Investor Spotlight: Philipp Schroeder from ACTIVE on Spain, the euro crisis and €54m

Christopher and Philipp
Christopher and Philipp

Philipp SchroederACTIVE Venture Partners has just raised a new €54million fund focused on startups in Spain (€44m) and other parts of Europe (the rest). Oooferton, Restalo, Whisbi Technologies, Zyncro and Barnebys are already in the portfolio with the firm expecting three more to be announced by the end of the year.

We asked Philipp Scroeder, who co-founded ACTIVE in 2002 with Christopher Pommerening and Ricard Söderberg, about life in Barcelona, how the euro crisis will affect Spanish startups, changing the world – and the three companies he wishes he’d invested in:

How did you end up running a fund in Spain?

Christopher and I are both from Hamburg – we know each other from the first day of school, actually…

Christopher and PhilippInvestors in the making – Christopher Pommerening and Philipp Schroeder, age six

We created a company in 1999 called VCMORE, which was like a corporate finance boutique. Christopher went to Spain to set up Autoscout there so with VCMore, our first office was in Hamburg (1999) then London (2000) then we opened up a subsidiary in Barcelona as well. One day, after all the bubble burst, we said, we don’t want to intermediate deals anymore, we want to launch our own VC fund.

I think at that time we were 28. Everyone thought it was quite ambitious but we did it.

The economic crisis is much more pressing in Spain than in Germany. How do you see this playing out?

Spain is in a crisis because they didn’t make the change from an industrial society to a more knowledge-based society – what London did 25 years ago, what Germany did maybe 15 years ago. They’ve realised now that this is needed.

It’s not bad to invest right now in Spain. With venture capital, you invest in companies that profit more from structural changes than from the general economic climate. Obviously it’s not as easy as if the economy is booming, but the growth rates we have here – in e-commerce and in communication, in mobile usage and mobile internet – are huge. They’re bigger than they are in Germany because we come from a much more immature situation than what we have in Germany.

Do your portfolio companies aspire to be global?

Yes, otherwise we wouldn’t invest. We don’t invest in companies that only want to serve the national market. The companies that we invest in have the aspiration to go global – therefore we look for international teams. Many of our Spanish portfolio companies, for example, are comprised of Spaniards coupled with international  entrepreneurs (many serial)  who come to Barcelona because they love to live here.

BarcelonaPasseig de Gracias, Barcelona – image copyright Moyan Brenn

What are you most excited about for future internet businesses?

The usage of internet via mobile is growing like hell and it’s becoming more dominant. Anything to do with mobile advertising, mobile transaction-based business models – this, we’re really excited about. Internet business models – software as a service, cloud-based business models as well.

Obviously you’re pretty excited about your portfolio companies… What’s another company, anywhere in the world, that you wish you’d invested in?

Flipboard – incredible UI aggregating my most relevant content, what an amazing look and feel and so simple… Pandora, unfortunately not available in Europe, but the best music recommendation engine, I know. Also, Trovit from Spain, Europe’s best aggregator of classifieds.

Do you invest in companies you think will make the world a better place?

I wouldn’t put it quite that way. I’d say we really look for teams and want to support teams to be successful, to then become a basis for more and more entrepreneurs as offspring from those businesses… And, most probably, once they become more wealthy, take a bit more of a philanthropic route and support in a social way as well.

Active Venture PartnersACTIVE Venture Partners – aim to close three more portfolio deals by the end of 2012

What’s the most common mistake you see young founders make?

Let me think about it… Being too nitty-gritty with regard to percentages that they give away. I always tell people ‘take the money and run’ – I mean, take as much money as possible. You’re faster and maybe have less percentage but of a bigger pie. A lot of people really have a problem with giving away too much of a percentage but then they end up raising funding rounds every six to eight months. If you do that, if you have to focus on the funding round, you’re not focused on your business – so the KPIs deteriorate.

If you raise funds, you have to raise funds for at least 18 months – focus on your business, excel and be successful. If you’re always raising funding rounds, it can be a vicious cycle.

What would you be doing if you weren’t doing venture capital?

I’d be an entrepreneur. I see myself as an entrepreneur. I set up my own companies together with my partners, obviously in the VC field, but we set those companies up ourselves. So I’d be an entrepreneur, but probably setting up a tech company.

What do you like most about living in Barcelona?

BarcelonaFirst of all it’s the weather. Then I would say the international crowd here…

A personal thing? The love of the people towards children, irrespective of age. I’ve got children and I love that people really love children here. You see, in some other European countries, that old people get really annoyed by kids being loud. That’s totally different here. That’s something I really value.

L’example, Barcelona – image copyright Moyan Brenn

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