As part of our “Founder Insights” series where we get to know local startups and initiatives shaping the Frankfurt ecosystem, we recently sat down with Pitch Club Founder Stefan Maas. In this interview, Stefan shares with TechObserver his personal entrepreneurial journey, his perspectives on investors backed ventures and why you should implement your minimum viable product as soon as possible.
Pitch Club is all about presenting your idea to the public, raising money from investors and ultimately becoming a successful and profitable venture. Let’s turn the tables a little bit : Stefan, how would you pitch Pitch Club? Tell us a few words about yourself, how the idea started and what is Pitch Club’s role in the Frankfurt startup ecosystem?
Short intro of myself: I studied in Germany, UK and Spain – MSc in Int. Management -, while working for an investment holding focusing on Eastern Europe. Afterwards I started working for Private Equity (P/E) companies and later became Managing Partner of a P/E boutique in Frankfurt am Main. There, I identified, financed and co-founded investment targets, structured them and finally developed and executed tailor-made exit strategies. Therefore, I am familiar with both the startup/founder and investor sides. In early 2014, a good friend of mine had just started his venture and was searching for investment opportunities. We started with the first edition of the classical Pitch Club (startups vs. investor). As the money-raising opportunities, especially for early-stage startups, were very limited at the time, we came up with the idea of an informal and unconventional invite-only event, to which investors and startups have to apply in order to guarantee the quality required. We convinced many strong partners like Deutsche Bank, Beiten Burkhardt and Brain-artist to get on board and have been working with for many years now. So far, the metrics confirm our approach: 15 editions, 155 preselected startups, +25 Mio. € funding, 40 % funding ratio.
With the traditional Pitch Club, we are acting as facilitators and helping to partially fill the financing gap. On the other hand, we foster innovation as we match innovative startups and corporates vice versa. In addition, we hold workshops/keynotes (e.g. pitch content, financing and strategy workshops for Bosch, Deutsche Bank, PwC, KfW, Accenture, Blackprint Booster, Climate-KIC and many others), bringing our experience and expertise to both the corporate world and startup community. Besides, Pitch Club offers complementary services for startups, investors and corporates (e.g. scouting/sourcing of startups for corporates and investors, company builder for startups). In 2017 we adapted the traditional Pitch Club concept to recruiting with the “Pitch Club Developer Edition” (PCDE). PCDE, which was carved out as a spin-off in 2018, is a reverse recruiting event with 20 editions a year in whole Germany/Europe. At PCDE companies – MNCs like Daimler, SAP or PwC, SMEs like Zooplus, Trumpf or Basler and startups like Campanda, Ce-lonis or TeamViewer – pitch their IT jobs in front of pre-selected software developers in unconventional locations like bars and clubs. Due to our excellent access to developers and companies and the high market demand, we also match actively appropriate candidates with companies. Finally, a platform digitizes and scales the whole process.
In the future, more startups will be created in Frankfurt. To sustain that growing number, the region will have to increase the available early stage investments to keep up with that growth. How do you see the private and public investments in the Rhein-Main region in comparison with other German cities/metropolitan regions?
From my point of view the FRM region offers theoretically the perfect funding opportunities for startups, as Frankfurt is one of the leading financial centres worldwide. However, many of the established finance players are not very keen to invest in startups in such an early-stage. Still a significant number of seed-/early-stage startups is funded by High-Tech Gründerfonds (HTGF), which is subsidized and initiated by the German government and supported by some of the big German MNCs. Consequentially, there is substantial room for improvement and we see many CVCs coming into the sector as the region is home to a lot of flourishing industries, which have the challenge to master digitization, many of them with the support and a strategy of financing into startups. If you compare the FRM ecosystem to Berlin, which is undoubtedly the number one startup hub, and also look at Munich and Hamburg, FRM lacks unicorns. These act as role models locally and help attract investors from abroad. Due to TechQuartier and many other initiatives, the situation has already enhanced, but still a lot of work to do in order to exploit the enormous potential. For instance, tax deductions for investors, but also subsidies/grants and the accessibility to it could be improved significantly, if we consider the public role.
From your perspective now as a founder and from your previous work experience in Private Equity, what are the main characteristics that an investor backed idea should have?
- Timing – you can always find window of opportunities in specific industries, which are dependent on time and thus, enable abnormal returns and opportunities due to market momentum. If founders hit that crucial point in time, the opportunity to succeed increases tremendously.
- Depending on the investor type, scalability (especially for VCs) and the ability to execute the business model are highly decisive factors.
- Team – nothing new, but complimentary team skills, outbalancing strengths and weaknesses, are one of the key success factors. As the founders usually have to iterate many times, especially in the seed/early-stage phase, endurance becomes one of the major skills.
The strategy of the region is to raise the number of startups in the next five years and becoming an international entrepreneurial hub, but this cannot be achieved without leveraging the entrepreneurial mindset and ambition of international students, immigrants and of course competing with the attractiveness of the corporate world. Are there any words that you like to share with those who are not sure yet to take the leap and start their own venture?
I cannot promise you success with your own startup/venture, but for sure it will be a lot of fun along the way! And a rollercoaster of emotions for free, if you start your own venture and see it (hopefully) growing. Lessons learned on the way are indispensable for everyone, even though not everyone is made to be (and needs to be) an entrepreneur with the specific mind-set necessary. And finally: Just do it and start working and implementing your idea yesterday, but do not forget to test your hypothesis with a first MVP (minimum viable product) as soon as possible on the market/target group!
Next Pitch Club #15 Female Edition on 12th of September 2018 at the TnT-Palais in Frankfurt am Main.
To participate at the invite-only Event of the Pitch Club as an investor, you need to apply. Since spots are in high demand and capacity is limited, a timely application is recommended.
Further Information under: https://www.thepitchclub.com/de/investoren/. As a startup founded by woman, an application under https://www.thepitchclub.com/de/startup/ until the 2nd of September 2018 is possible.
Next Pitch Club Developer Edition #19 on the 22nd of November in Frankfurt am Main
If you as a software developer or IT-Professional would like to take part at the invite-only event (free drinks and food included), you can apply under: www.pcde.io/?q=tq.
If you would like to take part at the afterwork party starting at 8pm, you can apply under: https://pcde.io/pcde-afterwork/