Ven­ture invest­ment in the start-up world is gen­er­ally raised and deployed in order to “(blitz)scale the orga­ni­za­tion”, “cap­i­tal­ize on a mar­ket win­dow”, “accel­er­ate time to mar­ket”, “grab mar­ket share”, and con­duct many other activ­i­ties where the oft-used say­ing that Time is Money, mean­ing if one acts quickly, one can gen­er­ate large returns, is absolutely applic­a­ble. How­ever, in the cur­rent envi­ron­ment, terms like “secur­ing the next mile­stone”, “achiev­ing breakeven”, “increas­ing time-of-flight”, etc. have quickly reemerged in investors’ and founders’ lex­i­con. All par­ties under­stand that ensur­ing sur­vival in order to be able to pur­sue big value-cre­at­ing oppor­tu­ni­ties, albeit with a delay, is of para­mount importance.

This rapid tran­si­tion from a Time-is-Money men­tal­ity to a Money-is-Time men­tal­ity requires a high degree of men­tal agility and cor­po­rate flex­i­bil­ity. Exem­plar com­pa­nies are trim­ming fat and quickly reset­ting pri­or­i­ties, with ini­tia­tives that have shorter pay­back peri­ods and higher returns on invest­ment tak­ing prece­dence. Long-term, strate­gic goals have to be tem­porar­ily relin­quished for shorter-term, must-accom­plish objectives.

In Thürin­gen, we are not immune from this abrupt tran­si­tion; how­ever, due to our focus on B2B and deeper tech, where mar­ket pro­tec­tion arises more from intel­lec­tual prop­erty and unique know-how rather than from speed-to-mar­ket and first-mover advan­tages, we believe that the adjust­ments we and our Investee-Part­ners must make are less rad­i­cal than in other parts of the ven­ture world. Of course, every­thing is rel­a­tive in the sense that if a com­pany already has a high degree of cap­i­tal effi­ciency and is on a tight bud­get, even a slight decrease in access to cap­i­tal can be impactful.

Cer­tainly, we are not sug­gest­ing com­pa­nies should idly wait out the clock and hope that an over­all recov­ery will lead to eas­ier fund­ing – that is not a viable strat­egy. We are empha­siz­ing that hav­ing an absolute focus on achiev­ing (with opti­mal cap­i­tal effi­ciency) the mile­stones that will trig­ger or moti­vate fur­ther invest­ment is essen­tial; because with a smaller invest­ment bud­get at hand, investors will pri­or­i­tize the most mean­ing­ful progress.

We do not want to sound overly alarmist; how­ever, we believe it is cor­rect to draw atten­tion to the real­ity of the cur­rent envi­ron­ment and to plan and act accord­ingly. In response to this envi­ron­ment we have redou­bled our efforts to raise aware­ness of the com­pelling invest­ment oppor­tu­ni­ties we have in Thürin­gen. These efforts are bear­ing fruit: we are pro­gress­ing well on clos­ing mul­ti­ple size­able invest­ment rounds at the moment. We remain opti­mistic that we are also ben­e­fit­ting from a sec­u­lar growth trend (Thürin­gen is being dis­cov­ered by many more investors), which helps counter the effects of the cur­rent gen­eral downturn.

Although this down­turn will remove some mar­ket excesses, a sig­nif­i­cant amount of invest­ment cap­i­tal remains ready to be deployed in value-cre­at­ing com­pa­nies as soon as the head­winds ease. Good for­tune will come to those who are well pre­pared and well posi­tioned to cap­i­tal­ize on the oppor­tu­ni­ties that can quickly reemerge. Through­out 2022, we and our Investee-Part­ners have become more resilient and remain poised to make large leaps forward.

Your bm|t Team