do have a track record of shipping in this domain.
Silly question: Are you German? Do you have an academic degree? I ask because then you have some options for a state sponsored fellowship.
No, we are not German. We are a distributed team and would like to make connections in Germany "the startup capital of Europe" but if this is impossible we will just bootstrap and then later raise money in America like everyone else.
I have read through this thread and I have concluded that it is unlikely for me to make meaningful connections at our stage, or any stage, in Europe.
For the people wondering, we are building a connected device that users want and which poops money for us and for users. Based on my research this is not a value proposition that is of interest to venture capitalists.
For the people wondering, we are building a connected device that users want and which poops money for us and for users. Based on my research this is not a value proposition that is of interest to venture capitalists.
One way is to ask this question on HN with a great deal of information. We don't know who you are, what you do, why you want money, or anything else that would convince someone to gift you their time.
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Hanging out at co-working spaces, incubators, startup meetups/tech meetups can often be a good place to start, regardless of local.
I found that a huge waste of time. Most of the time you'll meet people with the same problems as you have (not having the capacity nor the network to help you out). I would try to network directly through people and get as much warm intros as possible. If you can't get an intro to business angels, start with intros to CEOs, if you can't get that, start by climbing up the tree. If that means to start with "cold calls/mails"... then this is how you have to start. Just make it happen.
EDIT: I spent my last year on Berlin meetups and i consider myself as pretty outgoing, eloquent and we've traction. But it simply was not worth my time.
EDIT: I spent my last year on Berlin meetups and i consider myself as pretty outgoing, eloquent and we've traction. But it simply was not worth my time.
If you can avoid it, I would not raise this kind of amount in Berlin. Not worth the troubles.
You will probably find people to give you better advices at Betahaus in Kreuzberg.
Whats the product?
It is a high-end, connected, smart-home type hardware product that slowly poops bars of gold for its users while giving them great utility (which outsiders may or may not appreciate), and also poops bars of gold for us, and for our partners (without ad impressions or selling the information of our users). You could draw some parallels with Nest, but we would not like to leave our users stranded following an acquisition/sunsetting, so it is designed to continue indefinitely in such a scenario.