Latest / Deep Tech Germany – AI, Robotics & Frontier Innovation by Startuprad.io™ / Blue Forest Ventures: Commercializing Deep-Tech Science — Max Narr
Transcript
- WEBVTT 1 00:00:00.160 --> 00:00:03.899 Hello, and welcome, everybody. This is Joe from Startuprad.io, your 2 00:00:03.899 --> 00:00:07.440 Startupradio podcast, YouTube blog, and radio station from Germany, 3 00:00:07.440 --> 00:00:11.115 Austria, and Switzerland. Today, I would like to welcome 4 00:00:11.495 --> 00:00:14.475 Max again. Hey. How you doing? Hey, Joe. How are you doing? 5 00:00:15.175 --> 00:00:18.580 I'm doing great. Thank you. People 6 00:00:18.800 --> 00:00:22.160 may know you as the cofounder of 7 00:00:22.160 --> 00:00:25.895 Endozane that I interviewed recently, but we're 8 00:00:25.895 --> 00:00:29.115 here because you kind of shifted careers? 9 00:00:29.814 --> 00:00:33.510 I mean, I think that's a lot to say. Endosane is still very 10 00:00:33.510 --> 00:00:37.110 much up and running. And, as a matter of fact, in 11 00:00:37.110 --> 00:00:40.710 December, we closed our last financing round. We were kind of 12 00:00:40.710 --> 00:00:44.445 discreet about it because, we don't really profit from a lot of 13 00:00:44.445 --> 00:00:48.285 media attention at Endosane, and, that's why we're not 14 00:00:48.285 --> 00:00:51.500 searching for it. However, as you might remember, 15 00:00:51.640 --> 00:00:55.020 Endosane is focused on creating 16 00:00:55.640 --> 00:00:58.700 new drugs for the treatment of psychiatric and neuropsychiatric 17 00:00:59.320 --> 00:01:02.825 diseases. And as such, we conduct clinical 18 00:01:02.825 --> 00:01:06.265 trials in order to obtain FDA and EMA 19 00:01:06.265 --> 00:01:10.060 approval. And now these trials and why 20 00:01:10.060 --> 00:01:13.680 these studies are running, my personal involvement 21 00:01:14.060 --> 00:01:17.354 as nonscientific founder, 22 00:01:17.895 --> 00:01:21.594 cofounder of of Endosain, is somewhat limited. 23 00:01:22.054 --> 00:01:25.575 So, my my primary duty is always to 24 00:01:25.575 --> 00:01:29.310 create the infrastructure, the setting, and primarily the, 25 00:01:29.710 --> 00:01:32.850 the financing needed in order to conduct studies. 26 00:01:33.365 --> 00:01:37.045 Once that has happened, my involvement is is not needed 27 00:01:37.045 --> 00:01:40.725 to the same extent as before. So we're in this situation, which 28 00:01:40.725 --> 00:01:44.000 allows me to to, also follow, 29 00:01:44.460 --> 00:01:48.060 other avenues I'm very interested in and leave the day to day 30 00:01:48.060 --> 00:01:51.755 operations to the scientific, cofounders of mine, mainly 31 00:01:51.755 --> 00:01:54.814 Catherine or Leiter. I see. And 32 00:01:55.435 --> 00:01:59.280 we are talking because one of those venues you've been talking 33 00:01:59.280 --> 00:02:03.040 about is setting up a new VC fund in 34 00:02:03.040 --> 00:02:06.805 Berlin. You have announced this, I I do 35 00:02:06.805 --> 00:02:10.565 believe, a few weeks ago? Yes, indeed. Very excited about 36 00:02:10.565 --> 00:02:14.290 that. We founded Blue Forest Ventures. We're 37 00:02:14.290 --> 00:02:17.970 based in Berlin. However, we invest, across 38 00:02:17.970 --> 00:02:21.330 Europe and selectively in North America and Southeast 39 00:02:21.330 --> 00:02:24.835 Asia. Uh-huh. I see. And, of course, the first important 40 00:02:24.835 --> 00:02:28.295 question everybody has on on their minds, why Blue Forest? 41 00:02:28.915 --> 00:02:32.130 Now I could tell you, like, the the beautiful 42 00:02:32.270 --> 00:02:36.030 marketing story that's that's, I could make up around this, which 43 00:02:36.030 --> 00:02:38.945 is that, I like the 44 00:02:39.405 --> 00:02:43.005 metaphorical image of, individual trees 45 00:02:43.005 --> 00:02:46.730 representing our portfolio companies that do stand alone 46 00:02:46.730 --> 00:02:50.430 but are all interconnected with their roots, below the ground. 47 00:02:50.730 --> 00:02:53.950 However, the truth of the matter is that it's a combination 48 00:02:54.170 --> 00:02:58.005 of one of my favorite strategical frameworks, which is 49 00:02:58.005 --> 00:03:01.845 Blue Ocean, which is about, having a different 50 00:03:01.845 --> 00:03:05.610 perspective on your strategy and trying to think outside the 51 00:03:05.610 --> 00:03:09.370 box. And, the second part, so the 52 00:03:09.370 --> 00:03:12.110 blues from that, and the second part, the forest, 53 00:03:13.205 --> 00:03:16.424 is, from, my favorite 54 00:03:16.565 --> 00:03:20.150 algorithm for predicting future, for 55 00:03:20.150 --> 00:03:23.610 predicting basically future events, which is random forest. 56 00:03:24.470 --> 00:03:28.315 And since this venture capital fund, and we'll we'll talk about this 57 00:03:28.315 --> 00:03:31.835 in a couple of minutes, I'm sure, is, heavily data 58 00:03:31.835 --> 00:03:35.375 driven and heavily, driven by the attempt 59 00:03:35.670 --> 00:03:39.370 to use data to predict the future as much as possible. 60 00:03:40.390 --> 00:03:44.090 This felt very adequate and and fitting to to a name. 61 00:03:44.445 --> 00:03:47.425 For, the people now following us, 62 00:03:48.605 --> 00:03:52.120 we first may get out of the way that you're early stage 63 00:03:52.120 --> 00:03:55.880 investor. That means people can pitch you a pre seed seed. Are you 64 00:03:55.880 --> 00:03:59.400 also doing series a? Typically, we wouldn't. We 65 00:03:59.400 --> 00:04:02.875 might in a series a, because, obviously, 66 00:04:03.095 --> 00:04:06.694 we do save up a a certain amount of of 67 00:04:06.694 --> 00:04:10.380 our total funds in order to be able to 68 00:04:10.380 --> 00:04:14.220 do follow on investments. So, if we're already 69 00:04:14.220 --> 00:04:17.839 invested through precede and seed financing in a company 70 00:04:18.305 --> 00:04:21.904 and we feel for whatever reason we want to participate in the 71 00:04:21.904 --> 00:04:25.585 series a, we can. However, that's certainly not our 72 00:04:25.585 --> 00:04:29.400 sweet spot. What what was what was the core vision, the 73 00:04:29.400 --> 00:04:33.020 idea behind it, why you've set up 74 00:04:33.080 --> 00:04:36.585 this fund? Is there, was 75 00:04:36.585 --> 00:04:40.104 there, like, one event, one minute where you thought, 76 00:04:40.104 --> 00:04:43.865 oh, that struck me. That's why I decided to set it up or was 77 00:04:43.865 --> 00:04:47.590 it a gradual process? I mean, I think 78 00:04:47.590 --> 00:04:51.110 there's element of both in there. I think at the core, 79 00:04:51.110 --> 00:04:54.795 there's a fascination with 2 things. On the one 80 00:04:54.795 --> 00:04:58.475 hand, the fascination with science and with 81 00:04:58.475 --> 00:05:02.315 the scientific attempt to solve the problems that we 82 00:05:02.315 --> 00:05:06.130 face. So we haven't mentioned that so far, but, Blue 83 00:05:06.130 --> 00:05:09.270 Forest is focused on deep tech companies 84 00:05:09.650 --> 00:05:13.015 solely. Joe, companies that come from a 85 00:05:13.015 --> 00:05:16.795 scientific or engineering background. Now this fascination 86 00:05:17.095 --> 00:05:20.510 of the scientific approach is paired with the 87 00:05:20.510 --> 00:05:23.870 specific stage that these companies we're looking in, 88 00:05:24.110 --> 00:05:27.490 into are in, which is pre seed and seed, 89 00:05:27.745 --> 00:05:31.585 which means really the 1st institutional money they 90 00:05:31.585 --> 00:05:35.205 typically get. So you have a 91 00:05:35.345 --> 00:05:38.530 a university project, a PhD project, 92 00:05:39.150 --> 00:05:42.590 where a team comes together because they have an 93 00:05:42.590 --> 00:05:46.085 idea to commercialize a scientific solution that 94 00:05:46.085 --> 00:05:49.445 they've discovered. And now they 95 00:05:49.445 --> 00:05:52.825 might become part of an accelerator program or an incubator 96 00:05:52.965 --> 00:05:56.810 program. They might get a little bit of grant funding, but 97 00:05:56.810 --> 00:06:00.490 there comes the stage where they need to sort of leave the nest, so to 98 00:06:00.490 --> 00:06:03.390 speak, and receive the first external financing. 99 00:06:04.705 --> 00:06:08.405 And this is us. We want to help these companies 100 00:06:08.625 --> 00:06:12.305 with that leap. And in my experience, and I can tell that 101 00:06:12.305 --> 00:06:15.750 from my own experience having founded a biotech before, 102 00:06:16.690 --> 00:06:20.470 this first step outside of the protected 103 00:06:20.690 --> 00:06:24.375 environment of the of this academic background into 104 00:06:24.914 --> 00:06:28.455 the commercial world is one of the most difficult 105 00:06:28.514 --> 00:06:32.349 steps to achieve at a start up. And specifically, to 106 00:06:32.349 --> 00:06:35.729 obtain, the the amount between 250,000 107 00:06:36.509 --> 00:06:40.245 a1000000 is very difficult because there are not a lot 108 00:06:40.245 --> 00:06:43.865 of VCs that are ready to invest ticket sizes 109 00:06:44.325 --> 00:06:47.990 that small. And so there's there's the fascination of 110 00:06:47.990 --> 00:06:51.830 the complexities of the situation on the one hand. And on the 111 00:06:51.830 --> 00:06:55.405 other hand, maybe more towards the, oh my god. 112 00:06:55.405 --> 00:06:59.245 Now we can do it. The one thing that always 113 00:06:59.245 --> 00:07:02.990 bothered me in early stage venture capital is that 114 00:07:03.470 --> 00:07:07.229 the conflict you have between having to look at 100 115 00:07:07.229 --> 00:07:10.750 and 100 of companies in order to find the companies you're interested 116 00:07:10.750 --> 00:07:14.405 in, on the one hand. And your fund 117 00:07:14.405 --> 00:07:17.865 size is limited, so the budget you have 118 00:07:18.485 --> 00:07:22.200 through your management fee is limited. And so there's this 119 00:07:22.200 --> 00:07:25.800 conflict of you don't really have enough money to do a 120 00:07:25.800 --> 00:07:29.525 proper job in evaluating all the companies you look at. 121 00:07:30.005 --> 00:07:33.525 So you have these VCs that do what what's called spray and 122 00:07:33.525 --> 00:07:37.044 pray, and they just invest 50,000 in 123 00:07:37.044 --> 00:07:40.360 whatever company basically has half way of a PowerPoint 124 00:07:40.500 --> 00:07:44.259 presentation in a certain segment, and they just hope that one of them will make 125 00:07:44.259 --> 00:07:47.905 it. And there is the other sort of segment, and I 126 00:07:47.905 --> 00:07:51.425 I that that's not an attack on anybody, but that's like, 127 00:07:51.425 --> 00:07:55.045 okay. I've come from this world of venture capital. Now 128 00:07:55.310 --> 00:07:59.150 I am some sort of a guru and through sitting across from 129 00:07:59.150 --> 00:08:02.990 somebody, I can somehow feel whether they will have what it takes to 130 00:08:02.990 --> 00:08:06.794 be successful. I don't really think that that's interesting. 131 00:08:06.935 --> 00:08:10.555 Even if it was true, it wouldn't be scalable or repeatable. 132 00:08:11.570 --> 00:08:15.330 So the moment that really brought my partners 133 00:08:15.330 --> 00:08:18.785 and I to this moment of, yes, we can do it, 134 00:08:19.105 --> 00:08:22.545 is basically the possibilities that 135 00:08:22.545 --> 00:08:26.145 arose through robot process automation as 136 00:08:26.145 --> 00:08:29.810 in AI and the AI tools that are available now 137 00:08:30.430 --> 00:08:33.870 in the combination with the computation cost that 138 00:08:33.870 --> 00:08:37.515 basically went down dramatically over the last years, which means 139 00:08:37.515 --> 00:08:41.355 that the kind of mathematical modeling that 140 00:08:41.355 --> 00:08:44.795 was reserved to hedge funds and large funds in the 141 00:08:44.795 --> 00:08:48.460 past is now achievable for 142 00:08:48.460 --> 00:08:52.220 small funds as well. And that means that we can save 143 00:08:52.220 --> 00:08:55.905 so much time and so much effort, on the 144 00:08:55.905 --> 00:08:59.445 human resources side that we can do a proper job evaluating 145 00:08:59.825 --> 00:09:03.665 those companies. Right? And so, I'm sorry for the 146 00:09:03.665 --> 00:09:07.330 for the little bit long answer to that question, but the 147 00:09:07.330 --> 00:09:11.089 reality is it's a combination of all these factors that led us to be like, 148 00:09:11.089 --> 00:09:14.710 okay. Now is the right time. We're ahead of the curve with this approach, 149 00:09:15.154 --> 00:09:18.214 and and we want to do this. Let me quickly 150 00:09:18.915 --> 00:09:22.649 structure my thoughts here. So, at at first, I'm not 151 00:09:22.649 --> 00:09:26.329 trying to make light of the situation because an investment the first 152 00:09:26.329 --> 00:09:29.769 VC investment may have a life 153 00:09:29.769 --> 00:09:33.535 changing impact, hopefully, for 154 00:09:33.535 --> 00:09:36.975 the better. But it sounded kind of 155 00:09:36.975 --> 00:09:40.579 like you are the business body of a more 156 00:09:40.579 --> 00:09:44.339 scientific oriented founder team. Would that be appropriate to 157 00:09:44.339 --> 00:09:47.955 say? I think that's not making light of it at all. I think that's, 158 00:09:49.635 --> 00:09:52.695 yeah, I think that's appropriate to say. I I typically, 159 00:09:53.635 --> 00:09:57.255 say them a little bit different way, which is we are also translators. 160 00:09:57.720 --> 00:10:00.700 Right? We translate, because 161 00:10:02.360 --> 00:10:06.140 very heavily scientific founding 162 00:10:06.200 --> 00:10:09.935 teams with typical scientific 163 00:10:10.235 --> 00:10:13.755 backgrounds, on the one hand, don't really speak the 164 00:10:13.755 --> 00:10:17.600 same language, so to speak, as the investors world 165 00:10:17.600 --> 00:10:21.300 on the other. And, in a way, 166 00:10:21.760 --> 00:10:25.154 there is almost a translation needed from a complex 167 00:10:25.295 --> 00:10:28.894 solution to a compelling equity story. And we 168 00:10:28.894 --> 00:10:32.735 believe that there is lots of good projects and lots of good 169 00:10:32.735 --> 00:10:36.339 ideas and even good teams with high potential 170 00:10:37.040 --> 00:10:40.399 where the ideas never get funding just because they 171 00:10:40.399 --> 00:10:43.815 were uncapable of translating the idea 172 00:10:43.875 --> 00:10:46.775 into a shape and form that's digestible 173 00:10:47.555 --> 00:10:51.270 for most VC investors. And, the 174 00:10:51.270 --> 00:10:54.650 other question I had is where or did the 175 00:10:54.870 --> 00:10:58.595 statement or explanation called as you like? Because, 176 00:10:59.475 --> 00:11:03.235 you are aiming for around €60,000,000 in your 177 00:11:03.235 --> 00:11:06.910 fund. And, the people are calculating in their head, well, they can 178 00:11:06.910 --> 00:11:10.690 make up to 60 investments, but that's not necessarily 179 00:11:10.990 --> 00:11:14.830 true. As you said, you may participate in a series a round. 180 00:11:14.830 --> 00:11:18.585 So that means you have assigned some of the money 181 00:11:18.805 --> 00:11:22.565 for the initial investments and then maybe 182 00:11:22.565 --> 00:11:26.130 half or even larger part for the so called follow-up investments 183 00:11:26.270 --> 00:11:30.050 that you still have, a relevant stake, a big stake 184 00:11:30.350 --> 00:11:33.895 in the Startupradio that are doing success for the 185 00:11:33.895 --> 00:11:36.395 fund raising instead of growing successfully. Right? 186 00:11:37.335 --> 00:11:40.715 Absolutely. So, we're aiming to have a portfolio 187 00:11:41.015 --> 00:11:44.380 size of around 40 companies, which means that we're, 188 00:11:44.860 --> 00:11:48.640 aiming to to, invest in 40 initial 189 00:11:48.700 --> 00:11:52.415 companies and have the rest as follow on. So now if I 190 00:11:52.415 --> 00:11:56.195 tell you that our average ticket size will be between 500 191 00:11:56.495 --> 00:12:00.060 and a1000000, right, you can do the math very quickly that 192 00:12:00.060 --> 00:12:03.740 we save up up to 40% to do follow 193 00:12:03.740 --> 00:12:07.254 on investments. And that's that's that's a 194 00:12:07.254 --> 00:12:11.014 fairly standard ratio, specifically at early stage 195 00:12:11.014 --> 00:12:14.790 to to have some dry powder to do follow ons. We've 196 00:12:14.790 --> 00:12:18.329 been talking about ticket size. We've been talking about the stage. 197 00:12:18.550 --> 00:12:22.069 But we have not talked about which industries, which 198 00:12:22.069 --> 00:12:25.845 sectors are you investing in. And little disclaimer, if 199 00:12:25.845 --> 00:12:29.605 there would be only AI, it would be too boring and we wouldn't have an 200 00:12:29.605 --> 00:12:33.110 interview here. You are talking about 201 00:12:33.490 --> 00:12:36.870 deep tech, but very, differentiated. 202 00:12:37.330 --> 00:12:40.850 What kind of investments you are looking for 203 00:12:40.850 --> 00:12:44.695 here? Look. I think let's start by talking about what deep tech 204 00:12:44.695 --> 00:12:48.455 really means because as AI and deep tech feels like 205 00:12:48.455 --> 00:12:52.220 this almost label that people slap 206 00:12:52.220 --> 00:12:55.920 on onto something, and nobody really knows what it means. So 207 00:12:56.060 --> 00:12:59.454 at the core of it, deep tech just refers to 208 00:12:59.454 --> 00:13:03.154 technological solutions for complex scientific 209 00:13:03.214 --> 00:13:06.894 or engineering problems. Right? So now I understand that that's 210 00:13:06.894 --> 00:13:10.550 very broad, and it is broad. Right? And and we're not 211 00:13:10.550 --> 00:13:14.150 we're not trying to say it's not, it's it's not a very broad 212 00:13:14.150 --> 00:13:17.685 field. Now there's we invest across a 213 00:13:17.685 --> 00:13:21.465 very large part of that field for two reasons. 214 00:13:21.685 --> 00:13:24.265 1st, the 215 00:13:25.400 --> 00:13:28.620 there's every venture capital fund, every investor 216 00:13:29.080 --> 00:13:32.700 has to ask themselves the question of what do they bring 217 00:13:32.920 --> 00:13:36.305 to the table for the companies. Right? And, 218 00:13:36.625 --> 00:13:40.464 a lot of of VCs specialize in certain fields and 219 00:13:40.464 --> 00:13:44.245 certain industries, and so they can bring a lot of industry and field 220 00:13:44.330 --> 00:13:47.630 specific knowledge to those companies. However, 221 00:13:47.850 --> 00:13:51.530 that's not what we primarily claim. Of course, 222 00:13:51.530 --> 00:13:55.345 we can bring that through our network of advisors and through our network 223 00:13:55.345 --> 00:13:59.105 in the industry. But our primary asset that 224 00:13:59.105 --> 00:14:02.839 we bring to the table is in the translation, is in 225 00:14:02.839 --> 00:14:06.519 everything that's not specific to the deep tech field 226 00:14:06.519 --> 00:14:10.120 we're talking about. Because these founding teams 227 00:14:10.120 --> 00:14:13.865 often struggle with most of the other 228 00:14:13.865 --> 00:14:17.084 issues that are not related to their specific technological 229 00:14:17.384 --> 00:14:21.079 invention, right? They struggle with creating a proper business 230 00:14:21.079 --> 00:14:24.920 plan, with assessing product market fit, with, with 231 00:14:24.920 --> 00:14:28.300 building the structures, with building the teams that are necessary 232 00:14:28.519 --> 00:14:32.285 to achieve their goals. And that's where we we come in 233 00:14:32.285 --> 00:14:35.725 and we can really help them. And so this is true for all of 234 00:14:35.725 --> 00:14:38.850 of of the subsegments of Deep Tech. 235 00:14:39.329 --> 00:14:42.690 Now the only reason that this is 236 00:14:42.690 --> 00:14:46.165 possible is because of the stage we're investing in. 237 00:14:46.324 --> 00:14:50.165 Right? If we talked about the series a company, that wouldn't be 238 00:14:50.165 --> 00:14:54.005 possible. We would need to specialize because the problem that 239 00:14:54.005 --> 00:14:57.400 a series a company faces has nothing to do 240 00:14:57.400 --> 00:15:01.080 anymore or very little to do anymore with creating a proper business 241 00:15:01.080 --> 00:15:04.555 plan. They're past that. Right? So in a way, the 242 00:15:04.555 --> 00:15:08.395 stage we have selected allows us to be very broad 243 00:15:08.395 --> 00:15:12.130 in our investment approach. And the second part is 244 00:15:12.130 --> 00:15:15.090 that the sectors we don't invest in. Right? And and, 245 00:15:16.530 --> 00:15:20.345 it pains me to say, but drug development, the the company 246 00:15:20.405 --> 00:15:24.105 I cofounded would not fall into our investment scheme. 247 00:15:24.325 --> 00:15:26.905 Right? And, this has something to do with 248 00:15:27.690 --> 00:15:31.450 drug development and all the the deep 249 00:15:31.450 --> 00:15:34.190 tech fields that are heavily regulated. 250 00:15:35.795 --> 00:15:39.575 One of the biggest risks they are facing is of regulatory 251 00:15:39.955 --> 00:15:43.635 nature. And the regulatory risk is very 252 00:15:43.635 --> 00:15:47.220 difficult to hedge outside of being very 253 00:15:47.220 --> 00:15:50.520 specialized in the field. Right? Because we have the scientific 254 00:15:50.660 --> 00:15:54.395 side, you have the, you know, what we bring to the table, the financial, 255 00:15:54.395 --> 00:15:58.075 the business side, we can handle these 2. Right? But if there is 256 00:15:58.075 --> 00:16:01.515 the complexity, the added complexity of a very, very 257 00:16:01.515 --> 00:16:05.200 complicated regulatory process that is, 258 00:16:05.980 --> 00:16:09.440 highly specific to the specific field we're looking into, 259 00:16:09.660 --> 00:16:13.255 that's something we cannot handle on top of it. Joe, unfortunately, 260 00:16:13.875 --> 00:16:17.555 drug development would fall into a category of company we cannot 261 00:16:17.555 --> 00:16:20.935 invest in. So my understanding is that drug development, 262 00:16:21.430 --> 00:16:25.190 especially if you want to do it on an impact 263 00:16:25.190 --> 00:16:28.870 on a medical scale, is very, very expensive. We do 264 00:16:28.870 --> 00:16:32.655 have this frequently in our news that goes up to the billions. 265 00:16:33.195 --> 00:16:36.895 That is so. And the the money is not our primary 266 00:16:36.955 --> 00:16:40.415 concern. Although, I mean, we we have we wouldn't participate 267 00:16:41.180 --> 00:16:44.700 significantly in the total needed funding. But our primary 268 00:16:44.700 --> 00:16:48.080 concern is that you need to be an expert in the regulatory 269 00:16:48.300 --> 00:16:51.555 environment in order to be able to handle these kind of investments. 270 00:16:52.415 --> 00:16:55.875 Talking about investments, what kind of 271 00:16:55.935 --> 00:16:59.630 criteria do you use to 272 00:16:59.630 --> 00:17:03.230 evaluate your investment? Because as we've been talking, it's 273 00:17:03.230 --> 00:17:05.490 very specific. It's very scientific. 274 00:17:07.544 --> 00:17:11.304 You you just cannot say, well, it's an ecommerce shop. They do it as 275 00:17:11.304 --> 00:17:14.764 much as this. This is the multiplier of public listed company. 276 00:17:14.929 --> 00:17:18.609 That is what I can use. That just doesn't work. It it's 277 00:17:18.609 --> 00:17:22.450 way more complex than that. Right? That is true, and that's a 278 00:17:22.450 --> 00:17:26.224 very, very good question. And I 279 00:17:26.464 --> 00:17:29.985 it's gonna be a little bit of a longer answer, but but bear with me. 280 00:17:29.985 --> 00:17:33.665 There's there's certainly and and that's something I hear a lot 281 00:17:33.665 --> 00:17:37.299 when talking about, this with other early 282 00:17:37.299 --> 00:17:40.920 stage venture capitalists that tell me, well, Max, 283 00:17:41.265 --> 00:17:44.865 it's it's nice that you say that you're data driven. It's nice that you say 284 00:17:44.865 --> 00:17:48.625 that you want to evaluate the companies more in a 285 00:17:48.625 --> 00:17:52.320 more in-depth way. But these companies are so 286 00:17:52.320 --> 00:17:56.080 young. There is no data on these companies that is available for 287 00:17:56.080 --> 00:17:59.299 you to evaluate. And I'm always saying, well, 288 00:18:00.165 --> 00:18:03.465 that's only true really in part. Right? 289 00:18:03.765 --> 00:18:07.605 Because, yes, there is no data about the companies or not much 290 00:18:07.605 --> 00:18:11.320 data about the companies in terms of financial data, that 291 00:18:11.320 --> 00:18:14.540 doesn't mean that there is not a lot of other 292 00:18:15.000 --> 00:18:18.700 alternative data that's available around the markets, 293 00:18:18.985 --> 00:18:22.684 around the scientific field, around the founders themselves. 294 00:18:22.825 --> 00:18:26.605 Right? And we're talking beyond the track record of the founders. 295 00:18:26.745 --> 00:18:30.450 We're talking about the background of the 296 00:18:30.450 --> 00:18:34.290 founders, even as far as the credit scores of the 297 00:18:34.290 --> 00:18:38.005 founders. Right? Those are all information 298 00:18:38.005 --> 00:18:41.525 that exists out there. And now before creating a 299 00:18:41.525 --> 00:18:45.370 discussions I don't want to create here, I'm not saying that the good or 300 00:18:45.370 --> 00:18:49.049 bad credit score is either good or bad. Right? But I'm saying it's 301 00:18:49.049 --> 00:18:52.525 a variable we're looking into to feed 302 00:18:52.525 --> 00:18:56.285 into our model that evaluates the companies we invest 303 00:18:56.285 --> 00:18:59.850 in. Now the the 304 00:18:59.850 --> 00:19:03.610 general criteria is still a 305 00:19:03.610 --> 00:19:07.290 lot of the times the same across VCs and it's the 306 00:19:07.290 --> 00:19:10.684 same for us. Obviously, we need to see a 307 00:19:10.684 --> 00:19:14.125 certain market potential. Right? We need to see a 308 00:19:14.125 --> 00:19:17.740 certain value that's created through the solution 309 00:19:17.880 --> 00:19:21.640 that the company presents. Because somebody needs to 310 00:19:21.640 --> 00:19:25.475 pay for it in future. Right? And people will be willing to 311 00:19:25.475 --> 00:19:28.695 pay for it in function of the economical 312 00:19:29.075 --> 00:19:32.720 benefits that the solution generates for them. Right? If I 313 00:19:32.720 --> 00:19:36.559 can solve a big scientific problem, but if it's if 314 00:19:36.559 --> 00:19:40.320 it's not reflected in a big economical problem for 315 00:19:40.320 --> 00:19:44.115 somebody, right, nobody will pay for it. Because 316 00:19:44.115 --> 00:19:47.895 the person still needs to make more money because 317 00:19:48.035 --> 00:19:51.495 he employs he or she employs the solution that's presented. 318 00:19:53.049 --> 00:19:56.509 So a quick example. Right? 319 00:19:56.809 --> 00:20:00.110 I was working with this company in the field of photonics. 320 00:20:00.655 --> 00:20:04.275 Photonics now, is a specific 321 00:20:05.215 --> 00:20:08.995 subsegment of electrical optical modulation, 322 00:20:09.970 --> 00:20:13.730 which means the translation of an optical signal 323 00:20:13.730 --> 00:20:17.170 into an electrical signal. Right? I mean, optical signal, glass 324 00:20:17.170 --> 00:20:20.265 fiber, you know, all kinds of information, 325 00:20:21.045 --> 00:20:24.885 but our computers or our devices still work with 326 00:20:24.885 --> 00:20:28.679 electrical signals. Electrical signals. Right? And so the modulator, which is the 327 00:20:28.679 --> 00:20:32.120 core of every computer chip really, translates the 328 00:20:32.120 --> 00:20:35.585 optical signal into an electrical signal. We've 329 00:20:36.284 --> 00:20:39.745 inadvertently a lot of people talk a lot about this because, 330 00:20:40.365 --> 00:20:44.100 this is really the field, where all the energy is 331 00:20:44.100 --> 00:20:47.400 lost and all the, heat is created, for instance, 332 00:20:48.340 --> 00:20:52.100 because of the energy that's lost in this translation. So 333 00:20:52.100 --> 00:20:55.395 now a big step would be to solve 334 00:20:55.934 --> 00:20:59.155 to to create a more efficient and more, 335 00:21:00.255 --> 00:21:04.060 capable modulator. Right? So if you 336 00:21:04.060 --> 00:21:07.820 were to solve this issue, the problem you would be 337 00:21:07.820 --> 00:21:11.420 solving is immense. And the 338 00:21:11.420 --> 00:21:15.105 companies, the intels of this world, and 339 00:21:15.805 --> 00:21:19.565 other chip manufacturers of this world would be paying would be willing to pay 340 00:21:19.565 --> 00:21:22.870 a lot of money for somebody to solve that issue. 341 00:21:23.250 --> 00:21:27.090 Now, you might solve some other issue right 342 00:21:27.090 --> 00:21:30.745 around that. It's a huge market. However, 343 00:21:31.284 --> 00:21:34.825 if the problem that you solve is not significant 344 00:21:35.044 --> 00:21:38.024 enough for the people to change their process, 345 00:21:38.780 --> 00:21:42.539 then you will never be successful with it. Right? If you if if the 346 00:21:42.539 --> 00:21:46.015 gain in efficiency would be, I don't know, 5 percent, 347 00:21:46.015 --> 00:21:48.915 then Intel is not going to rebuild its $1,000,000,000 348 00:21:49.535 --> 00:21:52.895 Gigafactory in order to adapt to it. It's just not good 349 00:21:52.895 --> 00:21:56.730 enough. Right? So you you always need to understand that 350 00:21:56.790 --> 00:22:00.230 there needs to be a market, that's ready to pay for the 351 00:22:00.230 --> 00:22:03.924 innovation you've created. That some people call 352 00:22:03.924 --> 00:22:07.765 that product market fit, however you wanna 353 00:22:07.765 --> 00:22:11.440 call it. Right? You need to be aware of the 354 00:22:11.440 --> 00:22:14.800 market and the that somebody needs to pay for the 355 00:22:14.800 --> 00:22:18.560 innovation. And, a lot of people underestimate that that's 356 00:22:18.560 --> 00:22:22.195 not a view of right now. That's 357 00:22:22.195 --> 00:22:26.035 a view of in the amount of time 358 00:22:26.035 --> 00:22:29.360 that you need to get your product ready. So if you're still in the r 359 00:22:29.360 --> 00:22:32.960 and d stage, it's irrelevant what the market looks like right 360 00:22:32.960 --> 00:22:36.735 now. What's relevant is what the market will look like in 361 00:22:36.735 --> 00:22:40.495 5 years when your product will be ready. Right? And so this 362 00:22:40.495 --> 00:22:44.100 is something where where I think it's possible to 363 00:22:44.100 --> 00:22:47.940 start to understand why it's so important to be data driven. Because the data 364 00:22:47.940 --> 00:22:51.720 driven allows us to make much better predictions 365 00:22:51.940 --> 00:22:55.505 of future market developments and future product developments 366 00:22:56.044 --> 00:22:59.725 in order to assess not what's the market right now, but what will the 367 00:22:59.725 --> 00:23:03.350 market be when the product's ready. And the second 368 00:23:03.350 --> 00:23:06.810 big aspect is, okay, this is the goal where you want to go. 369 00:23:07.350 --> 00:23:11.015 What are the resources and capabilities that you need to 370 00:23:11.015 --> 00:23:14.555 achieve that? Right and this is when it comes to the team 371 00:23:14.935 --> 00:23:18.295 and obviously the team and this is every VC is gonna sell that this is 372 00:23:18.295 --> 00:23:21.470 not the reinvention of the wheel and I'm not claiming it to be. The team 373 00:23:21.470 --> 00:23:25.090 is one of the core factors that we evaluate. 374 00:23:25.549 --> 00:23:29.155 Now the crux of the matter is what specifically, 375 00:23:29.215 --> 00:23:32.835 and and I'm I'm not going to go into the nitty gritty of it. 376 00:23:33.135 --> 00:23:36.880 But, it's it's suffices to say that we are 377 00:23:36.880 --> 00:23:40.340 very deliberate in the variables that we consider 378 00:23:40.799 --> 00:23:44.635 in terms of the team. And it's far beyond, does this 379 00:23:44.635 --> 00:23:48.395 person have a prior track record? Or do I like this person? 380 00:23:48.395 --> 00:23:51.695 Or do this person seem competent in the 1 on 1? 381 00:23:52.040 --> 00:23:55.740 It's a lot of variables that are related to the professional 382 00:23:56.040 --> 00:23:59.800 and personal, aspects, of the founding team 383 00:23:59.800 --> 00:24:03.235 and the founder we sit sit across. And that again 384 00:24:03.235 --> 00:24:06.295 feed into the model that predicts certain variables. 385 00:24:06.915 --> 00:24:10.510 An example for that would be the founder's ability 386 00:24:10.730 --> 00:24:14.570 to raise money in the future. Right? Because one of the the key 387 00:24:14.570 --> 00:24:18.275 aspects of the success of the company is will it 388 00:24:18.275 --> 00:24:21.875 have enough money to survive long enough in 389 00:24:21.875 --> 00:24:25.670 order to have success? Right? Will will the the team be 390 00:24:25.910 --> 00:24:29.350 able to raise the money that it needs to fully 391 00:24:29.350 --> 00:24:33.030 develop the product? And, of course, we help with 392 00:24:33.030 --> 00:24:36.075 that. And, of course, we have a network and we'll support the support the team. 393 00:24:36.075 --> 00:24:39.835 But still, how likely is it that the team is able to do 394 00:24:39.835 --> 00:24:43.434 that? And there is now we we I'm sure that 395 00:24:43.434 --> 00:24:47.050 everybody here has ideas right away. If 396 00:24:47.050 --> 00:24:50.650 I ask you, what are the variables you think that I 397 00:24:50.650 --> 00:24:54.395 can look at in order to make a prediction on 398 00:24:54.395 --> 00:24:58.235 the likelihood of you being able to raise future money. Right? What are 399 00:24:58.235 --> 00:25:02.080 the personal and professional variables that 400 00:25:02.080 --> 00:25:05.920 I could look at? And this is something we spent a lot of 401 00:25:05.920 --> 00:25:09.365 time evaluating. We've looked at 100 and thousands 402 00:25:09.585 --> 00:25:13.365 of past companies and past, successful 403 00:25:13.505 --> 00:25:17.240 and unsuccessful StartupRadio order to figure out the 404 00:25:17.240 --> 00:25:20.779 key variables that we need to consider in order to make certain predictions 405 00:25:20.840 --> 00:25:24.460 about these factors. That's very interesting. So 406 00:25:25.465 --> 00:25:29.145 bottom line, I do believe a large impact is on the 407 00:25:29.145 --> 00:25:32.985 team, on what you like, think about the 408 00:25:32.985 --> 00:25:36.740 team. Before I get to to to to to to my 409 00:25:36.740 --> 00:25:39.720 next question or your question following that up, 410 00:25:40.585 --> 00:25:44.185 When you've been digging so much into past successes and 411 00:25:44.185 --> 00:25:48.025 failures, was there a variable that surprised you the 412 00:25:48.025 --> 00:25:51.360 most either predicting success or failure? 413 00:25:52.540 --> 00:25:56.215 That's a very good question. It 414 00:25:56.215 --> 00:25:59.975 was surprising to see that, I mean, that 415 00:25:59.975 --> 00:26:03.815 that I'm very careful with now, 416 00:26:04.054 --> 00:26:07.590 how the interpretation of the data and how I want to formulate this 417 00:26:07.590 --> 00:26:11.350 because, we are still in a stage where we try 418 00:26:11.350 --> 00:26:14.710 to really make sure that we narrow it down to the right 419 00:26:14.710 --> 00:26:18.375 variables because you have multiples Joe the multi 420 00:26:18.375 --> 00:26:21.735 correlated variables, right? Where where it's really difficult to say, 421 00:26:21.735 --> 00:26:24.610 okay, which of these variables are, 422 00:26:25.710 --> 00:26:29.250 in effect sort of predictive in it by itself 423 00:26:29.725 --> 00:26:33.105 and which of these variables are just correlated to the predictive 424 00:26:33.165 --> 00:26:36.125 variables. But, let me say it like this. 425 00:26:37.110 --> 00:26:40.250 According to the data, it looks like, 426 00:26:40.950 --> 00:26:44.250 a heterogeneous founders team, which means 427 00:26:44.790 --> 00:26:48.225 if you have a large diversity 428 00:26:48.685 --> 00:26:51.905 in the founders team, right, once you 429 00:26:52.845 --> 00:26:56.690 cross a certain threshold is very beneficial. So 430 00:26:56.690 --> 00:27:00.050 this is ironic. And the only way I can make sense of it is like 431 00:27:00.050 --> 00:27:03.775 this at the beginning. If you're very different, it 432 00:27:03.775 --> 00:27:07.375 makes it a bit harder. Right? At the very Menninger. Because it's 433 00:27:07.375 --> 00:27:10.275 just not as intuitive to to communicate. 434 00:27:11.350 --> 00:27:15.030 It's not as easy to find the consensus and so on and so 435 00:27:15.030 --> 00:27:18.490 forth. But once you 436 00:27:18.870 --> 00:27:22.375 found a working Joe to make that 437 00:27:22.375 --> 00:27:26.054 work, it becomes a huge asset because you're 438 00:27:26.054 --> 00:27:29.789 much more likely to have a larger spectrum of 439 00:27:29.789 --> 00:27:33.250 ideas at the beginning of a problem solving process. 440 00:27:33.630 --> 00:27:37.470 Right? And there is other research that backs that up 441 00:27:37.470 --> 00:27:41.265 to a certain extent, which shows that if you in 442 00:27:41.265 --> 00:27:45.025 an ideation process, if you wanna solve any kind of problem and and the 443 00:27:45.025 --> 00:27:48.860 ideation process, you have a very large spectrum of ideas and you 444 00:27:48.860 --> 00:27:52.380 start with a large funnel and you narrow it down as a 445 00:27:52.380 --> 00:27:56.115 team, that is beneficial to the solution and you'll actually have a 446 00:27:56.115 --> 00:27:59.554 better solution. So, we believe that 447 00:27:59.554 --> 00:28:03.380 founding teams, right, often you will see that all the time. It's also 448 00:28:03.380 --> 00:28:07.000 friends and, you know, you get along anyway, so you become a team. 449 00:28:07.460 --> 00:28:11.140 Yes. That makes it easy at the beginning, but don't fall into the 450 00:28:11.140 --> 00:28:14.685 trap that there is a risk if you always have the same 451 00:28:14.685 --> 00:28:18.365 opinion. Right? It's beneficial to have different opinions in the 452 00:28:18.365 --> 00:28:22.000 team. We talked a lot about team. About the 453 00:28:22.000 --> 00:28:24.500 ideas, I do believe they're very diverse, 454 00:28:26.800 --> 00:28:30.135 especially in this area. If you're talking about research, 455 00:28:30.835 --> 00:28:34.435 it's not only they have an idea, they evaluated something and they come 456 00:28:34.435 --> 00:28:37.980 around with a PowerPoint presentation. Sometimes it's even a complete 457 00:28:38.120 --> 00:28:41.559 life achievement of somebody who started out with a 458 00:28:41.559 --> 00:28:45.179 bachelor, did a PhD, and spent years years in a laboratory. 459 00:28:46.755 --> 00:28:49.655 But in general talking, the idea 460 00:28:51.315 --> 00:28:54.990 to look seriously at it from your perspective should have 461 00:28:54.990 --> 00:28:58.830 progressed beyond just the PowerPoint state. Right? Oh, yeah. 462 00:28:58.830 --> 00:29:02.525 Absolutely. I mean, in the field of deep tech or in the field of 463 00:29:02.525 --> 00:29:06.285 technological development, you talk about what you call 464 00:29:06.285 --> 00:29:10.045 TLR stands for technological readiness, not TRL. 465 00:29:10.045 --> 00:29:13.770 Sorry. Technological readiness level. Right? And it goes 466 00:29:13.770 --> 00:29:17.450 from 1 to 10 where 1 is really the ideation stage and 467 00:29:17.450 --> 00:29:18.190 10 is 468 00:29:25.445 --> 00:29:28.750 interesting for us because that means that you have done 469 00:29:29.529 --> 00:29:33.210 laboratory testing. You have built a certain lab scale 470 00:29:33.210 --> 00:29:36.875 prototype, and you have generated real data. 471 00:29:37.255 --> 00:29:40.934 Right? So, everything before that is really 472 00:29:40.934 --> 00:29:44.440 purely theoretical and wouldn't be ready for us to 473 00:29:44.440 --> 00:29:47.960 invest in because we think that you need a certain proof of 474 00:29:47.960 --> 00:29:51.505 concept, right, in order to move forward. Now 475 00:29:51.505 --> 00:29:55.284 I'll give you an example again to to understand this. There was this, 476 00:29:55.985 --> 00:29:59.825 it's a company we're currently evaluating, so I'm not gonna go too deep into 477 00:29:59.825 --> 00:30:03.330 the details, but very exciting company that developed a 478 00:30:03.330 --> 00:30:06.310 material that if you mix it with water, 479 00:30:06.770 --> 00:30:10.545 will have a huge 480 00:30:10.545 --> 00:30:14.385 effect on the ability of soil to retain water. So 481 00:30:14.385 --> 00:30:17.900 I Menninger you're I mean, to to to make to dumb it down almost too 482 00:30:17.900 --> 00:30:21.740 much. Right? You're in the desert. You have no water. Right? Or 483 00:30:21.740 --> 00:30:24.799 you're in Southern California and you struggle with dry 484 00:30:26.375 --> 00:30:29.895 soils a lot. Right? And the problem with dry soil is 485 00:30:29.895 --> 00:30:33.600 water goes right through it and minerals go right through it. 486 00:30:33.600 --> 00:30:37.200 So you typically have the problem. You need to have a lot of irrigation water 487 00:30:37.200 --> 00:30:40.880 and you need to use a lot of fertilizers in order to get a proper 488 00:30:40.880 --> 00:30:44.664 yield. Now this product, you mix it as it's a it's a 489 00:30:44.664 --> 00:30:48.265 gel. Right? You mix it into the irrigation water, and it 490 00:30:48.265 --> 00:30:52.020 goes between the soil particles, and it helps the soil to 491 00:30:52.020 --> 00:30:55.640 retain water and minerals. And so now on the ideation 492 00:30:55.780 --> 00:30:59.485 stage, that wouldn't have been enough to for us to invest. But 493 00:30:59.485 --> 00:31:02.865 they now recently did large scale laboratory 494 00:31:03.005 --> 00:31:06.765 tests where they tested that with 7 different kinds 495 00:31:06.765 --> 00:31:10.060 of crops in the laboratory and 496 00:31:10.120 --> 00:31:13.800 literally observed soil with the product, soil without the 497 00:31:13.800 --> 00:31:17.325 product. And we look at the amount of irrigation I need, and we look at 498 00:31:17.404 --> 00:31:21.085 the yield I get. And this product, for instance, has 499 00:31:21.085 --> 00:31:24.924 on average require make made the the the 500 00:31:24.924 --> 00:31:28.760 crop require 80 percent less irrigation water 501 00:31:29.060 --> 00:31:32.760 and still gotten 30% more yield, 502 00:31:32.900 --> 00:31:36.475 which is absolutely incredible. If that would prove correct on a large 503 00:31:36.475 --> 00:31:39.914 scale, absolutely incredible. So but we 504 00:31:39.914 --> 00:31:43.674 needed this lab trial to be done before we can 505 00:31:43.674 --> 00:31:47.140 really evaluate it. So to come back to your question, 506 00:31:47.600 --> 00:31:51.360 as long as it was on the pure ideation stage or maybe, like, on the 507 00:31:51.360 --> 00:31:54.775 molecular design of the particle 508 00:31:54.915 --> 00:31:58.755 stage, too early for us. But as soon as it had 509 00:31:58.755 --> 00:32:02.190 these first lab trials and we come from a technological 510 00:32:02.570 --> 00:32:06.010 readiness 3, and and we transition into 4, 511 00:32:06.010 --> 00:32:08.669 right, that's when it becomes interesting to us. 512 00:32:10.125 --> 00:32:13.825 What my what I had in mind when I heard this was also 513 00:32:14.045 --> 00:32:17.885 well, there can be some areas that barely get rain. But 514 00:32:17.885 --> 00:32:21.650 when it rains, it starts flooding down the stream, and you can also 515 00:32:21.950 --> 00:32:25.790 work on those areas. Very interesting thing. Let 516 00:32:25.870 --> 00:32:29.225 let's go a little bit from, where you're 517 00:32:29.225 --> 00:32:33.005 investing, what do you how you're investing, a little bit into 518 00:32:33.865 --> 00:32:37.679 the fund itself, a little bit market trends and the outlook, and then we're 519 00:32:37.679 --> 00:32:41.440 good. We are already talking for more than 30 minutes. By the way, 520 00:32:41.440 --> 00:32:44.899 did you study philosophy? No. I didn't. 521 00:32:45.120 --> 00:32:48.265 I studied law, which, is a little bit counterintuitive, 522 00:32:48.725 --> 00:32:52.565 but, yeah. I've I've I haven't been 523 00:32:52.565 --> 00:32:56.370 working in law for the past 7 years, so so it's been 524 00:32:56.370 --> 00:33:00.050 a while. I see. I see. Well, nonetheless, that it plain 525 00:33:00.290 --> 00:33:03.995 explains long answers. Don't worry. Not going 526 00:33:03.995 --> 00:33:07.775 to this here. I I really like the answers. They're well thought through. 527 00:33:08.795 --> 00:33:11.695 Talking a bit little bit about Blue Force Ventures, 528 00:33:12.940 --> 00:33:16.720 the fund and the management. Can you describe a little bit, 529 00:33:17.500 --> 00:33:21.020 how you guys are set up? Because if you currently go on your 530 00:33:21.020 --> 00:33:24.445 website, there is a logo on there and 3 531 00:33:24.445 --> 00:33:27.498 locations, Berlin, London and Menninger. 532 00:33:28.044 --> 00:33:31.210 But not a lot more. Can you tell us a little bit about the team 533 00:33:31.210 --> 00:33:34.970 and how you guys are set up? And I would also 534 00:33:34.970 --> 00:33:38.410 be interested because before we talked, we talked a lot 535 00:33:38.410 --> 00:33:42.065 about important places where you could find 536 00:33:42.365 --> 00:33:46.205 deep tech investments because I do believe you invest all over Europe. 537 00:33:46.205 --> 00:33:49.420 Right? That's true. I mean, 538 00:33:50.120 --> 00:33:53.800 let let's unpack the the questions. First off, about us and the 539 00:33:53.800 --> 00:33:57.134 team. So, the the 540 00:33:57.595 --> 00:34:01.195 idea, to to create this fund, I 541 00:34:01.195 --> 00:34:04.580 think a lot of us had sort of simultaneously 542 00:34:05.120 --> 00:34:08.820 or ideas around that. And, I 543 00:34:08.960 --> 00:34:12.534 personally know my co founding partner, 544 00:34:12.915 --> 00:34:16.534 from business school because after studying law, I also did 545 00:34:19.059 --> 00:34:22.839 executive MBA at the business school in France. And I met, 546 00:34:23.299 --> 00:34:26.760 my co founder, Moises Janae. He's from Mexico. 547 00:34:27.135 --> 00:34:30.494 And trust me when I say this is a good example for 548 00:34:30.494 --> 00:34:34.175 having a fairly different approach to certain things 549 00:34:34.175 --> 00:34:38.000 and, you know, Menninger it arguably a bit more difficult at 550 00:34:38.000 --> 00:34:41.520 the Menninger, but now we really see how it how it benefits 551 00:34:41.520 --> 00:34:45.034 us. But, that set aside, I had 552 00:34:45.175 --> 00:34:48.395 another partner, in Germany that ironically, 553 00:34:49.415 --> 00:34:53.259 I've made 2 deep tech investments with in the past. Well, 554 00:34:53.259 --> 00:34:56.639 I advised him. He's an angel investor, and I basically 555 00:34:56.699 --> 00:35:00.000 created the contact between him and the deep tech investments, 556 00:35:00.935 --> 00:35:04.695 that, that he invested in. And Joe, we got 557 00:35:04.695 --> 00:35:08.340 together and, and we we founded 558 00:35:08.340 --> 00:35:11.940 Blue Forest Ventures, and, took on right 559 00:35:11.940 --> 00:35:15.720 away a long term, a long time employee of mine 560 00:35:16.275 --> 00:35:20.115 that I've, hired right out of university 4 years 561 00:35:20.115 --> 00:35:23.315 ago, first at Sanity Group, then, 562 00:35:23.715 --> 00:35:27.450 transitioned to Endosame, and now came 563 00:35:27.450 --> 00:35:30.830 with me to Blue Forest. So he's basically employee number 1, 564 00:35:31.930 --> 00:35:35.615 of our fund. So we are 2 full time 565 00:35:35.915 --> 00:35:38.655 general partners, myself and Moises. 566 00:35:39.515 --> 00:35:43.340 We have our partner, Julian, who is not a full 567 00:35:43.340 --> 00:35:47.180 time partner and, hence, not a full time member and, 568 00:35:47.180 --> 00:35:50.875 hence, is not a general partner, but is working with 569 00:35:50.875 --> 00:35:54.715 us, very intensively. And we 570 00:35:54.715 --> 00:35:58.530 have Nicholas, our associate and employee number 571 00:35:58.530 --> 00:36:01.430 1, and now we are in the process of hiring 2 analysts. 572 00:36:03.410 --> 00:36:07.010 Located in Berlin, what else is there? Yeah. Fund size, 573 00:36:07.010 --> 00:36:10.724 we've talked about before. We are quite efficient in 574 00:36:10.724 --> 00:36:14.345 our process as we've set it up in a way so that it can 575 00:36:14.405 --> 00:36:17.900 be very largely automated. Right. Joe, 576 00:36:18.460 --> 00:36:22.300 we we a lot of the things that typically take a lot of time away 577 00:36:22.300 --> 00:36:25.980 from people, specifically analysts are fully automated in our process Joe 578 00:36:25.980 --> 00:36:29.555 that that saves a lot of time. And the other 579 00:36:29.555 --> 00:36:33.395 question that you had was the locations and, why we 580 00:36:33.395 --> 00:36:37.030 chose certain locations, what we look at. So Berlin is 581 00:36:37.030 --> 00:36:40.870 is purely optimistic choice. Right? And I I would love to 582 00:36:40.870 --> 00:36:44.490 to tell you that there was some kind of elaborate thought behind it. 583 00:36:44.684 --> 00:36:47.744 But the reality of things is Berlin is a good 584 00:36:48.045 --> 00:36:51.724 location for a venture capital fund in general. There's a lot of 585 00:36:51.724 --> 00:36:55.280 things going on in Berlin, and there's quite a big ecosystem. Now 586 00:36:55.280 --> 00:36:58.820 Berlin is not the most relevant location for deep tech in Europe, 587 00:36:59.440 --> 00:37:03.275 but it's the location where I had most of my personal 588 00:37:03.275 --> 00:37:07.115 network, and we had the best chance to to get something off 589 00:37:07.115 --> 00:37:09.695 the ground, on a short term basis. 590 00:37:11.030 --> 00:37:14.870 But we are all quite flexible, and we all travel a 591 00:37:14.870 --> 00:37:17.450 lot. So we can easily cover 592 00:37:19.265 --> 00:37:22.945 Europe as a whole and even, selectively, as I said, the 593 00:37:23.085 --> 00:37:26.165 Menninger, Southeast Asia, North America. And 594 00:37:28.040 --> 00:37:31.799 the question of which locations are most relevant for us 595 00:37:31.799 --> 00:37:35.494 in terms of finding suitable deep tech companies is 596 00:37:35.494 --> 00:37:38.954 mostly related to the ecosystem 597 00:37:39.335 --> 00:37:43.115 that research institutes and academic institutions 598 00:37:43.174 --> 00:37:47.000 such as universities have created. So you really see a big 599 00:37:47.000 --> 00:37:50.760 correlation between the amount of successful deep 600 00:37:50.760 --> 00:37:54.185 tech companies, and the 601 00:37:54.325 --> 00:37:57.785 support system and the the the information 602 00:37:58.165 --> 00:38:01.900 system even that these institutions have created 603 00:38:01.900 --> 00:38:05.740 around that. One of the primary examples of that and really 604 00:38:05.740 --> 00:38:09.164 hats off to them is what the ETH Zurich has 605 00:38:09.164 --> 00:38:12.865 created in Zurich around the ETH. There's a myriad 606 00:38:13.005 --> 00:38:16.760 of accelerators, incubators, 607 00:38:16.980 --> 00:38:20.820 support programs, people that will help you, people that 608 00:38:20.820 --> 00:38:24.040 will give you advice on on how to set up a company, 609 00:38:24.905 --> 00:38:28.665 on what you need to be to be cognizant of and so on and 610 00:38:28.665 --> 00:38:32.425 so forth. And you really see that that creates a 611 00:38:32.425 --> 00:38:36.050 lot of, it creates 612 00:38:36.430 --> 00:38:40.190 a situation where StartupRadio just have a 613 00:38:40.190 --> 00:38:43.944 better chance to take off. Right? And so, 614 00:38:44.424 --> 00:38:47.724 BK Zurich is certainly or Zurich is is is a very 615 00:38:47.865 --> 00:38:51.380 relevant location for us. Munich is a relevant location for 616 00:38:51.380 --> 00:38:54.900 us. Eindhoven is location, and certainly 617 00:38:54.900 --> 00:38:58.705 Cambridge, Oxford are relevant for us. And and I 618 00:38:58.705 --> 00:39:02.145 could list more and more, but essentially, it 619 00:39:02.145 --> 00:39:05.640 depends on the ecosystem that is created in and 620 00:39:05.640 --> 00:39:09.400 around the research institutions and universities, in these 621 00:39:09.400 --> 00:39:13.160 locations. Yeah. That's really 622 00:39:13.160 --> 00:39:16.835 it. One of my questions 623 00:39:17.295 --> 00:39:21.135 would have been how you're trying to support companies, but we've already 624 00:39:21.135 --> 00:39:23.970 talked about you being a translator, 625 00:39:25.230 --> 00:39:29.070 research into business. I do believe that was already a 626 00:39:29.070 --> 00:39:30.450 very valid point. 627 00:39:33.085 --> 00:39:36.765 I was curious how do you measure 628 00:39:36.765 --> 00:39:40.319 success? On one hand side, there's the financial success. You 629 00:39:40.319 --> 00:39:44.099 get a really big company. You you get really successful 630 00:39:44.240 --> 00:39:47.920 in terms of finance because the valuation of the company goes 631 00:39:47.920 --> 00:39:51.615 up. You list them. You exit it one way or another. 632 00:39:51.835 --> 00:39:55.055 That is fine. But what else 633 00:39:55.570 --> 00:39:58.950 would you consider success with the companies you invest in? 634 00:40:00.850 --> 00:40:04.485 Look. We're very we're very fortunate in the 635 00:40:04.485 --> 00:40:08.085 way because the field we're looking into makes it 636 00:40:08.085 --> 00:40:10.025 very easy to combine 637 00:40:11.589 --> 00:40:15.130 success on the financial level, which I would translate to return, 638 00:40:15.589 --> 00:40:19.315 right and positive impact on the other side. Right? 639 00:40:19.315 --> 00:40:22.214 And now everybody talks about impact and sustainability. 640 00:40:23.234 --> 00:40:27.015 And oftentimes, this is a tough choice to make between 641 00:40:27.700 --> 00:40:31.460 being return driven and being impact driven. In 642 00:40:31.460 --> 00:40:35.059 deep tech, the compromise you need to make in 643 00:40:35.059 --> 00:40:38.494 order to achieve both is not a lot. 644 00:40:38.714 --> 00:40:42.335 Because almost in the definition of deep tech, 645 00:40:42.795 --> 00:40:46.590 you have the impact that's imminent. Right? And 646 00:40:46.590 --> 00:40:50.350 if you have a successful Deep Tech company, you will 647 00:40:50.350 --> 00:40:53.790 have a large impact. Now is this a positive or 648 00:40:53.790 --> 00:40:57.245 negative impact is something that that obviously 649 00:40:58.665 --> 00:41:02.445 is a question that you need to ask. But generally 650 00:41:02.665 --> 00:41:06.080 speaking in the overwhelming majority of 651 00:41:06.080 --> 00:41:09.680 cases, we're talking about positive impact and a 652 00:41:09.680 --> 00:41:13.484 clearly positive impact. Now there are certain exceptions if we 653 00:41:13.484 --> 00:41:17.164 talk about certain defense application where really the only 654 00:41:17.164 --> 00:41:20.830 thing you could think of is defense application. But this is 655 00:41:20.830 --> 00:41:24.430 the the and and and, obviously, certain cases where I don't 656 00:41:24.430 --> 00:41:28.035 know, I guess you could come up with 657 00:41:28.035 --> 00:41:31.395 with innovation around, you know, gambling or something that 658 00:41:31.395 --> 00:41:35.130 could qualify as deep tech. You know, 659 00:41:35.130 --> 00:41:38.490 I'm I'm really shooting from the hip here. But you see, it's it's 660 00:41:38.490 --> 00:41:42.250 almost hard to come up with something that that would have a 661 00:41:42.250 --> 00:41:45.775 negative impact. So, this makes it 662 00:41:45.775 --> 00:41:48.595 very easy for us to be able to say success 663 00:41:49.214 --> 00:41:53.040 means it has a great return and has a positive impact. 664 00:41:53.040 --> 00:41:53.540 The 665 00:42:01.760 --> 00:42:04.694 measurement of sustainability. And, of the measurement of sustainability. 666 00:42:06.595 --> 00:42:09.654 And we we are attempting to create 667 00:42:10.090 --> 00:42:13.770 something that that we refer to as sustainability by 668 00:42:13.770 --> 00:42:17.210 design and, a positive impact by 669 00:42:17.210 --> 00:42:20.744 design, which means one of the big things a lot of 670 00:42:20.744 --> 00:42:24.265 investment funds struggle with is that they have 671 00:42:24.265 --> 00:42:28.019 structures, They have that process. And now there is these regulations 672 00:42:28.319 --> 00:42:32.160 that come on top of that and the the regulations around impact. And if we 673 00:42:32.160 --> 00:42:35.895 talk about Europe, for instance, you have these, article 674 00:42:36.675 --> 00:42:40.455 6 to 9 in terms of how the degree 675 00:42:40.515 --> 00:42:43.050 of sustainability you really want to achieve. 676 00:42:44.170 --> 00:42:47.770 And this is quite difficult to implement for a lot of funds. Right? 677 00:42:47.770 --> 00:42:50.510 Because they need to basically retroactively 678 00:42:52.335 --> 00:42:56.015 take this this set of regulation and apply it to 679 00:42:56.015 --> 00:42:59.775 their existing process. Right? And that becomes quite tedious in terms 680 00:42:59.775 --> 00:43:03.049 of how do you report that, how do you track the KPIs, and so on 681 00:43:03.049 --> 00:43:06.890 and so forth. What we're able to do, and this is really nothing 682 00:43:06.890 --> 00:43:10.250 that I want to take too much credit for because it's just because we're new 683 00:43:10.250 --> 00:43:13.925 and we can set up structures new, is we 684 00:43:13.925 --> 00:43:17.225 integrate the measurement of impact and the measurement 685 00:43:17.365 --> 00:43:21.200 of of, you know, the effect of the companies in future, 686 00:43:21.200 --> 00:43:24.900 the likely effect. We integrate that into our evaluation 687 00:43:25.040 --> 00:43:28.625 system. They're an integral part of it, which 688 00:43:28.625 --> 00:43:32.305 means that, that this is not something that 689 00:43:32.305 --> 00:43:36.079 we that we that we take into account separately in the 690 00:43:36.079 --> 00:43:39.700 aftermath or something like that. But that's an integral part 691 00:43:39.920 --> 00:43:43.704 of the entirety of our evaluation system. And this makes it much 692 00:43:43.704 --> 00:43:47.144 easier for us to be able to say, our 693 00:43:47.625 --> 00:43:51.224 the companies that we invest in, if they're successful, they will 694 00:43:51.224 --> 00:43:54.430 also have a clearly positive impact 695 00:43:55.050 --> 00:43:57.710 on society, environment, 696 00:43:58.730 --> 00:44:02.145 and the world we live in, basically. We are 697 00:44:02.145 --> 00:44:05.825 now talking for 45 minutes, mostly you, which is totally 698 00:44:05.825 --> 00:44:08.920 fine. The people out there already know my opinion and my voice, 699 00:44:09.960 --> 00:44:13.420 enough. And I would only have 2 closing 700 00:44:13.720 --> 00:44:17.420 questions. First one, what 701 00:44:17.559 --> 00:44:21.345 are the market trends, any any merchant 702 00:44:21.345 --> 00:44:24.785 technologies that excite you right now besides from 703 00:44:24.785 --> 00:44:28.600 AI? And then I have a second 704 00:44:28.600 --> 00:44:32.280 question, but this time, I'll only bother you with 1. Okay. I'm going to 705 00:44:32.280 --> 00:44:35.994 try to keep it much shorter now. I don't 706 00:44:35.994 --> 00:44:39.835 know if you heard about the Gartner hype cycle, and 707 00:44:39.835 --> 00:44:43.530 basically the measurement of the hype. And I 708 00:44:43.530 --> 00:44:47.030 I think that we're all subject to that in one way, shape, or form. 709 00:44:48.290 --> 00:44:51.795 What excites me really is data transmission and data storing 710 00:44:51.795 --> 00:44:55.555 technology. And I keep it that far because I think that whatever 711 00:44:55.555 --> 00:44:59.335 innovation we talk about, whether it is quantum computing, 712 00:44:59.395 --> 00:45:03.140 whether it's AI, whether it's the whole term term of, like, more 713 00:45:03.140 --> 00:45:06.440 specifically language, speech recognition, and so on and so forth. 714 00:45:06.980 --> 00:45:10.714 All relies or, like, all will add to the quantity 715 00:45:10.714 --> 00:45:14.395 of data that we, the world, needs to handle, 716 00:45:14.395 --> 00:45:17.910 right, and store and transmit and so on. So I 717 00:45:17.910 --> 00:45:21.750 think that the the basic data infrastructure that we're 718 00:45:21.750 --> 00:45:25.270 talking about on the hardware and software basis is what 719 00:45:25.270 --> 00:45:28.935 fascinates me a lot. That was much shorter. Right? That 720 00:45:29.675 --> 00:45:33.435 it actually surprised me. Yeah. And and and the 721 00:45:33.435 --> 00:45:36.960 last question I would have because it is important 722 00:45:37.020 --> 00:45:40.640 for a lot of StartupRadio, entrepreneurs, founders 723 00:45:41.020 --> 00:45:44.575 seeking VC investments. How do you 724 00:45:44.575 --> 00:45:48.175 stay informed? What kind of media? What kind 725 00:45:48.175 --> 00:45:52.015 of outlet? Of obviously, besides StartupRadio, 726 00:45:52.255 --> 00:45:56.070 need founders to get into in 727 00:45:56.070 --> 00:45:59.670 order to grab your attention. I 728 00:45:59.670 --> 00:46:03.125 mean, we try to not be too 729 00:46:03.125 --> 00:46:06.505 much attached to the these hype topics because 730 00:46:06.805 --> 00:46:10.645 that would be such a selection bias already at the 731 00:46:10.645 --> 00:46:14.220 get go that would skew our entire model. Right? Our 732 00:46:14.220 --> 00:46:16.720 model is based on a fairly unbiased 733 00:46:17.820 --> 00:46:21.485 gathering of information. So what we do typically is actually 734 00:46:21.485 --> 00:46:25.245 go to the universities into the accelerators and try 735 00:46:25.245 --> 00:46:28.785 to have a fairly objective look at the entire cohort 736 00:46:29.150 --> 00:46:32.510 of StartupRadio is there. We also use a lot of 737 00:46:32.510 --> 00:46:35.809 scraping technology in terms of extracting 738 00:46:36.030 --> 00:46:39.715 information from certain databases and websites 739 00:46:39.855 --> 00:46:43.535 and the Internet in general in order to to fill 740 00:46:43.535 --> 00:46:46.250 up our funnel with leads. Now, 741 00:46:47.349 --> 00:46:50.010 of course, we follow certain, 742 00:46:50.869 --> 00:46:54.650 large scientific publications and, and and 743 00:46:55.435 --> 00:46:56.655 certain typical, 744 00:46:59.595 --> 00:47:02.820 media outlets, in terms of I mean, 745 00:47:03.300 --> 00:47:06.760 I'm not saying too much if I say that we do 746 00:47:07.380 --> 00:47:11.185 Canvas for instance, LinkedIn quite regularly, although LinkedIn is tricky. I don't 747 00:47:11.185 --> 00:47:14.725 wanna go too deep into that because they're very, very difficult to scrape. 748 00:47:15.105 --> 00:47:18.785 Obviously, we're following whatever compliance there is 749 00:47:18.785 --> 00:47:22.270 out there, But, there is certain sources, 750 00:47:23.450 --> 00:47:27.050 that go beyond publication, which we talk more 751 00:47:27.050 --> 00:47:30.635 about registration of patents, for 752 00:47:30.635 --> 00:47:34.155 instance, that we look into in order to get an idea of what's 753 00:47:34.155 --> 00:47:36.895 happening. We also follow a lot of the 754 00:47:37.680 --> 00:47:41.380 actual scientific publications coming out of certain universities 755 00:47:41.440 --> 00:47:45.060 in order to know what are the topics that they really focus on. 756 00:47:45.565 --> 00:47:49.405 I see. So the the the the only question left 757 00:47:49.405 --> 00:47:53.100 for me right now, everybody who has listened 758 00:47:53.100 --> 00:47:56.620 through this is obviously interested in either 759 00:47:56.620 --> 00:48:00.320 becoming an LP or pitching you for money. 760 00:48:00.940 --> 00:48:04.555 What is the best way to reach out to you guys to 761 00:48:04.555 --> 00:48:08.075 pitch you? Is it LinkedIn? Is it the website? Both is 762 00:48:08.075 --> 00:48:11.615 fine. The website has an email address that's there. 763 00:48:13.259 --> 00:48:17.019 And LinkedIn is also fine. We follow both. We're we're we're 764 00:48:17.019 --> 00:48:20.079 very receptive for both. I'm also happy, 765 00:48:21.245 --> 00:48:25.085 to to be hit up directly on LinkedIn. I'm not very 766 00:48:25.085 --> 00:48:28.685 complicated with that, at all. You know it. We communicate through 767 00:48:28.685 --> 00:48:32.520 LinkedIn a lot. So I'm I'm somebody that that does 768 00:48:32.520 --> 00:48:36.360 try to answer most messages I get, on LinkedIn, 769 00:48:36.360 --> 00:48:40.055 for instance. But, yeah, email is also perfect. You'll 770 00:48:40.055 --> 00:48:43.655 find an email address on the website. Right. So I do 771 00:48:43.655 --> 00:48:47.020 believe that was everything from my side. 772 00:48:47.320 --> 00:48:51.080 Thank you very much for this very extensive interview. I I really, 773 00:48:51.080 --> 00:48:54.444 really liked it, especially since I don't have to talk a 774 00:48:54.444 --> 00:48:57.964 lot. And I do believe that gives a very 775 00:48:57.964 --> 00:49:01.780 interesting behind the scenes insight of a early stage 776 00:49:01.780 --> 00:49:05.460 investor that is usually not available for most 777 00:49:05.460 --> 00:49:09.220 entrepreneurs here. Thank you very much, Max. It was a pleasure having you as 778 00:49:09.220 --> 00:49:13.005 guest. It was a pleasure again. Have a 779 00:49:13.005 --> 00:49:16.065 good day. Bye bye. You too. Thanks. Bye bye.