There’s always a bit of excitement among entrepreneurs when big-name venture capitalists roll into town. So, when Silicon Valley man; David Blumberg from Blumberg Capital arrived in Berlin, budding start-up groups were more than happy to speed-pitch their ideas to him over an afternoon long event. “My firm is following up with a number of them,” said the Managing Partner: “Overall, I was impressed by the level of technical talent and business model acumen.” Blumberg met up with about two dozen companies in the German capital; “Berlin is attractive as an investment hub for many reasons, including a low-cost operations base with a good supply of technical talent, an appealing young cosmopolitan culture, and at the center of a strong region of Europe,” and he’s looking at investing in more young technology companies here. Of course, Germany in general needs to continue to promote policies favoring innovation, entrepreneurship and investment capital as there is a lot of international competition from other strong entrepreneurial ecosystems in Tel Aviv, London, Barcelona and Dublin.
Blumberg Capital is unusual as a Silicon Valley based Venture Capital firm focused on early stage investments, because it invests far beyond Silicon Valley – many portfolio companies are in New York and even abroad. Blumberg’s current portfolio includes companies from Canada, Israel, India, and now Germany. The city’s successful start-up models are no stranger to Blumberg. Back in October this year, the VC joined German VC Earlybird, to invest $10-million in Madvertise: Berlin’s rapidly expanding platform for mobile phone advertising.
What makes Blumberg go ‘cha-ching’
So, what do profile investors look for before delving into their pockets? “Our view is that the world is full of talented engineers and entrepreneurs, and we need to seek them out.” said Blumberg. “We particularly focus on helping those entrepreneurs enter the US market and thrive. Engineers can stay anywhere they can be found, but the market facing operations often need to be close to the target market. The downside of Silicon Valley is that there is a lot of competition for engineering talent.”
Blumberg cites three key themes as “hot” for investors now:
1. Leveraging Social networks – taking advantage of the “social graph” and peer to peer actions
2. Nearly everything is going mobile, and location based apps enable radical new functionality
3. e-commerce is growing very rapidly and will change retailing, supply chain and payments industries drastically
So, what does his team look for when assessing a company? Blumberg summarizes it simply as the “Six T’s”:
- Theme: What does the product/service do? What big problem does it solve?
- Team: Who will lead the mission? Domain expertise, vision and persistence are key ingredients.
- Terrain: What are the market conditions? What are the competitive dynamics and how do you win?
- Timing: Is the product too early for its market? Is it too late? What are your go to market plans?
- Technology: What’s the key edge the company has over its competitors? How is your IP protected?
- Terms: How much money does the venture need, what are the terms under which we can structure a deal?