In this episode of the EUVC podcast, Andreas discusses with Christoph Klink, Partner at Antler.
He draws on his background as a Business Angel and Partner with McKinsey & Company. Before joining Antler, he served a range of leading technology organizations, amongst others in the mobility and transportation space, on disruptive strategy and building innovative business models. Building and nurturing top-talent organizations is one of his key passions and a great source of inspiration for Christoph.
Christoph is at the forefront of early-stage investing, and we're thrilled to have him share his insights with us. Christoph is investing out of Antler's first Continental European fund, which has an impressive 60M EUR AUM. What sets Antler apart is their focus on investing and supporting startups from "day zero" to Series C.
In today's episode, we're diving deep into a topic that Christoph has studied recently: The Rise of the European Technical Founder. Christoph will share some insights from their recent report, and why Antler is doubling down on this area and how it could be a game-changer for European tech.
Watch it here or add it to your episodes on Apple or Spotify 🎧
Private funds spend ~4 hrs on avg. analyzing every single PortCo update. That's 800 hrs per year for a fund with 50 startups in their portfolio (50 PortCos x 4 updates/year x 4 hrs)!
How about 0 hours?
Synaptic’s PortfolioIQ is your single source of truth for portfolio data, auto-updated from decks, excels, forms, and emails. ZERO work for you or your PortCos.
Chapters:
00:02 Meet Christoph Klink from Antler Continental Europe
00:13 Antler's Investment Focus and Portfolio
00:44 The Importance of Technical Founders in Europe
03:12 Christoph's Recent Study on Technical Founders
04:15 Challenges in Building European Tech Giants
06:54 The Rise of Technical Founders in Europe
21:30 Antler's Approach to Founder Team Composition
26:09 The Role of Generalists and Specialists in Startups
28:53 Finding the Right Co-Founder
29:13 Recap of Core Learnings
29:48 European Tech Giants Dilemma
29:54 Rise of Technical Founders
31:14 Meet Christoph: The Investor
33:23 Antler's Work Ethic and Culture
36:48 Challenges of Building Antler
38:24 Olympic Medalists vs. Unicorn Founders
40:35 Top Lessons in Venture Capital 47:16 Advice for Emerging VCs
✍️ Guest show notes:
We believe in giving you our guests' thinking directly and unaltered. Therefore, no changes, no AI, no nothing has been done to the following sections.
Deep Dive #1: The need for technical founders in Europe (based off Antler Europe's New Tech Founders 2024)
We invest very early, typically pre-product, usually pre-revenue, not pre-team though
Therefore, the founding teams are the most important factor when we take investment decisions and there is overwhelming evidence that they are the key driver for success
We thus conduct regular research to better understand the traits of successful founders - we recently looked into the stories of ~170 founders of tech giants, 800+ unicorn founders, 60.000 founders who applied to our residencies and 400+ portfolio companies
We recently looked into one of the longest standing dilemmas in European tech - the question of why Europe struggles to produce true tech giants - the Nvidias, Googles, Microsofts of this world
There is a lot of possible explanations: public funding, bureaucracy, languages and cultures, growth equity, …
All of these are true - yet, there is another possible explanation: and it is a shortage of really strong technical founders that are working on cracking the really tough to solve technical challenges
Our research yielded three main findings
Tech giants are (almost exclusively) built by technical founders and the US is far ahead in backing technical founders
10 most valuable US companies (majority < 30 years) - 96% technical
10 most valuable EU companies (majority >40 years) - 70% technical
(Too) few emerging European category leaders have been built by technical founders - in particular over the last 2 decades
top 20 unicorns US vs EU —> 70% US vs 30% EU technical founder share
of the “fallen unicorns” only 14% of founders were technical
clear evidence that technical skillset is correlated with breakout companies
The tide is changing as Europe backs more and more technical founders and it pays off in higher valuations and larger funding rounds
last 1.5 years are very different - first time more than half of EU unicorn founders are technical
building true deeptech companies - Mistral, Synthesia, Pigment, …
in our dealflow it is even more drastic (21 vs 23)
4x technical founders, 8x AI and data profiles
fastest growing roles are data leaders, engineering and development leads and head of growth
Change is paying off - companies with technical founders raise 50% more on 60% higher valuations
What drives this change?
Restructuring and layoffs (4x vs 9x)
The beginning of a new technological cycle driven by AI
The person behind the investor
Generalist more than specialist - have always opted for working broad rather than narrow, covering multiple sectors, business models, geographies
Focus on people - have always taken most decisions based on the people I enjoyed working with
Supporting others to excel - always been the one who tried to help others be the best version of themselves - both the role of a consultant as well as the role of an investor are similar here
Few things come without hard work - whatever you try to achieve is typically hard to achieve and needs your full dedication, fundraising, selling, building a world class product
You have to sacrifice things if you want to fully focus - the day only has 24 hours and you cannot excel everywhere at all times, you need to chose and often it will be your family or friends who are not seeing that much of you if you are building something.
Three biggest learnings in venture
There are tons of possible learnings to draw. If I had to just pick three - given my focus on founders in the earliest phase of building their businesses - I would pick three people centric and first-year learnings.
Europeans have supported business model innovation and ops excellence businesses for too long - we need to back technical founders in order to build true technical innovation and period-defining companies. Many investors (including myself) are generalists - and not technical - we need more people with a deeper understanding and appreciation for cutting-edge technology.
At the same time, strong commercial founders are incredibly scarce. Most people believe that “there is an abundance of generalists” - which is true. But people who can go deep on a problem, dream up a vision, design a product and commercialize it are incredibly rare.
Founders often think about how they will win “the war in the long term”, i.e. how their company could compete in 10 years from now (in a static competitive environment), yet they often do not focus sufficiently on the initial wedge they will build and drive in - how do they win the first 10, 100, 1000 customers?
Advice for young people in the VC industry.
Go for it - venture and VC it is a great place to be, lots of smart people, high energy, close to the earliest stages of exciting innovation, everyone is moving fast, super dynamic, great and friendly ecosystem of co-investors
Figure out whether you want to be an investor or builder - find out what makes you happy and in what kind of role you are really strong. Typically things that we are good at make us happier and the other way around - being an investor means staying on the sidelines and supporting on a broad and diversified basis, being a founder means being in the limelight, pouring all energy into just one venture and going deep into the tunnel of building just one thing.
As investor - figure out what your preferred investment stage is - pre-seed investing is very different from growth stage investing, if you care about deep analytics and crunching numbers, opt for a later stage. If you thrive in uncertainty, love to embrace risk and take people-centric decisions, move earlier.
As a generalist early stage investor: Be humble - great founders will always know more about their business than we as investors will typically do. An investor will never be successful if its portfolio is not - thinking “founders first” is key.
Tips & tricks for emerging VCs fundraising.
First of all, we are still very young ourselves, so I am not sure I should be giving advice to others. At the same time we have had the pleasure of already going through (pretty much) a full market circle.
A few things that come to mind when reflecting on our early fundraises:
Run a differentiated strategy for the fund - too many go after the same dealflow with the differentiation of “offering more than capital” but have a hard time actually articulating this. In particular during tougher times, standing out becomes even more important.
Prepare for the intensity of the fundraise - just like for a startup, fundraising is not “funraising”. The less track-record one has, the more hustle has to go into the fundraise. Some leads you will never hear from, some will drop at the oddest points, some will convert but it will be an intense ride.
Start where you are strongest and leverage own network - many great things have been built on the back of friends who became great supporters in the early days.
Keep going until its over - never assume that any opportunity is going to close until it has and play the “numbers game”.
Build momentum, pro-actively engage prospects, get them to meet the interesting people - your portfolio.
Most counterintuitive learned in venture.
The “first customer” is typically not the hardest one to get.
Join the EUVC Community
Looking for niche, high-quality experiences that prioritize depth over breadth? Consider joining our community focused on delivering content tailored to the experienced VC. Here’s what you can look forward to as a member:
Exclusive Access & Discounts: Priority access to masterclasses with leading GPs & LPs, available on a first-come, first-served basis.
On-Demand Content: A platform with sessions you can access anytime, anywhere complete with presentations, templates and other resources.
Interactive AMAs: Engage directly with top GPs and LPs in exclusive small group sessions — entirely free for community members.
🧠 Upcoming EUVC masterclasses
Advanced small-group sessions that take you from good to great. Lectured by leading GPs, LPs & Experts.
VC Portfolio Management: Capital Deployment and Reserve Planning
📅 Tue, September 24 | 4:00 PM - 6:00 PM CET | Lecturer: Anubhav Srivastava, Tactyc
Venture Debt: Structuring & Deal Terms
📅 Tue, October 8 | 11:00 AM - 1:00 PM CET | Lecturer: Hemal Fraser-Rawal
Benchmarking Session for GPs & LPs
📅 TBD - preregistration open now | Lecturer: To be announced 🤫
Got ideas or requests for future topics to cover? Let us know here.
📺 Virtual events coming up
Mastering the sell-side of secondaries | 📆 Tue, Sep 3, 2024, 3:00 PM - 4:00 PM (CET) | Register here
This session will delve into the fundamentals of the secondaries market, distinguishing between direct and fund secondaries, and identifying key stakeholders such as employees, founders, LPs, GPs, and intermediaries. Alberto will share his sophisticated buyer process, including his quantitative scorecard approach and detailed due diligence. Learn how to prepare assets for sale, understand valuation techniques, navigate legal and regulatory considerations, and stay ahead of market trends.
Investing and scaling in Portugal and beyond | 📆 Wed, Sep 4, 2024, 3:00 PM - 4:00 PM (CET) | Register here
Delve into key topics such as navigating the Portuguese investment landscape, empowering women-led startups, and scaling businesses beyond borders with global best practices. Learn about pioneering innovation in tech companies and be inspired by real-life success stories of Portuguese scale-ups. Engage directly with industry leaders, gain cutting-edge strategies, and understand how global trends intersect with local opportunities.
GP Roundtable: Leveraging AI in Portfolio Monitoring & Management | 📆 Mon, Sep 9, 2024, 3:00 PM - 4:00 PM (CET) | Register here
This roundtable is a must for GPs looking to get an edge using AI. By tapping into AI-driven analytics and predictive modeling, VCs can unlock hidden trends and streamline their operations. Plus, tackling early risk assessment can save portfolios from tanking 💥. It's about staying ahead in a cutthroat world.
🗓️ The VC Conferences You Can’t Miss
There are some events that just have to be on the calendar. Here’s our list, hit us up if you’re going, we’d love to meet!
Nordic LP Forum & TechBBQ | 📆 11 - 12 September | 🌍 Copenhagen, Denmark
How to Web | 📆 2-3 October | 🌍 Bucharest, Romania
WVC:E Summit 2024 | 📆 7-8 October | 🌍 Paris, France
North Star & GITEX Global | 📆 14 - 18 October | 🌍 Dubai, UAE
Invest in Bravery | 📆 21th of October | 🌍 Kyiv, Ukraine
0100 Conference Mediterranean | 📆 28 - 30 October | Milano, Italy
GoWest | 📆 28 - 30 January 2025 | 🌍 Gothenburg, Sweden
GITEX Europe 2025 | 📆 23 - 25 May 2025 | 🌍 Berlin, Germany
Antler's Christoph Klink on the need for technical founders in Europe with insights from Antler's recent report