bm|t newsletter Q1 2021

Young busi­nesses gen­er­ally have ade­quate knowl­edge about their inter­nal devel­op­ments and plans, but usu­ally pos­sess min­i­mal knowl­edge about how their inno­va­tions fit into the exter­nal world. Mar­ket stud­ies and sur­veys of poten­tial cus­tomers are good ini­tial attempts at estab­lish­ing a rough sense of the mar­ket (and can be built into smart-look­ing TAM-SAM-SOM charts), but such stud­ies are not a sub­sti­tute for ven­tur­ing out into the world and learn­ing about the real demand for an innovation.

In this Newsletter

Testing your Footprint

This mar­ket test­ing, as opposed to mar­ket study­ing, is often char­ac­ter­ized as a busi­ness ›test­ing its foot­print›. Typ­i­cal ques­tions that need answers in this foot­print-test­ing are: how large of an imprint can we make on a mar­ket imme­di­ately, how do we posi­tion our­selves in order to leave our mark, how fast and how far can we move with­out run­ning into bar­ri­ers, what are the bar­ri­ers that are/will be imped­ing our path, are the bar­ri­ers exter­nal or inter­nal (or a com­bi­na­tion of both), are there other paths that will also lead us to suc­cess, how much will these paths cost, etc.

Ven­tur­ing into the world and test­ing your foot­print requires finan­cial resources, and this is where investors play an impor­tant role. First-time founders are often sur­prised to learn that their investors fre­quently want them to spend more money rather than less, and investors are gen­er­ally will­ing to give higher val­u­a­tions to com­pa­nies with more exten­sive invest­ment plans. The main ratio­nale behind this think­ing is that investors, espe­cially VC investors, want com­pa­nies in which they are invested to dis­cover what works and what does not work (test their foot­prints) sooner rather than later. Bet­ter to drive too fast and have more pit stops along the way than to move too slowly and miss the race entirely.

Undoubt­edly, it is crit­i­cal to match spend­ing to the phase of devel­op­ment and to the size and speed of the mar­ket oppor­tu­nity. Gen­er­ally, VC investors want their investee-part­ners to con­stantly be seek­ing oppor­tu­ni­ties for push­ing the bound­aries of the busi­ness and to be mov­ing for­ward faster. This men­tal­ity is espe­cially applic­a­ble for mar­ket/busi­ness-model-based busi­nesses (as opposed to IP-pro­tected tech-based busi­nesses), and has become more wide-spread in recent years due to the increas­ing speed at which mar­kets move.

Founders can some­times be ret­i­cent to invest rapidly in foot­print-test­ing, often due to wor­ries about shrink­ing fund­ing run­way. This is where strong com­mu­ni­ca­tion between founders and investors is essen­tial to ensure both par­ties are in synch about why the money is being invested and that both par­ties under­stand the pos­si­ble need for fur­ther invest­ment ear­lier than pre­vi­ously thought.

Impor­tantly, for investors, it is much eas­ier to make a fol­low-on invest­ment in a com­pany that expended cash more quickly than ini­tially expected in order to find a good entry into a mar­ket than to invest again in a com­pany that has yet to ascer­tain a mar­ket for its inno­va­tion. Fur­ther­more, because val­u­a­tions increase sig­nif­i­cantly with proof-of-mar­ket and scal­a­bil­ity, fre­quently more aggres­sive invest­ments in foot­print-test­ing ulti­mately lead to sig­nif­i­cantly less dilu­tion for the founders.

Test­ing your foot­print as a busi­ness is about sig­nif­i­cantly more than what investors pre­fer; it makes sense from a purely inter­nal and oper­a­tional per­spec­tive, as com­pa­nies gain valu­able infor­ma­tion, insights, and con­tacts in the process. Addi­tion­ally, test­ing your foot­print cre­ates busi­ness option­al­ity, mean­ing when a busi­ness is aggres­sively test­ing for new oppor­tu­ni­ties, it often encoun­ters unex­pected and for­tu­itous paths. As Goethe said:

»What you can do, or dream you can, begin it; bold­ness has genius, power, and magic in it.«

Your bm|t Team

Exit

Along with TGFS, Lift Hold­ing, and busi­ness angels, we cel­e­brated a suc­cess­ful exit in Q1 with the sale of evan.network to Blockchains Inc. evan´s dig­i­tal iden­tity tech­nol­ogy is a great fit for Blockchains and will help the com­pany real­ize its vision of using blockchain-based tech­nolo­gies to greatly enhance busi­ness and other areas of soci­ety where dig­i­tal trust infra­struc­ture can play a key role. We are con­fi­dent that evan will make an excel­lent con­tri­bu­tion to Blockchains reach­ing its ambi­tions, and we wish all involved much success.

For more details please read the full press release.

Welcome to the Family

Becom­ing a pio­neer and lead­ing com­pany for high-secu­rity quan­tum com­mu­ni­ca­tion is Quan­tum Optics Jena (QOJ) GmbH´s bold aim. The lat­est spin-off from the Fraun­hofer Insti­tute for Applied Optics and Pre­ci­sion Engi­neer­ing (Fraun­hofer IOF) devel­ops quan­tum-based solu­tions for state-of-the-art com­mu­ni­ca­tion sys­tems. As quan­tum com­put­ing races for­ward, ensur­ing com­mu­ni­ca­tions remain secure will require guard­ing against quan­tum threats with quan­tum pro­tec­tion – exactly what QOJ´s entan­gled pho­ton tech­nol­ogy pro­vides. This well-sized, seven-fig­ure ini­tial financ­ing round from FTTF (Fraun­hofer Tech­nol­ogy Trans­fer Fund), ELAS Tech­nolo­gies Invest­ment GmbH, and bm|t and will allow QOJ to final­ize its already highly-devel­oped tech­nol­ogy and to enter the mar­ket with a viable and scal­able prod­uct in a mean­ing­ful way as early as next year. We are expect­ing atomic suc­cess from QOJ.

For more details please read the full press release.

Poly­tives devel­ops novel addi­tives for plas­tics and pos­sesses a highly-inno­v­a­tive process for tai­lor­ing poly­mers in an eco­log­i­cally-friendly man­ner. The company´s tech­nol­ogy employs highly-branched poly­mers in order to adjust mate­r­ial prop­er­ties such as vis­cos­ity and elas­tic­ity. We are delighted to have co-led this ini­tial seven-fig­ure invest­ment round with a well-suited cor­po­rate investor, VIS NOVA Hold­ing, the invest­ment arm of Dier­sch & Schröder — a Bre­men-based fam­ily-owned com­pany that holds and devel­ops invest­ments in the oil, chem­i­cal and young busi­ness sec­tors. With this invest­ment, Poly­tives will final­ize its tech­nol­ogy and should quickly achieve com­mer­cial-scale mar­ket entry.

read more…

Follow-on Investments

Although our cur­rent fund man­dates did not per­mit us to invest in this cap­i­tal raise, it is always note­wor­thy when a bm|t Investee-Part­ner raises 75 Mio. USD, as InflaRx did this quar­ter. This cap­i­tal, plus the poten­tial addi­tional cap­i­tal that can be raised through war­rants as part of this deal, ensures that InflaRx will be able to fund many of its impor­tant clin­i­cal tri­als through to sig­nif­i­cant mile­stones in the years ahead. We remain a sig­nif­i­cant share­holder and con­tinue to have high aspi­ra­tions for InflaRx and the company´s first-in-class com­pound IFX‑1 across mul­ti­ple diseases.

For more details please read the full press release.

Every­one knows that you do not make money with print­ers; you make it with the ink (con­sum­ables). Ilme­nau-based Lean Plas­tics believes that the same phe­nom­e­non will play out in 3D print­ing and has con­se­quently focused on opti­miz­ing plas­tic con­sum­ables for 3D print­ing. The com­pany already has a strong cor­po­rate investor with excel­lent exper­tise in the field of 3D print­ing, and we are extremely opti­mistic that Lean Plas­tics will play a sig­nif­i­cant, and highly-prof­itable, role in the addi­tive man­u­fac­tur­ing rev­o­lu­tion. With this invest­ment round Lean Plas­tics will pre­pare com­mer­cial scalability.

Read more… 

Save the Date › Investor Days Thüringen 2021

On June 15th and 16th, Investor Days Thürin­gen (IDT), the pre­mier early-stage pitch event in mid­dle Ger­many, will be wel­com­ing over 500 par­tic­i­pants, with approx­i­mately 30 start-ups pre­sent­ing their inno­va­tions and visions. We are pre­pared for either a fully-dig­i­tal ver­sion like last year or a hybrid event. Of course, we are hop­ing for improve­ments in the pan­demic to be able to at least enjoy an out­door beer and bratwurst with you.

We have now been in our inspir­ing new offices for three weeks and are almost done with the fin­ish­ing touches. As a core part of our build­ing is the his­toric Erfurt Heizw­erk, which pur­pose­fully and artis­ti­cally has remained in “indus­trial loft” style, not all vis­i­tors rec­og­nize right away that the work is com­plete. 🙂 We are hop­ing for improve­ments in the pan­demic so that we can soon wel­come all our val­ued part­ners and guests to our new home.

If your part­ners or col­leagues might be inter­ested in our reg­u­lar updates,
please don’t hes­i­tate to share this link.

ALSO SEE OUR OTHER NEWSLETTERS

Q1 2021 | April, 15 2021
Q4 2020 | Jan­u­ary, 22 2021
Q3 2020 | Octo­ber, 20 2020
Q2 2020 | Juli, 17 2020
Q1 2020 | April, 17 2020
Q4 2019 | Jan­u­ary, 15 2020
Q3 2019 | Octo­ber, 17 20019
Q2 2019 | August, 14 2019
Q1 2019 | May, 3 2019
Q4 2018 | Feb­ru­ary, 4 2019
Q3 2018 | Octo­ber, 16 2018
Q2 2018 | July, 23 2018
Q1 2018 | May, 24 2018