Valerian P. A. Seither

Germany and Europe need a lot more technical founders and we need to build a second & more technical ecosystem. 🏗 I just published a column in German outlet Gründerszene / Business Insider where I argue the following: 1. 👨‍🔧 Technical Founders are a massively lacking Europe is lacking the generational tech giants which the US or China have produced. The often quoted reasons are lack of Series B+ capital, fragmented European markets or regulation. The often overlooked factor is that those generational companies in the US are largely built by people with strong technical backgrounds whereas in Europe we see a lot less technical founders. I.e.: Of the top 10 market cap companies today in the US, 7 are tech companies. Of those, ALL have been founded by people with technical backgrounds. For European Unicorns only 26% have technical co-founders - and in most cases then not in the CEO role. That difference is staggering! 2. 🔁 This is a flywheel that has organically grown We have built a great and functioning flywheel especially around people with more business backgrounds. A lot of the venture successes in Europe and Germany in particular of companies started in the mid-2000s were built in the archetype of "two business school graduates hire first CTO to help them build company" as opposed to the "Two Stanford computer science graduates get together and build company". Then as a number of those companies turn successful the flywheel starts spinning: The next generation of people with business backgrounds has role models to emulate, has relevant network of angels and entrepreneurs and investors invest in things that look like past successes and so it becomes a self-reinforcing cycle. This flywheel just does not exist to the same extent for technical founders yet. Case in point: In Germany I would argue that probably >80% of VCs are German and have business backgrounds whereas in Berlin >80% of software engineers come from abroad. 3. 🎉 The future is bright Firstly the fact that we are only just getting started on the technical founder ecosystem is great news because it means our ecosystem is still at Day One and we have enormous potential. More importantly - the gap to the US is closing. The demographics of graduates are changing: Computer science graduates since 2010 have doubled in Germany and more importantly the perception of computer science degrees is changing. Computer Science is finally no longer viewed as a choice for "the nerds" but we increasingly see talent go down this path that 10-15 years ago would have chosen to study the more established paths of Business/Law/Medicine/etc... And last but not least do we start to see really meaningful technical ecosystems emerge, especially around the Technical University of Munich. Many thanks to Nina Anika Klotz from Gründerszene! Link to the full article (in german) here: https://lnkd.in/esXCTByd

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Founders should be able to sell secondary whenever they’d like to do so. If you make something - and that thing is valuable - you should be able to sell it. Actually selling that secondary can be tricky. Let's go through the actual steps (or read the whole essay https://lnkd.in/eajr238N): 1. Get the term sheet. 2. Negotiate “normal” major terms: dollars in, price, board, etc. 3. Don’t forget about re-vesting. Founders often do. 4. Sign the term sheet. Go out and start figuring out allocations for the remaining dollars. 5. If you’re lucky enough to have more demand than you do space, you have the opportunity to sell some secondary. Figure out how much excess demand you have. 6. Talk to your lawyer and your accountant about what you want to do. Ask them to explain the pros and cons of selling secondary as common shares vs. preferred shares (which is a bit out of scope for this essay). 7. Decide how much secondary you want - ideally this is “reasonable,” which is a moving target. One good way to frame “reasonable” is to give a clear reason as to why you want to sell. This is particularly important in early rounds. Good reasons include: “Need to pay off student debt” and “Just had our first kid after years at below market salary.” Less good reasons include “Need a new Porsche” and “LinkedIn ghostwriter prices went up.” 8. Go to your new lead investor and say “Hey! Great news! We have 2x demand for available shares. It would mean quite a lot to me and my cofounder if we could take (insert reasonable amount here) off the table because (insert reasonable reason) here. Obviously as our lead, you get first access. Sound good?” 9. Work with the buyer to figure out if you are selling common shares or preferred shares. (a) If you are selling common shares, and the buyer is willing to buy these at the same price as preferred, great! Just make sure that you aren’t creating any challenges around voting by giving those shares to an outside party. Also, talk to your lawyer and accountant. (b) If you are selling preferred shares, go back to your lawyer and accountant to make sure you’re not creating any issues for yourself. You’ll also need to confirm with your existing investors that they are ok with you doing this because it will change the preference stack - which impacts them. 10. Triple check your numbers. 11. Complete your transaction and close the round.

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As investors, it’s always tough to say no to founders, especially when you have taken time for diligence. An additional challenge when it comes to feedback: choosing between being frank or being "nice." Founders also often feel that VC feedback lacks specificity or adds little value. After spending some time as an investor, I made a conscious decision to take the harder route of being blunt, even if it risked making founders feel bad. In hindsight, I believe it’s been the right choice. Most founders appreciate the candor, feel heard, and have gone on to become long-term friends of the fund. So, I’m taking the liberty of sharing a few of those difficult conversations we’ve had over time: 1. Declining due to lack of customer insight: We recently passed on a couple of high pedigree teams because they hadn’t spent enough time talking to their customers to understand the problem to be solved. 2. Lack of key skills on the team: In some cases, we declined based on the absence of specific key skills in the team, like GTM or strong business thinking. 3. Team chemistry: In one case, we told the CEO — who was a new addition to the 3 member founding team — that it would be difficult for him to gel with the other two co-founders. 4. Failure to unlearn from past successes: In another case, we passed because the founders weren’t showing signs of unlearning from their past successful ventures. 5. Role of co-founders: We once had to tell a two-founder team that their roles should be reversed — that the CEO should actually be the COO, and vice versa. Imagine us telling founders how to structure their roles 🙂 6. And the hardest one: We had to decline a founder we really liked because we didn’t believe in their thesis. This one hurt because we knew how much the team matters in the early stages. At the same time, if we invested, the debate was: a) Will we be able to support the founder on the board if we don't agree with their thesis?, b) If we don’t see eye-to-eye by the next round, will we be able to continue funding the company? As always, founders time and again prove us wrong. I’m sure this will be true in many of the above cases. But my strong preference is to share what I conclude (no matter how shallow my thinking might be) rather than fake a reason.

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🚀 𝗪𝗵𝘆 𝗶𝘀𝗻’𝘁 𝗭𝘂𝗿𝗶𝗰𝗵 𝗼𝗻 𝘁𝗵𝗲 𝗹𝗶𝘀𝘁 𝗼𝗳 𝘁𝗼𝗽 𝘀𝘁𝗮𝗿𝘁𝘂𝗽 𝗰𝗶𝘁𝗶𝗲𝘀? We all know San Francisco’s startup ecosystem is massive, outpacing New York and LA combined. But let’s talk about Zurich: a city that ranks among the most innovative in the world. Yet, it's missing completely from the top global VC startup cities list. Here’s the disconnect: Switzerland consistently ranks as the most innovative country GLOBALLY, especially in terms of intellectual property. We have the ideas, the talent, and the research capabilities. But where we fall short is backing these innovations with bold investment, especially in B2C startups. Great ideas aren’t enough. Without the courage to take risks and finance these innovations, they remain just that—ideas. Ideas without execution? They’re worth, well... nothing. How does Zurich get on the list? We need to make bold moves and invest much more in B2C startups, where rapid scaling and mass-market potential lie - think of Meta, Amazon, Apple, Tesla, Nvidia, etc. Scaling faster, embracing risk, and building a robust venture capital ecosystem are key if we want Zurich to compete with global startup hubs. Zurich can lead the charge, but only if we bet big on more than just the “safe” bets. We have to take risks, invest, and go all in. What are your thoughts about this? #startups #innovation #VC #B2C #entrepreneurship #Zurich

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How to End a VC Pitch Meeting The end of a pitch meeting is as critical as the presentation itself. While many founders spend the bulk of their time perfecting the pitch, the last 10 minutes of the meeting require as much attention. Abruptly ending a meeting leaves investors uncertain or disengaged. A structured conclusion, however, can lead to a clear path forward. Here are three objectives every founder should aim to achieve when wrapping up a VC meeting: Define a Clear Next Step Never leave a meeting without defining the next step. Investors have multiple demands on their time. Without a defined follow-up, your pitch will get lost in the shuffle. Ask directly when the VC’s internal meeting will take place. If they say their investment team meets on Wednesdays, say, “Great, I’ll follow up with you on Thursday.” This tactic demonstrates initiative and keeps the momentum going. If the VC hesitates to define a next step, it’s a red flag. It indicates they aren’t interested in moving forward. Don’t waste time chasing uninterested investors—focus your energy on those who show commitment. Guide Their Evaluation Process Most VCs won’t know how to evaluate your company. It’s your job to guide them. Highlight the metrics that matter in your industry and set the framework for how they should assess your business. For example, you might say, “Retention is a key indicator of our success. Have a look at industry benchmarks and see how our numbers compare.” Or, “To understand our customers' pain points, I recommend speaking with players in this particular segment of the ecosystem.” If you have a supportive paying customer or an industry expert contact, feel free to suggest a reference call. By giving them a roadmap for evaluation, you help the VC align their assessment with the most critical factors that reflect your company’s potential. Set Terms for Further Information Exchange If the VC requests documents you didn’t cover in the meeting—such as a financial plan—this is a chance to secure another engagement. For example, you can say, “I’ll provide the pitch deck we just covered, and let’s schedule a time to go through the detailed financial plan.” This keeps the dialogue active and ensures that further engagement is tied to your next move. It’s not just about sharing data—it’s about maintaining engagement and moving toward the next step in the process. Each piece of information you provide should act as a bridge to further discussions. Ending with Control The key to ending a VC pitch meeting is to maintain control of the process. Defining a clear next step, guiding the evaluation process, and negotiating further engagement are all critical components of a successful close. By managing these elements, you ensure that the conversation doesn't fizzle out but instead continues to progress. Reserve the final 10 minutes of your meeting to wrap up effectively—because how you end the meeting might just determine whether or not you secure the investment.

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The best way to sell B2B software in a new geography? It depends. Startups have typically a couple of choices: 1. Build their own on-the-ground sales force day one 2. Alternatively: + Enter new markets via a partnership + Rev-led: Fly in and out until you acquire sufficient logos to justify investing in boots on the ground. The general advice is to build your own team day one. I believe more should consider the latter. For one, most expansions take some time and cost. Especially if It is not clear if there is PMF for that market. Going into a market where you typically have no edge or existing relationship. Recruiting takes time and training takes even more time. Complying with local regulations can also become an obstacle. Some industries like construction are dominated by large customers and suppliers; breaking through might be difficult. That’s why some firms choose to work with system integrators/resellers or expand with existing customers. 🔸 These relationships can be outcome-based, you pay when results are delivered. 🔸 They provide an inroad into a new market where they are already savvy if your brand reputation there is not as visible 🔸 You can run these strategies in tandem while building your own sales teams By going light on a sales team and working with multiple SIs and existing customers, you reduce risk and get to learn along the way. Naturally this strategy works only if your software is mature to the point someone else can sell it for you. It’s definitely one more startups can consider especially for ones expanding in regions like Southeast Asia where markets are more fragmented. What’s your take?

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Y-Combinator: Are You Building Fake Product-Market Fit? For genuine product-market fit, you need two components: 1️⃣ a product that's breaking in a good way due to increased usage 2️⃣ users who align with the economics you desire. Many founders often face a dilemma where they believe that they have achieved product-market fit based on some factor, but honestly, it’s just a "Fake Product-Market Fit." Based on following factors founders believe that they have achieved PMF, → Getting money from famous investors doesn't guarantee a perfect product-market fit. → Some companies get lots of money early but forget to make a product people really like. → "Magical thinking" is when founders ignore important numbers and convince themselves their product is successful. → Some people pretend their product is great because they don't want to admit it needs improvement. Most of the founders fell into this trap of ‘Fake Product Market Fit’. Y Combinator shared an approach on how to identify whether you are in a fake product-market fit trap and how you can come out of it. Read more in attached document...... 👉 If you find this helpful - please like, comment & share so that it reaches founders. Check out my free newsletter for more insights: https://lnkd.in/dyW299Mk . #startup #fundraising #venturecapital #funding #fundraising #founders #founderjourney #entrepreneurship #entrepreneur #founderstories #startuptips #siliconvalley #startups #vc #vcfund #vcfunding #funding #startups #pmf #product #sequoiacapital #ycombinator

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💌 saas.wtf newsletter update: +24 subs vs. last week 🫠 Could be better, but I was on vacation and therefore less active here (= less promo). Minimum goal for this year is to get to 5k subs. Let's see. ➡️ Newsletter KPIs (YTD): Net new subs: +754 Open Rate: 55.7% CTR: 5.7% Unfortunately, the LI posts in which I share my progress and announce new articles no longer generate as many new subs as a few months ago. I'm looking to use more freebies (templates etc.) as lead magnets, but I can't get around to creating any at the moment. At least not any I'd be satisfied with myself. There will also be more content collaborations. Any other things I could try? ➡️ Latest article: Micro M&A for SaaS Startups At a time when growth has become more difficult, it is worth trying ways off the beaten track. Small, strategic acquisitions can be one of them. This article is about “Micro M&A” as a growth hack and shows how buying small indiehacker projects, newsletters, etc. can potentially: 1. Drive more traffic to your website, 2. Generate more leads, and 3. Enhance your product offering. Link below - enjoy reading! If you have any specific questions about such acquisitions, feel free to reach out! #saas #startups #growth #growthhacks #mergersandacquisitions #newsletter #newsletters

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First OpenAI's round, then SpaceX, now Lilium - my LinkedIn feed is full of sometimes more, sometimes less helpful comments on what's happening in the startup and scaleup world these days. So here's another less helpful post: I refrain from taking a clear position while not knowing all the details behind the current discussion - still, it's at least questionable that venture investors, typically known for preferring clean cap tables with purely financially incentivized investors, are now forming alliances to lobby for a credit by the German government. Yes, we need to position Germany as a leading deep tech hub to remain internationally competitive, but it's outside-in hard to believe that a 50m tax payer check is a decisive argument for future equity investors - particularly for a company that has raised north of 1.5bn in private means already. Don't get me wrong, I'd try to be one of the first guests in a Lilium jet once/if they ever fly at scale, but spending tax payer money to bear the risk no private investor is willing to take doesn't feel like the best use of our funds.

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The highest valuation in a financing round might be attractive but often it is not the option you should chose. Because it will hurt you later. 1.) With an established valuation you also create an expectation for the exit price. E.g. if you raise at 50m you need to build a 500m company - ask yourself how feasible that is in your industry with your model 2.) The highest bidder might not be the best fit for you in terms of know-how and/or on a personal level. Given you will be "married" to your investor for a longer period of time a 100% match is important. 3.) Often raising at a more aggressive valuation takes longer, so you will put the money to work later than with a less competitive but faster round. It is worth asking yourself if some or maybe all of the additional dilution of a lower priced round will be offset by putting the money to work earlier and spending less time on fundraising. 4.) The high price might come with additional asks that can hurt you later 2x liq pref, additional guarantees.... So don't raise the price at all cost

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💯👇 it's funny how investment money will make entire industries believe the hype and not the reality. I sat in DARPA talks at Defcon a couple of few years back and talked with someone who worked on the project to find out that the driverless cars had a massive problem -- one they could not overcome at the time. Called the "side of the road" problem. The technology they use to d( the cars couldn't determine the side of the road. This is why it moved into cities and in Grandma mode because in cities you can map enough permanent elements to keep it from going off the side of the road, yet at that time the hype was we were going to have driverless cars in the next two years because Musk kept telling people that was the future The people at DARPA said it'd be at least a decade. Then drones. I attend CES in Las Vegas, if you went to CES at the time that people were talking about drones delivering everything to homes you would know they're incredibly loud. They are so loud that if you had these flying around your home the complaints would be off the charts. Also, on seeing these in person your first thought is how are they going to get into different structures? They have to be able to fly around a lot of permanent objects that block any direct path because doors are often protected by other objects. it seems like an obvious issue from it going mainstream, yet the hype machine ignored it all. Now we have Generative AI, which has hallucination (AND POWER) problem. The hallucination problem however is part of the DNA of the product. I mean it's Generative AI it predicts text, so it cannot predict all text correctly then you get the problem of it making things up. Though it's not really making things up it's just putting the next most likely word in the sentence. Yet, we're still in the hype cycle two years later of how this is all going to change the world even though if you follow and read the leaders in this field you will know that that is definitely not what's going to happen with Generative AI - if you want a good summary of all the issues get the Goldman Sachs report on it. The key issue in all of these, is they are products with inherent challenges that are almost impossible to surmount at the same time they're getting all the investment for these products because of the hype cycle. LOOK AT THIS GLARING ISSUE THAT MAY BE IMPOSSIBLE TO OVERCOME! Investors ¯⁠\⁠_⁠(⁠ツ⁠)⁠_⁠/⁠¯ This doesn't mean there's no use for all of this tech There are definitely AMAZING NICHE SPECIFIC uses for all of it, but they're not the use cases that will make 100B dollars in five years and probably never will. Yet, if we were more invested in making the world better with the niche tech and not in some investor making 10x their bid, we could do big things and then move on to the next big thing. instead will continue to sink billions into the tech for the cost fallacy hopes that one day it will make that return, but how much other tech dies in the process?

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The days of planning for 18-24 months of runway are behind us, and extending that outlook to 2.5+ years is becoming the new norm. It’s not just about raising capital anymore—it’s about building resilience and being extremely mindful of how resources are allocated. Cutting back on team size and keeping burn rates low are now essential moves, but the real challenge will be balancing this with maintaining strong growth signals. Founders need to think creatively about stretching their runway without compromising momentum. The focus on cash flow positivity can’t overshadow the importance of showing investors you’re still in the race for scaling. Smart, lean, and purposeful planning is key to navigating these longer funding gaps. Peter Walker #growthmarketing #startups #founders #venturecapital #saas

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A question I like to ask founders: How does your company look like in 5 years, if you are successful? Which companies are not going to exist? Which market or user behaviors are going to change? What does your product look like? The answer does not have to be a true prediction of the future, but it is a strong indicator of the founder's vision and strategic thinking.

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There should be a checklist for founders to determine if they've achieved Product-Market Fit.

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Excellent chart! A common wrong assumption about VC investments in Europe, that they are in close relation with country size, population or GDP. This map clearly shows fundamental differences amongst similar sized countries... Whether one likes it or not, there MUST be a hub impact (preferred locations), existing network benefits as well as big disadvantages for any fragmentation...

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founders: this is a good summary of why VCs reject you, though keep in mind that stellaris isn't an early stage fund. that is, it's just fine if you haven't figured out everything in the early days. but by the time you are raising series A, you need to have clarity on many fronts- Just don't wait for everything to fall in place before you startup.

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Should founders take advice from non-founder VCs? 🤔 As a founder, everyone (family, friends, the neighbors' dog 🐶 ) is constantly trying to give you advice - and especially your investors but, do you really have to listen to VCs who've never built a company themselves? On the one hand, VCs who were not founders often bring a wealth of industry experience. They analyzed hundreds of businesses from many sectors, and they see what works and what doesn't. For example, Benchmark's Peter Fenton is one of the world's top VCs, even though he's never founded a startup. His investments in companies like Twitter have shaped entire industries. Conversely, founders-turned-VCs are better able to understand the emotional side of running a business. At Vinthera, I speak with many GPs about this operational experience being a critical part of their USP to founders - the shared experience creates trust. So, should you take advice from someone who has never built a company before? Does their outside perspective bring value or is the founder's life experience more important? I'd love to hear your thoughts. What is your experience?👇

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Founders, You're WAY too early for a seed round. What make a seed round? I think this chart explains it pretty well. The best seed stage companies will be doing at least $500k in ARR or LTM revenue. With FEW exceptions a seed company can raise at or below $300k ARR/LTM. Here's a further breakdown B2B - $500k ARR B2C software - $500k - $1M B2C non-software - ~$1M While there are other things to consider such as growth, retention, burn/profitability, gross margins, etc the most important thing to remember is that seed stage investors need to see objective evidence of positive momentum. It's a competitive funding ecosystem out there. There are lots of companies who are doing $750k ARR, 2x YoY growth rate, 95% retention, and 1:1 capital efficiency who are still not going to raise. ---------------------- If you're new here, I introduce the best founders I can find to investors that'll participate in your round. Funden is the #1 fundraising platform connecting founders to capital. Founders use our tools and strategic guidance for quicker, more effective fundraises. Investors use us to receive curated, quality deal flow and broadcast co-investment opportunities to our audience of 1000+ global VCs, family funds, angel networks, syndicates, and more.

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🤯 𝗡𝗼𝘁𝗵𝗶𝗻𝗴 𝘀𝗽𝗮𝗿𝗸𝘀 𝗮 𝗩𝗖’𝘀 𝗶𝗻𝘁𝗲𝗿𝘀𝘁 𝗹𝗶𝗸𝗲 𝘁𝗵𝗲 𝗽𝗿𝗼𝘀𝗽𝗲𝗰𝘁 𝗼𝗳 𝗿𝗲𝗷𝗲𝗰𝘁𝗶𝗼𝗻… 🏃🏻‍♂️ Suddenly, doubts over founding teams, valuations, market sizes and lack of traction evaporate, doors get busted in and blank term sheets are eagerly slid across the table. When VCs sense competition, unexpected dynamics come into play. Just a touch of FOMO in your fundraising approach can make all the difference—I've witnessed it countless times. 🧠 𝗝𝗼𝗶𝗻 𝗺𝘆 𝗺𝗮𝘀𝘁𝗲𝗿𝗰𝗹𝗮𝘀𝘀, "𝗧𝗵𝗲 𝗔𝗿𝘁 𝗼𝗳 𝗙𝘂𝗻𝗱𝗿𝗮𝗶𝘀𝗶𝗻𝗴," 𝗮𝗻𝗱 𝗹𝗲𝗮𝗿𝗻 𝗵𝗼𝘄 𝘁𝗼 𝗹𝗲𝘃𝗲𝗿𝗮𝗴𝗲 𝘁𝗵𝗶𝘀 𝗽𝗼𝘄𝗲𝗿𝗳𝘂𝗹 𝘁𝗼𝗼𝗹 𝗶𝗻 𝘆𝗼𝘂𝗿 𝗳𝘂𝗻𝗱𝗿𝗮𝗶𝘀𝗶𝗻𝗴 𝗲𝗳𝗳𝗼𝗿𝘁𝘀. Check the link in the comments for more details!

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