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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

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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