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bm|t newsletter Q4 2022

Most founders are accus­tomed to hear­ing ven­ture investors repeat the phrase “Time is Money”, but there are peri­ods when under­stand­ing that Money is Time is also impor­tant for all par­ties. With the under­stand­able decrease in investor risk appetite in the cur­rent tragic geopo­lit­i­cal and chal­leng­ing macro­eco­nomic envi­ron­ment, now is clearly a period for increased focus on cap­i­tal effi­ciency and run­way prolongation.

In this Newsletter 

Money is Time

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

Exit

Only 21 months after our ini­tial invest­ment, Poly­tives devel­oped so strongly that our cor­po­rate co-investor, the Bre­men-based Dier­sch & Schröder group, decided it wanted to increase its share­hold­ing in the highly-inno­v­a­tive poly­mer-based addi­tive com­pany. In a highly-suc­cess­ful exit for bm|t, we sold our shares to Dier­sch & Schröder, know­ing that the match with Poly­tives and Dier­sch & Schröder is a great one and that Poly­tives’ future will be even brighter with the increased com­mit­ment from its strong cor­po­rate investor. We are grate­ful for our time as an investor in Poly­tives and as a co-investor with Dier­sch & Schröder and look for­ward to fol­low­ing the company’s impres­sive and impact­ful inno­va­tions that are rev­o­lu­tion­iz­ing the world of plas­tics pro­cess­ing.

Follow-on Investments

Wein­ert Indus­tries con­sum­mated its man­age­ment-led buy­out of Leoni’s fiber optics cable busi­ness in May of this year. A carve-out of this size and com­plex­ity (mul­ti­ple loca­tions across con­ti­nents) is, of course, a major under­tak­ing. The smooth­ness of the trans­ac­tion and oper­a­tional tran­si­tion as well as Weinert’s strong cus­tomer growth in this chal­leng­ing envi­ron­ment exceeded even our most opti­mistic expec­ta­tions. To sup­port the strong growth of the busi­ness and Weinert’s fur­ther inter­na­tional ambi­tions, bm|t increased our invest­ment with a seven-fig­ure amount. With Wein­ert Indus­tries, a global cham­pion from Thürin­gen is quickly emerg­ing, and we are extremely pleased to play an instru­men­tal role in the company’s impres­sive development.

Investor Days Thüringen — Save the Date!

Foto: Markus Schlevogt 

June 14th and 15th, Investor Days Thürin­gen (IDT), the pre­mier early- and growth-stage pitch event in mid­dle Ger­many, will wel­come over 500 par­tic­i­pants, with approx­i­mately 60 start-ups pre­sent­ing their inno­va­tions and visions. After last year´s ener­getic return to a live event, we are again excited to offer our guests great live pitches, beers & brats and much more! Mark your cal­en­dars – we will see you in June!

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ALSO SEE OUR OTHER NEWSLETTERS

Q4 2021 | Jan­u­ary 25, 2022
Q3 2021 | Octo­ber, 25 2021
Q2 2021 | July, 22 2021
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