Questions we get asked all the time
Here are some answers to the most important questions we get asked from founders and private investors.
- At what stage do we invest? What’s our usual ticket size?
btov is an early stage venture capital firm. We invest in companies in Seed and Series A financing rounds with tickets from EUR 1'000’000 to EUR 5’000’000. Our average ticket size amounts to EUR 1’000’000. We are prepared to invest significantly in follow-on financing rounds in later stages of your company.
- What is our industry or sector focus?
We have two investment teams. One is focusing on digital tech and the other on industrial tech. The digital tech fund invests in B2C- and B2B-oriented businesses in the fields of commerce, marketplaces, mobile and software. The industrial tech fund places its focus on deep tech, e.g. in industry 4.0, resource efficiency, industrial AI, IoT, enterprise software, cyber security, as well as medtech.The private investor network follows an opportunistic investment strategy, i.e. we invest in tech-companies from various industries that have the potential to generate a return of x10 on the invested capital.
- What is our geographic focus?
We are focused on Europe. With offices in Berlin, Munich, Luxembourg and St.Gallen we have an emphasis on the German-speaking area (DACH). We also invest outside of Europe on a case-by-case basis, if we have a trusted, local lead investor.
- How active are we as a firm?
We close 30-40 investments per year, of which approximately 30% are new investments and 70% are follow-on investments of our existing portfolio. In 2017, we managed 51 transactions and invested a total of EUR 53m in start-ups.
- How much capital does the firm manage?
As per 2018, btov has EUR 375m in AuM across btov venture capital funds, managed partner funds and the private investor network. So far we have raised 5 btov funds and 3 managed partner funds.
- What does the investment process look like?
After we received your materials, we will evaluate your fit with our investment strategy. We then arrange a first meeting or phone call to get to know each other better. If the impression of this initial contact is positive, we follow-up with a second meeting or phone call to focus on areas where we still have questions and to introduce btov in greater detail. Sometimes a different set of people from our investment team will be present in the follow-up. If all the prior steps are passed, we make some reference calls and discuss in our weekly meeting with the investment team to come to a decision. The duration of the process ranges from a couple of weeks to a few months. In any case, you will receive feedback from the investment team.
- Can the btov funds, the managed partner funds, and the members of the private investor network only invest together in my company?
btov’s venture capital funds and the private investor network can invest independently from each other.
Most of our investments are involving one of our funds and selected members of the private investor network. Hence, if applicable you will be introduced to our team that manages our private investor network to coordinate a simultaneous engagement of selected members of the network. We invest as a syndicate, i.e. we pool individual investments of our funds and members, so that btov appears in one or two positions on the capitalization table of your company. The interactions with the btov investors will be steered by btov. Most of our members have built companies themselves, including CortalConsors, HolidayCheck, Realtime Technology, or Scout24.
- How does btov support portfolio companies?
We have participated in the development of successful tech companies. If demanded, we will aggregate all our resources – ranging from our personal networks to sector-specific expertise – for you to follow in the footprints of prior success stories.
- How should I get in touch with btov?
We value referrals from people we like. However, good ideas can come from everywhere so do not hesitate to reach out to us via our contact website to pitch us your company.
- What do I have to do to receive investment opportunities from btov and network with btov members?
To receive information about investment opportunities from btov and network with members of the btov network you have to (1) meet the requirements of an accredited investor according to the SEC and (2) become a btov member.
- How can I become a btov member?
Interested investors can apply for a btov membership if they meet the basic requirements of accredited investors according to the SEC.
- What is btov looking for in a member?
We need active members. Our members share promising investment opportunities with btov, bring their industry expertise to start-up discussions in our network, co-invest regularly in presented start-ups and ascribe to the principles of the honorable businessman (“ehrbare Kaufmann”).
- What costs can a btov investor expect?
The btov membership fee is effectively a retainer fee and amounts to EUR 4’000 p.a. The management fee charged on investments introduced to members by btov amounts to 2% p.a. (max. over five years) on the invested capital. The retainer fee can be offset against the management fee. The success fee (carried interest) amounts to 20% after the investor’s investment has been paid back in full plus a 6% p.a. hurdle rate. For investments made available through btov but not supported by btov, we charge a one-time introduction fee of 5.0% on the invested amount.
- What services does btov offer?
Firstly, access to about 30-40 investment opportunities per year, pre-selected by our fund investment teams or members of the network and picked from a total deal-flow of 3’000 investment opportunities which btov screens per year. Secondly, invitations to btov's exclusive events hosted in Germany and Switzerland. Thirdly, co-investments with btov funds and other btov members steered by btov along investment processes which have been optimized over the last 18 years. btov strives to enable the investor to focus completely on the investment decision and not on the paperwork.
- Why does btov invest in syndicates?
btov invests as a syndicate, i.e. it pools individual investments of our members and our funds, so that btov appears as one single shareholder on the capitalization table of a company. The main advantage of this structure is that it facilitates communication with existing shareholders and external stakeholders for the founders, e.g. because availability is not an issue and negotiations can be managed with fewer people at the table. The syndicate structure does not imply that btov takes any decision on behalf of investors. Each investor decides independently on shareholder matters.
- What are lead investors and co-investors?
Your degree of involvement in each investment depends on your role as an investor. Two options are possible:
- Lead investor – the lead investor is very actively involved. He/She maintains close contact with the company and represents the btov syndicate throughout the entire lifespan of the startup. The lead investor may take a seat on the board of directors. The lead investor is expected to have a comprehensive understanding of the target company’s business, and to have a significant stake of the total btov syndicate, about 20%. If the investment is exited successfully, btov will share up to 50% of its carried interest with the lead investor.
- Co-investor – A co-investor invests alongside the lead investor. He/She is less directly involved in the specific investment, and may have limited or no know-how regarding the target company’s business. The co-investor can communicate with the founder team through the lead investor and btov. The co-investor decides independently on shareholder matters and instructs the lead investor and btov accordingly.
- Do I get involved in the investment process?
As a co-investor, you will meet founder teams in person at btov events or virtually on our online platform. You and the other btov investors will be involved in the investment process, i.e. in the due diligence and the structuring of the term sheet. The interactions with the founder team will be steered by the lead investor and btov. You will be invited to quarterly or semi-annual update calls to discuss monthly reporting updates with the lead investor.
- To what extent is it possible for me to contribute my know-how?
If you take the role as a lead investor, you might take a seat on the board of directors of the portfolio company and interact regularly and very directly with the founders.
As a co-investor, you will receive monthly reporting updates and invitations to participate in quarterly or semi-annual lead investor calls. Should you wish to contribute your knowledge, experience and network to the young company, your support will be channeled through btov and the lead investor.
- What is the average ticket size per investor and per investment?
Generally, a btov investor invests between EUR 50’000 and EUR 2’000’000 per financing round. The amount depends on the capital requirements of the company and the investment appetite of the investor. Individual companies that fall under btov’s investment strategy are usually raising between EUR 1’000’000 and EUR 20’000’000 per round.
- How active is the private investor network?
btov has built an international investor network with 250 private investors, of which 200 are btov members and 50 are Circle of Investors members.
btov closes 30-40 investment transactions per year (51 in 2017), of which 30% are transactions with new portfolio companies and 70% are transactions with existing portfolio companies. In 2017, the btov group invested EUR 53m in start-ups. We invest primarily in Europe with an emphasis on the German-speaking area (DACH). We also invest outside of Europe on a case-by-case basis, if we have a trusted, local lead investor.
- Can I become a btov member without investing in btov funds?
- Yes. You can either become a btov member focussing on direct investments in start-ups, or an investor in one or more funds managed by btov, or you may choose to invest in a btov fund (for the purpose of risk diversification) and do selective direct investments in start-ups in parallel. We are very flexible and will try to accommodate your preferred role. We award investors in btov funds with a 2-year membership in the btov private investor network.