European Angel Investor Landscape Matthias Hilpert MH2 Capital Value add Support Market view Pre-Seed Seed Series A Business Angel Profile Sources Domains Questions Europe Germany Berlin

1. 1STRENG VERTAULICHSOLIDLANDS
European Angel Investor Landscape
Matthias Hilpert
Berlin
PODIM
Ljubljana
2017

2. 2Matthias Hilpert, MH2 Capital
are an entrepreneur?
have raised love money?
have raised angel money?
have raised VC money?
Show your hand if you …

3. 3Matthias Hilpert, MH2 Capital
20 years Operator turned full time Investor
 Worked in telecoms globally, running a EUR1bn P&L
 Generated EUR800mio enterprise value for Private Equity
 11 years investing in public and private markets & real estate
 Angel investing since 2008 - 7 investments and 2 exits in the last 18 months
 Seed Stage subscriptions and market places from EUR10K monthly revenue
 44 years, 1 wife, 3 kids, living in Berlin

4. 4Matthias Hilpert, MH2 Capital
“Angel investors are the most critical”
Paul Graham
Founder Y Combinator
The Hacker´s Guide to Investors

5. 5Matthias Hilpert, MH2 Capital
What can Angels offer?
 Operating and investment expertise
 Investing own money
 Capability to tolerate high risk
 Personal and emotional bond
 Likely to take “entrepreneur´s perspective”

6. 6Matthias Hilpert, MH2 Capital
Pre-Seed Seed 1 Seed 2 Series A
Stage Idea, MVP Early PMF Established PMF Strong PMF
Monthly Revenue 0 5-10K 50K 100K
Funding* <100K 200K-500K 500K-1mio 2mio+
Valuations* 0.5-1mio 1-2mio 2-5mio >10mio
Investors
Grants, F&F
Accelerators & Angels
Angels &
VCs (<50mio)
Pro Angels &
VCs (<50mio)
VCs
(>100mio)
Tickets* Angels 10K
Angels 10-50K
VCs 100-300K
Pro Angels 25-100K
Micro VCs 500K-1mio
VCs 1-2mio
Reason to invest Love & Play 30x potential 10x potential 5x potential
Instrument Convertible Notes
CN &
Equity
Equity Equity
When do Angels play?
* Numbers are indications from Berlin, they may be smaller in Ljubljana and larger in London

7. 7Matthias Hilpert, MH2 Capital
Now more than 5.000 business angels in Europe
* Angel.co

8. 8Matthias Hilpert, MH2 Capital
What to look for in an Angel?
 Personal chemistry
 # of deals in the last 12 months
 % time spent on angel investing
 operator & investor experience
 industry, seniority & years of experience (network type & size)

9. 9Matthias Hilpert, MH2 Capital
Typical Angel profiles…
C-Level Corporate Exec
 2+ deal
 <10% time spent,
 40+ years
 investment only
 focus on industry network
value
Exited Digital Founder
 5+ deals
 <20% time spent
 30+ years
 strong start-up experience
 relevant start-up community
& investor network
Professional Angel
 10+ deals,
 >50% time spent
 hands-on advise (pull)
 40+ years
 strong seniority
 relevant industry/functional
experience
 relevant start-up community
& investor network
First timers
 First deal
 Strong emotional bond (perhaps limited experience)
 Big ticket/valuation (perhaps wrong expectations)
 High involvement (perhaps too much push)
 Last resort money (perhaps with non-standard terms)

10. 10Matthias Hilpert, MH2 Capital
“…in God we trust, all others bring references!”
Christoph Janz
Point Nine Capital

11. 11Matthias Hilpert, MH2 Capital
Where to find an Angel…
 Locally or at least in your country
 Other Start-up teams (comes with immediate reference)
 Start-up Management teams with successful exits are likely
to become Angels themselves
 Local first tier Accelerators, eg in Berlin: Techstars, Start-up
Bootcamp, Axel Springer Plug & Play, Microsoft
 Angel networks, eg in Germany: B-to-V, BAND, EIF
 Early stage VC referrals
 Directories: Angel.co, LinkedIn, Dealroom …

12. 12Matthias Hilpert, MH2 Capital
…and what questions should they be able to help
you answer?
 Is my product a pain killer or a nice to
have?
 How would you segment my customers?
Should I focus on 1, 2 or 3 segments?
 What is my initial target market, city A or
country B or region C?
 Can you help me to get a meeting with a
decision maker at Customer A?
 How would you build the organisation?
What´s the best split of work?
 Would you hire first a senior role or a
junior role?
 What do you think of candidate X?
 Which channels should I focus on: SEO,
PR, SEM, Print, Radio or TV?
 What should my tech stack & architecture
look like?
 How do I prioritise my technical
developments?
 How much money should I raise from
whom?
 Do I need more than 1 term sheet?
 What are good and bad terms?
 I hate my co-founder, what should I do?
 Is this ever going to work?
 …and more!

13. 13Matthias Hilpert, MH2 Capital
 Seed 1 stage
 Intro via CEO Axel Springer PnP
 3 meetings and emails with long list of
questions
 Decision to invest after first meeting due
to founders and traction
 Due diligence of approx 6 weeks
 Convertible Note EUR25K
 Money in account in approx 7 weeks
 Follow-up investment at Seed 2 round
25K
 Operational support:
 Top 100 customer interviews
 Sales process & recruitment
 Segmentation & Messaging
 Fund raising
“Having angel investors helped us
tremendously throughout a diverse
set of disciplines, from asking the
right questions to our customers, to
building up a sales organization as
well as talking to investors and
successfully raise our first Seed
round.”
Alexander Freitag
Founder Massagio
How does it work in reality…(1/2)

14. 14Matthias Hilpert, MH2 Capital
 Seed 2 stage
 Intro via selection process of
Startupbootcamp
 2 meetings and emails with long list of
questions
 Decision to invest after second meeting
due to founders and traction
 Due diligence of approx 6 weeks
 Equity EUR50K
 Money in account in approx 12 weeks
 Operational support:
 Pitch deck & Financial modelling
 Recruitment of Head of Finance
 Strategy & Technology Roadmap
 Fund raising & Investor
management
Angels are a very important player
in the ecosystem as they share your
excitement, help you with
feedbacks and take the enormous
risk, because they believe, just as
you, that your start-up will be the
next big thing”
Tim Potočnik
Founder Eurosender
How does it work in reality…(2/2)

15. 15Matthias Hilpert, MH2 Capital
What are your questions?

16. 16STRENG VERTAULICHSOLIDLANDS
Come and visit Berlin!
Thanks!