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On democratizing venture and PE with Steffen Pauls, founder of Moonfare & 7GC

An inspiring discussion that we're more than happy to announce. Join us for a discussion with Steffen Pauls on private equity and more.

Patricia Borlovan

Feb 29, 2024

Transcript

No transcript...

Today, we have Steffen Pauls with us. Central to our conversation with Steffen today is his journey building Moonfare and revolutionizing private markets.

In addition to that, Steffen is also a Founding Partner of 7GC, a €400M Growth venture fund based in Berlin, and founded the firm in 2015 to bring growth investment opportunities to a network of key decision-makers, industrial families, and entrepreneurs in Europe.

7GC is investing out of Fund II with a total €400M AUM and an established portfolio of 15 companies and notable investments, including Jackpocket, Jio, Hims & Hers. Steffen focuses on Sars, FinTech, and AI.

We couldn’t give a better intro to Steffen than the one below, so check it out and surf around the excellent Deal Talk podcast which Steffen hosts when you’re there 👀

On the move? Listen to the eu.vc pod on Apple & Spotify 🎧

Scroll on ⏬ For the chapters & core learnings 🧠

Table of Contents | Scroll ⏬ for all the insights 👀

Episode chapters.
Steffen’s journey into venture.
Take a stance.
Advice to 10-year younger self.
Top tips for emerging VCs who are fundraising.
Most counterintuitive learning.
Uncommon belief.

Scroll on ⏬ For the chapters & core learnings 🧠

This episode is brought to you in partnership with — Zero One Hundred.

A unique and curated setting for private equity and venture capital LPs and GPs from across Europe and the rest of the world to unite and build meaningful relationships.

📍Amsterdam | 16 APR - 18 APR 2024

Check it out

Chapters:

00:03:14 - From Private Equity to Venture Capital
00:06:16 - Moonfare's Global Expansion Journey
00:09:14 - The Importance of Patience in Investing
00:15:15 - The Future of AI Regulation
00:18:12 - Europe's Struggle to Catch Up in AI
00:21:02 - The Imbalance of Data Ownership
00:33:36 - Democratizing Private Equity Investment
00:36:38 - Investment Pre-Selection Process
00:39:39 - Moonfare: An Innovation in the Market
00:42:31 - The Different Players in the Industry
00:45:36 - Moonfare: Building a Community
00:48:43 - Democratization of Private Equity
00:51:44 - Learning from the Challenges of Starting Moon Fare
00:54:49 - The Importance of Culture in Building Great Companies
00:58:04 - Trends in Investor Behavior
01:01:22 - The Importance of Independence and Speaking Up
01:04:26 - The Dangers of Being Cyclical
01:07:33 - The Value of University Education

Steffen’s journey into venture

My journey into venture really goes back to my time when I started working as Managing Director & Head of Germany at Kohlberg, Kravis & Roberts, also known as KKR.
KKR is known as one of the pioneers in private equity, and one of the largest buyout firms out there. In the early 2000s, we as a firm at KKR thought more and more about entering the technology sector. When I joined in 2004, I had to make sure we think holistically about tech and joining the new world of digital.
And after almost a decade with KKR, around 2015 I wanted to come up with something new, and this is the moment when I founded 7GC, a growth fund that helps US portfolio companies with their expansion in Europe.

Take a stance

“We are at a point in time where, in social media, too much of human discourse is owned by few people. We need to fundamentally change that. We need to come back to having a discourse that is owned by the public rather than the private,”

Says Colin Daymond Hanna, Partner at Balderton.

I love this quote, and I want to move it and address it also from the perspective of artificial intelligence.
AI has an immense potential to make the world a better place. However, when you think about what it does, and the fact that is dependent on data, and that data comes from private individuals like you and me, from our consumers, we have to realize that there’s no free lunch.
We all give our data away, in return for the services that we are using, on the internet or other places. In reality, this data is in the hands of many companies, and for me, the concern, and this is a major topic that has to be figured is whether through regulation or other means can have an impact.
It’s David against Goliath.
I believe this industry will be highly regulated and at some point we’ll have certain players working collaboratively with government in their countries to make the best use of AI.

Q: What advice would you give your 10 year younger self?

Take out of your vocabulary “I wish, I had …”.
Don’t be afraid to get out of your comfort zone.
Leave the mainstream and find your edge.
Speak up, even if you are not asked.

Q: What are your top tips for emerging VCs across Europe who are fundraising?

Develop a compelling and differentiated investment thesis / theme
Define why you are best positioned to win in this field
Get an anchor, someone who really believes in you and your team
Be anti-cyclical
Act and think like owners

Q: What’s the most counterintuitive thing you’ve learned in venture?

You have to lose money in order to make money.
Failure is a crucial step towards success.
Traditional thinking tells us to avoid failures with all means, this is wrong.
Successful entrepreneurs and investors embrace failure as a necessary part of the innovation process, recognizing that it can provide valuable insights, pave the way for future success, and build resilience.

Q: Your uncommon belief.

Going to University is not only unnecessary but even more so value destroying in the AI age.

Zero One Hundred Conference Europe 2024 | 🗓️16-18 of April

Book your ticket for the upcoming 0100 Conference Europe, a unique setting for private equity and venture capital LPs and GPs to unite, in Amsterdam from April 16th to 18th.

Get your ticket here

Geopolitical conflicts, climate change pressure, and valuation normalization top investors’ agenda for the upcoming Zero One Hundred Conferences Pan-European LP/GP event in Amsterdam.

Organized by Zero One Hundred Conferences, the event is expected to gather over +700 LPs and GPs from key industry players such as Bain Capital, Permira, EQT, 500 Global, Alven, Esas Holding, The Carlyle Group, Adams Street Partners, Aegon Asset Management, and Oddo BHF, to mention some.

0100 Conference Europe will have separate tracks for PEs and VCs as well as exclusive networking side events like VIP Dinner, LP Breakfast, or workshops tailored for Family Offices, Institutional Investors, and Service Providers, with industry expert Steve Balaban, CFA.

Who should attend: LPs, GPs, and SPs interested in the European PE/VC landscape.

What you will get: Access to a unique and curated network of investment professionals from the most relevant players coming from Europe and the rest of the world, where +80% of the attendees are decision-makers from top firms.

Hear firsthand from the most influential voices across Europe from April 16 th to 18 th at Leonardo Royal Hotel Amsterdam.

Zero One Hundred Conference organizes LP-GP networking events for PE & VC players in various regions in Europe with a global outreach. In the last 8 years, they have organized 48 events with 1500+ speakers, 6000+ investors, and 11500+ attendees. The locations of these events were Amsterdam, Berlin, Luxembourg, Dublin, Copenhagen, Rome, Vienna, Tallinn, Limassol, Prague and Bratislava.

The European VC Awards are about community and collaboration, and your involvement is key. Nominate before February 28th, and you’ll join in our raffle for a free ticket to SuperVenture. Your nominations will help shape the awards & ensure they truly represent the best of European VC.

Participate in The European VC Awards

👋 Upcoming in-person events we’re hosting

There’s nothing we like better than getting Europe’s best and brightest together around good food, drinks and conversations that go truly deep.

Fund Modelling Workshop & Mixer | 11th of March | 🌍 London, UK | Join waitlist.

Fund Modelling Workshop & Mixer | 5th of June | 🌍 Berlin, Germany | Join waitlist.

European VC Awards | 4th of June | 🌍 Berlin, Germany | Get tickets.

Upcoming EUVC events

📺 Virtual events we’re hosting

From time to time, a podcast is just not enough. Check out our roundtables and live events below.

Investing & scaling in Romania and beyond | March 18th, 12-1 PM | Register here.
Speakers: Bogdan Iordache, Founding Partner at Underline | Karolina Mrozkova, General Partner at Credo Ventures | Dan Mihăescu, Founding Partner GapMinder | Jakob Stein Investor at Creandum | Enis Hulli, Founding Partner at 500 Emerging Europe | Marius Istrate, ex-UI Path CPO & Chairman at TechAngels