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1Mby1M Virtual Accelerator Investor Forum: With Harald Nieder of Redalpine Venture Partners (Part 2)

Posted on Saturday, Apr 20th 2019

Harald Nieder: The other thing that’s important is obviously, the network, in particular for the early-stage investing. Network is very important. Keep in mind that in geography, we’ve been active more than 15 years, which means that we’ve had a lot of time to build our network.

For example, we’ve been connected in Berlin long before Berlin has become the hub that it is now. When you go to other countries or where we want to focus elsewhere, we really need to build our network there first.

That’s why we take advantage of the countries where our network is the strongest. But it’s not strictly restricted to that. So we’re looking at the neighboring countries also. But if you look at the portfolio so far, most of the views have come from Germany and Switzerland.

What’s very important for us and where we think there’s a lot of value is when you, as a venture capitalist, can facilitate the exchange among portfolio companies. If we look at Berlin, for instance, we’ve got a lot of portfolio companies there.

We do workshops there. It’s very easy to get people together which is much more difficult if you have to get them together from various corners of the world.

Sramana Mitra: What about stage? What’s comfortable stage-wise? When you say seed and series A, what’s the definition of seed for you? What level of validation are you looking to see?

Harald Nierde: What we like to look at as a guidance is market entry. So when you have a company or a startup that has just entered the market, that’s the sweet spot around which we like to invest. That also means that you can get some early metrics.

But I like to make the point that we like to keep a lot of flexibility around that entry point. Sometimes it’s a case which is very suitable for us. It’s even before market entry. There are no metrics there. We also sometimes invest and try to do a small ticket. Sometimes we would try to wait.

So, we have a lot of flexibility in there which kind of translates into the ticket size that we do. The first ticket rounds are between €500,000 and €3.5 million. That tells you that we have quite a big range.

Sramana Mitra: Would you invest in a concept-stage venture?

Harald Nierde: No.

Sramana Mitra: You would like to see some validation.

Harald Nierde: Yes, some validation. But that’s an interesting point because validation can mean a lot of different things. The most immediate validation is if you have the first metrics. We use the products that you will be developing in the market that you will be working in.

But validation could also mean that the founding team must have worked together in the past and has built very successful products in the past which could be related to the projects that they are currently working on. So I would keep the validation quite broad.

But ideally, we would like to see some early metrics and then we can support that company in its early stage growth phase. This is where we have our experience of supporting our companies.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Harald Nieder of Redalpine Venture Partners
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