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