VCs talk about angels, superangels and incubators

Steward Townsend of Oracle and Jon Bradford of The Difference Engine moderated a panel that wheeled in three guys to chat about the state of startups and the kind of investments they might get. Townsend is wearing an astonishing floral shirt. But he did use to work for Sun.

Sarik Weber of Hanse Ventures – a new company based in Germany – said it’s a good time to start companies. But many venture capitalists and incubators don’t understand search engine optimisation and don’t want to become part of the “ecosystem”. Incubators have to offer value to company founders because otherwise they can do it by themselves. You need angels that have experience in the industry. Hanse has founded five new companies and forged them into the kind of companies Hanse thinks they should be.

Hanse only takes half of the company they found and founders normally join up with no money. It’s a lot to do with gut feeling and analysis of the markets. The first goal is to make these companies profitable. Once a company is profitable Hanse has all of the options. Hanse has a team of 20 people including designers, admin people and search engine optimisation as part of the deal.  These services are mainly free.

Mattias Ljungman from Atomico said his company dealt with the founders of Skype and had the idea of making a business that was more entrepreneur centric – much as happened in Silicon Valley. Atomico invested in both Europe and the US and co-invested with Sequoia, Mayfield, General Catalyst and others. He said he’d noticed there was a bit of a gap in the market because there weren’t many investors in the opening stages. Atomico raised $165 million in 2010 through institutional investors. Atomico has people based in Brazil, in China, in Europe and the US. There’s about 10 people involved but his company has to think globally.

Atomico focuses on the early stages, including seed investment and money up to four or five million dollars. Venture, said Ljungman, is about thinking really big. He said Atomico is not interested in companies that are going to make less than a billion dollars. Europe has been very successful in the last couple of years and there’s more activity even in a difficult market. “We have to think big,” he said.  He looks at Europe as an emerging market.  There’s a much broader spectrum of capital these days, including entrepreneur based investors.

Atomico has invested in 10 companies, and can go in at a couple of hundred thousand. It invests in companies with good teams, and strong products. The percentage of company Atomico takes is anywhere between 25 and 35 percent. The company has had one exit so far.   The best way to start a business is to think about the next amount of money you want to raise. The company focuses on consumer businesses because those businesses move a lot quicker and you find out very soon whether a  product or business is going to be successful.

Roberto Bonanzinga, of Balderton Capital said his company’s bread and butter is Europe, but has about 20 percent outside Europe, including China and the USA. His company likes to work with people who have spark. Most investments are first money, but does invest in more established businesses, including seed money. Balderton believes the spotlight should be on the entrepreneur, not on his own company.