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bm|t newsletter Q3 2022

Foun­ders, espe­ci­ally of start­ups with big ideas, tend to believe that they con­trol their own destiny, which is a great men­ta­lity and pro­ba­bly a key pre­re­qui­site for being a suc­cessful foun­der. Howe­ver, every com­pany exists in a set of mar­ket and envi­ron­men­tal con­di­ti­ons. Ide­ally, those con­di­ti­ons are such that com­pa­nies can pre­do­mi­nantly focus on their mis­sion and exe­cu­tion (Alpha) and not be overly con­cer­ned with broa­der geo­po­li­ti­cal, macroe­co­no­mic or finan­cial mar­ket con­di­ti­ons (Beta). Howe­ver, as any inno­va­tion inves­tor who has been around a while knows, there can be peri­ods (hop­efully brief) when exter­nal con­di­ti­ons are so impactful that they must take pre­ce­dence over the inter­nal objec­ti­ves, at least temporarily.

In this Newsletter 

Beware of Beta

This state­ment is not sug­gest­ing that in times of high Beta influence, foun­ders should stop focu­sing on their busi­nesses and become macro-ana­lysts or day-trad­ers. Howe­ver, this state­ment is say­ing that there are times when igno­ring the broa­der pic­ture (no mat­ter how well a com­pany is exe­cu­ting on its inter­nal objec­ti­ves) can lead a com­pany off a cliff. In our view, we are in a period when foun­ders need to be extre­mely cogni­zant of their envi­ron­ment and the exter­nal fac­tors that are bey­ond their company’s direct con­trol and need to think more about adjus­ting to those fac­tors rather than focu­sing only on their own work.

When exter­nal fac­tors are fore­bo­ding and most war­rant atten­tion, many peo­ple, under­stan­d­a­bly, tend to dou­ble-down on Alpha, focu­sing even more on their micro­c­osm and blo­cking out the unfri­endly envi­ron­ment. At bm|t, we are implo­ring our Inves­tee-Part­ners to resist this natu­ral incli­na­tion to look inward and ins­tead to engage in rigo­rous stress test­ing and sce­na­rio plan­ning to ensure that the pro­gress made toward achie­ving com­pany goals is not lost by being caught off-guard when a storm strikes.

In the cur­rent envi­ron­ment, storms can come in many forms: sup­ply-chain pro­blems, infla­tion-rela­ted chal­lenges, energy cost dif­fi­cul­ties, etc. And in the start-up world, where most com­pa­nies are reli­ant on addi­tio­nal inves­tor fun­ding for sur­vi­val, a clear and pre­sent dan­ger is a dry­ing up of the fun­ding mar­kets. To assess this risk, foun­ders need to com­mu­ni­cate openly with cur­rent inves­tors and con­duct exten­sive sce­na­rio plan­ning tog­e­ther. If the exis­ting inves­tors are not in a posi­tion to con­ti­nue fun­ding the cur­rent burn rate, and it is not abso­lut­ely clear which new inves­tors will be inves­t­ing in the com­pany, then all mea­su­res to extend a company’s run­way need to be analyzed.

It can be extre­mely frus­t­ra­ting, espe­ci­ally for com­pa­nies that are exe­cu­ting well, to have to modify their plans; howe­ver, there are times when it is cri­ti­cal to do so. Foun­ders should not per­ceive this rethin­king, espe­ci­ally if it is inves­tor-indu­ced, as an affront but rather should under­stand it as an attempt to pre­serve and pro­tect the value that has been crea­ted and to main­tain the company’s ability to reach its poten­tial (albeit per­haps on a delayed timeframe).

Steve Jobs pro­mul­ga­ted that to be an excel­lent foun­der one has to be able to use both the peri­scope and the telescope. The peri­scope pro­vi­des a view of the imme­diate sur­roun­dings, and the telescope allows sight fur­ther afield. The best foun­ders are always using both tools/approaches, and right now is a time when it is impe­ra­tive to keep at least one eye loo­king through the telescope.

Your bm|t Team

Welcome to the Family

Robo­tic agri­cul­ture is undoub­tedly a mega trend, and Wei­mar based E‑Terry aims to make a large impact in the rapidly gro­wing space with its extre­mely ver­sa­tile and light field robot. E‑Terry’s robot will initi­ally tar­get vege­ta­ble fields and is able to tra­verse large areas while making use of mul­ti­ple func­tion­a­li­ties like weed reco­gni­tion and rem­oval as well as crop moni­to­ring. The company’s busi­ness model tre­ats the robot as a plat­form with an open source approach to the hard­ware and soft­ware modu­les that can be added to increase the robot’s uti­lity. With top tier cor­po­rate deve­lo­p­ment part­ners alre­ady on board, we are con­fi­dent E‑Terry is well posi­tio­ned to quickly move for­ward in the robo­tic agri­cul­ture sec­tor. bm|t led this seven-figure seed round focu­sed on fina­li­zing the tech­no­logy and con­duc­ting initial sales and was joi­ned by seve­ral expe­ri­en­ced busi­ness angels.

Demo­cra­tiz­ing the power of arti­fi­cial intel­li­gence (AI) by making it acces­si­ble through an intui­tive user inter­face (UI) with drag and drop func­tion­a­lity (no code), and thus allo­wing com­pa­nies that do not have large IT depart­ments to bene­fit from AI, is the pro­mi­sing goal of Ilmenau based AI/UI. The company’s tech stack is alre­ady mar­ket tes­ted, and the appli­ca­ti­ons are nearly limit­less and highly-appli­ca­ble for a broad swath of com­pa­nies. Early top-tier part­ners have focu­sed on qua­lity assu­rance appli­ca­ti­ons, and are quickly expan­ding their use of the tech­no­logy to addi­tio­nal use cases. Com­pa­nisto and bm|t led this seven-figure seed round focu­sed on quickly gai­ning mar­ket trac­tion for AI/UI’s easy-to-roll­out SaaS offering.

Follow-on Investments

As the num­ber of IT-End­points grows rapidly, it can be extre­mely dif­fi­cult for IT depart­ments to main­tain an over­view of secu­rity, per­for­mance, and avai­la­bi­lity of all IT assets. Jena based Engin­sight’s suite of cyber­se­cu­rity tools works in a well-coor­di­na­ted man­ner to moni­tor all IT-End­points in real time and pre­cis­ely and suc­cinctly dis­play the results to IT staff. Whe­ther it invol­ves ser­vers, desk­tops, lap­tops, tablets, smart­phones, or web­sites, Engin­sight main­ta­ins a con­stant over­view of an organization’s IT infra­struc­ture. Smart Infra­struc­ture and bm|t led this round focu­sed on con­ti­nuing Enginsight’s rapid growth, and we were joi­ned by Seed & Speed and mul­ti­ple busi­ness angels.

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