Matt Ciolek and Maja Schaefer have decided to invest from 10X Founders. With the help of the network of entrepreneurs, the Polish company wants to expand to the USA.
Dusseldorf Venture capital firms have to come up with more and more ideas to win the best deals. On the one hand, they should at best see investment opportunities ahead of their international competitors. On the other hand, they have to convince the founding teams that they can use their contacts and experience to help the respective start-up company particularly well in its further development. In both cases, the Munich-based venture capital firm 10X-Founders relies on its entrepreneurial network and invests in its community.
With a new network approach, 10X-Founders wants to strengthen its investor profile and the start-up ecosystem in Europe. A year ago, the team collected 160 million euros from more than 200 entrepreneurs, and now the initiators are speaking publicly about their concept for the first time: “We want to give entrepreneurs more incentives to give something back,” says investor Jan Reichelt, who worked with Mendeley and Korpernio built and sold two internet companies himself.
In addition to the entrepreneurs involved in the fund, 10X-Founders has built up a network of 50 so-called fellows who invest independently in start-ups. These include Meta (formerly Facebook) chief growth officer Javier Olivan, series founder Gloria Seibert and British angel investor David Rowan, who was also the founding editor-in-chief of Wired magazine’s English edition.
These fellows should be motivated to share promising investment opportunities with 10X founders. To this end, the team has come up with a special mechanism for co-investments. “When our fellows invest with us, we guarantee them twice the upside,” says Jan Reichelt. That means: 10X-Founders double their return.
Top jobs of the day
Find the best jobs now and
be notified by email.
As soon as 10X-Founders decide to co-invest with one of their fellows, the venture capital firm would add the fellow’s investment to their own contribution, explains Reichelt. The following case could occur with a very young company: The Fellow invests 10,000 euros, 10X-Founders invests 500,000 euros and adds another 10,000 euros, for which the Fellow agrees to the potential return.
Investors and founders are networked based on data
Conversely, for the more than 200 entrepreneurs who have invested in the 10X Founders Fund, the return is somewhat weaker. But the concept met with approval right from the start, says 10X founding partner Felix Haas: “The entrepreneurs understood that this is how we get access to the best deals.”
Even well-known international investors such as Accel and Sequoia are now working with talent scouts to gain access to young European companies. The German venture capital firm Earlybird has set up a special fund in which university professors are supposed to make investment proposals.
With a new network approach, 10X-Founders wants to strengthen its investor profile and the start-up ecosystem in Europe.
10X-Founders also wants to score with the founders with its network approach. The respective expertise of the entrepreneurs in the fund and the angel investors are now systematically catalogued, as well as typical investment sums and investment frequency of the fellows. In this way, the right investors and founders can be brought together using software.
A full-time employee takes care of the network, says Haas: “We invest a lot in the fellows, organize exchanges during joint trips or expert discussions about artificial intelligence and crypto topics.”
>>> Read here: Billion valuation, but no business model? There is so much substance in Germany’s unicorns
Even if 10X-Founders do not want to invest, but find a business idea exciting, contact should be established between angels and founders. “Such a network has the potential to strengthen the entire ecosystem in Europe, instead of just siphoning off money for lenders as a venture capital company,” says Jan Reichelt.
10X-Founders has already won over 28 entrepreneurial teams in the past twelve months. The first portfolio companies include Fernride from Munich, which is developing a solution for remote control of trucks, the Berlin company Legal OS, which helps to create legally secure contracts, and the Polish chatbot company Zowie.
More: A start-up is founded in Germany every 157 minutes – which sectors are booming now