Serial entrepreneur and investor Andreas Etten: “We aren’t a VC, we’re business partners”

Andreas Etten
Andreas Etten

A true veteren of the internet scene, German serial entrepreneur, angel and investor Andreas Etten has gathered enough experience in the 13 years he’s worked in the industry to know how to spot a good thing when it’s coming. His investment firm Grey Corp focuses on early-stage investments in online companies, while he himself cofounded  be2, C-Date, medx and Mexad (to name a few) and was on the executive board of Scout24-Group – the leading German dating site.

We caught up with Etten before he heads to Berlin to speak at the Heureka Conference this May. He gave us some insights into the kind of businesses he’s keen to invest in and told us why a plethora of incubators isn’t necessarily a negative thing for the Berlin startup scene…

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Hi Andreas, who are you and what are you doing?

I am a businessman and have founded and built up multiple internet firms since the early 90s. Before that, I founded a company and sold it after three years. Since 2005, I’ve been investing with my two partners Jan Beckers and Robert Wuttke in selected startups through our investment company Grey Corp.

Seed SummitWho do you invest in and when? How much of a shareholding do you take?

Our core is internet or technology businesses that can be easily internationalised and where our expriences are relevant – normally in B2C or in SME areas. We ourselves operate different businesses in over 30 countries and try to help the companies we have a shareholding in by connecting them to this infrastructure.

We usually get involved in early-stage funding. We make pre-seed and seed investments or we launch companies with founders. Sometimes we want to launch our own idea and we look for the right business people to execute it. We also sometimes take shares in successful and established companies, if we can contribute to its development. We only rarely make our first investment in a Series A or B round.

Can you name some examples from your portfolio?

Young examples from Germany include Navinum (an online wine recommendation app) or Everbasics (fashion for men), we work closely together with these companies. More typical angel investments we’ve made are, for example, Kreditech (a credit scoring company) or Justbook (last-minute hotels). In total, we have about 15 investments alongside our main business.

You name yourself a cofounder rather than an investor. Why?

We aren’t a VC or typical angels, we are business partners and advisors. We become intensely involved in the companies we invest in and try to provide them with advice.

With businesses in which we are strongly engaged we do often work with them for longer phases, for example helping them with strategy, entering new markets, marketing, internal organisation or, naturally, external financing rounds.  We’ve done this ourselves enough times to know how to go about it. But the businesses have to want us to get involved – there is a clear pull principle.

Aside from this, we only invest our own money.

Do you buy into the hype around the Berlin startup scene?

The hype? I think there is lots of creativity and lots of talent here at a low cost. The web, media and, to a lesser extent, the tech area is growing and is definitely an interesting ecosystem.

How do you see this startup ecosystem developing in the future?

I hope more startups will grow to a significant size. I also hope for some more substantial exits to fire up the angel scene and to build the reputation and relevance of Berlin internationally.

launch fastAt the moment, it seems like new incubators are launching every week in Berlin. What is your opinion on the incubator system? Do you think they play an important role in launching successful startups?

Incubators certainly help the startup scene. However, too many are just in copying mode. For every visible and successful startup in the US we see three to five copycats within a few months coming from Germany, which leads to high competition and is potentially endangering to all startups. This bends the logic from “survival of the fittest” to “who has more cash to stamp down all the others”. Which is, in a way, simply the way it is – that’s a neutral observation.

How do you think your experience launching your own companies has helped you with investing?

If in our space of experience, certainly a lot. We can better evaluate the mechanics of the business model and likelihood that assumptions will materialise. And yet… to build a successful company a good team and a good business model is not sufficient. You need luck and good timing as well. Investments, or engagements, in very early stage remain high-risk.

Want to hear more from Andreas, along with other top-notch speakers from VC, startups and the tech industry? Get your ticket to this year’s Heureka Conference – but hurry, the early bird tickets are running out!

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Image credit: Flickr users Images_of_Money and Jim Sneddon

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