55 investments, one entrepreneurial life! With Andy Goldstein | Serial Entrepreneur & Investor (#60)

00:00:00: And the importance of that is at ninety-nine or pick a number percent, all breakthrough technologies we've seen in our lifetime have come from startups.

00:00:10: VC what I love about this market?

00:00:13: it's really only asset class which consistently invest in the future of humanity.

00:00:19: Like seriously changing the world, right?

00:00:21: I mean look at Uber.

00:00:22: Nobody had ever... The idea of getting a car or taxi which came exactly to where you were and You got out And didn't pay it and could find out Where It was Now its second nature but when they Were doing that nobody Was doing it.

00:00:35: Yeah..and i really wanted To know why Corporates and startups Didn't fit together.

00:00:42: Welcome to another episode of Finance Data People.

00:00:45: My name is Sascha Hagenmiller, and in this episode I speak with Andy Goldstein.

00:00:49: As you can already hear the sixtieth episode of finance data people has done in English as we wanted To see how this podcast might perform In an international audience And also as it's Andy's mother tongue.

00:01:00: Andy Has a remarkable life as he will here in his podcast and helped companies such as Flixbus and Trade Republic to become successful.

00:01:08: now at sixty five years old Being younger than ever, he's active again with his son Remy at Venture University and also VU Capital Partners.

00:01:18: Andy definitely cannot stop to be passionate about entrepreneurship.

00:01:21: And if you want to see that live please stay on this episode.

00:01:26: Have fun!

00:01:26: See ya there.

00:01:27: Welcome to Munich, Andy.

00:01:30: Feel right at home here

00:01:32: Amazing.

00:01:33: So for everyone who is listening This podcast usually we are at Episode Sixty.

00:01:37: now We decided to do it in English because it's your mother tongue.

00:01:41: So, um... I'm very excited to be here and it is an honor for me to have you here!

00:01:56: And uh yeah i think we will go through an amazing and inspiring entrepreneurial journey that you did throughout your life.

00:02:06: may i ask how old are Sixty-five.

00:02:10: Okay, so a lot of things happened?

00:02:13: Yes and sixty five is the new forty five.

00:02:15: isn't that what you say?

00:02:16: somebody

00:02:17: feel younger than ever.

00:02:18: I do know i felt quite good

00:02:20: awesome.

00:02:21: Maybe let's start at the beginning.

00:02:23: At like, I don't know.

00:02:24: where did you study?

00:02:25: When did your study come?

00:02:27: from the US to Germany.

00:02:28: in eighty three i understood yes what happened before

00:02:31: i'm a filiboy philadelphia uh... studied entrepreneurship and international business.

00:02:36: that they are university of pennsylvania uh... was in the worton undergrad program uh... couldn't find anyone to hire me around their international business at the age of twenty two despite my Ivy League education and I decided with my college roommate to start my own company.

00:02:54: Directly after studies?

00:02:55: Right, right

00:02:56: after studies yeah okay well.

00:02:57: so we graduated in June and i arrived in Vienna actually in nineteen eighty-three December.

00:03:06: Okay So you graduated You went on a plane

00:03:13: I graduated, we started working on the business concept which was bringing US software over.

00:03:20: We saw that IBM PC is just launching and thought there's going to be a big need for software in Europe that the Americans would be faster than the Europeans.

00:03:31: And so we decided to go into the German market because we figured, The Americans would go to England themselves.

00:03:37: We needed a language barrier—the fact I didn't speak any German or it didn't slow us down.

00:03:43: and when I announced moving to Germany my dad said well friend who used to be a ski instructor, he's the famous attorney in Vienna.

00:03:53: Why don't you go there?

00:03:54: So I ended up in Vienna for two and half years and then moved the company to Munich in eighties six.

00:04:00: but how did that work?

00:04:01: so In America You do market analysis or whatever we

00:04:04: did.

00:04:04: We actually hired some.

00:04:06: we were warden undergrads.

00:04:07: We hired a bunch of grad students To analyze the market And they pretty cleverly came off with at The largest market For translated software in business sense was Germany.

00:04:20: France was using this funny thing called an Apple computer.

00:04:22: back then nobody thought took that seriously.

00:04:25: So we went to Germany.

00:04:26: Okay,

00:04:27: and just into the blue basically

00:04:29: in to the blue.

00:04:30: Yeah It was one of those things where if I had known it wasn't possible?

00:04:33: I wouldn't have done it but i didn't know.

00:04:35: so I did.

00:04:38: There's a podcast guest who is Christoph Kling from Antler... I don't know If

00:04:42: you know Antler.

00:04:43: yeah venture

00:04:44: capital.

00:04:44: And he said The best founders can systematically exclude risk from their thinking, so that I think it's a good example.

00:04:53: That's a great way of saying

00:04:55: in that regard.

00:04:56: So you came at eighty three and then immediately started with that?

00:04:59: Yeah Well actually when skiing for the first month-and-a-half And Then i got started probably really full power into January February With

00:05:06: your partner

00:05:08: or my partner was In The United States.

00:05:11: he Was Obtaining rights to our first software.

00:05:15: It was a word processing software long before Microsoft Word launched and so there was a product called micro pro words.

00:05:24: star Was the big competitor in word perfect?

00:05:27: So he got that.

00:05:29: He got the right to the software.

00:05:30: I went over, and I set up the company.

00:05:32: understood it Austria or in Germany?

00:05:35: yeah We originally setup in Austria as a guess and behind And then we moved.

00:05:40: we realized fairly quickly that the big market was, of course in Germany.

00:05:44: We were constantly driving back and forth when decided an eighty six to move to Munich.

00:05:49: Okay?

00:05:49: How did company develop?

00:05:52: with like riskouts revenues or employees are

00:05:55: so it.

00:06:04: It was a kind of an interesting path.

00:06:06: What actually happened, it took us about a year to get the first product out.

00:06:10: I was planning on going to law school.

00:06:12: so what happen?

00:06:12: Was i had graduated college and been accepted into Law School?

00:06:16: I Announced that I was moving to Germany To start.

00:06:19: this company didn't go over real well at home.

00:06:22: I said no I'm taking A Year off um...I Got The Company up And Running.

00:06:28: Everything was done by bootstrapped, got people to do the translation based on revenue and things like that.

00:06:36: We switched.

00:06:36: my partner came over.

00:06:38: I started law school in On The Third Day of Law School My investor main investor who is my entrepreneurship professor.

00:06:47: I called him.

00:06:48: Hey, you need to transfer that ten K and he said oh You don't think i'm really gonna invest in a company where some guy is over in Australia?

00:06:55: I said no not australia austria.

00:06:58: He said yeah wherever you are go to law school And I Called them the next day.

00:07:02: i said uh professor bass i need The tenth k and he Said We talked about this yesterday and i said Yeah but yes This morning i dropped out of Law School so i need the money.

00:07:12: So We then raised family, friends from fool rounds and got the company up and running.

00:07:19: Very unfortunately in nineteen eighty eight about to break even my dad is killed in a car accident on highway And I end up moving back to the states.

00:07:30: Company doesn't do well without both of us there actually close it down and found out that there was something in Germany called Konkursfürsteppung, you better pay attention.

00:07:43: I decided i didn't want that on my record And I decided to stay clean up.

00:07:49: We restructured the whole company.

00:07:52: turns out we were about eight hundred fifty thousand in debt.

00:07:55: um...we had kind of overlooked a few things.

00:08:00: Yeah stayed three years..We worked off all the debt , we have to fire half the company.

00:08:04: one day tried to find everybody jobs, one of them became my biggest client years later.

00:08:10: So I have a nice saying which is that every breakdown as the opportunity for breakthroughs.

00:08:15: so... That was big one but we ended up paying everyone back.

00:08:19: two-to-one took fourteen years and then decided were going be ski buddies.

00:08:26: My partner and I still are And i went start in second company.

00:08:31: in ninety seven he started his company And my second company was quite successful.

00:08:37: Did you sell it then or close?

00:08:38: We didn't

00:08:38: sell, we actually paid everybody out to one and split the assets that were left in there.

00:08:45: I took Twenty percent, he took eighty percent.

00:08:48: Somehow that seemed like a fair deal and we both moved on.

00:08:52: Okay

00:08:52: in ninety seven.

00:08:53: then

00:08:53: In ninety end of ninety six We closed.

00:08:55: at ninety-seven I started media gold my second company.

00:08:58: What was said?

00:08:59: That Was also bringing us software over focused On consumer software.

00:09:04: so Media mark Saturn.

00:09:07: i think we brought three hundred software products over during the years.

00:09:11: We would translate it, we would put it out in the market.

00:09:15: media gold was also I. there was a woman who hired me.

00:09:21: she's running A Big American Software Company In England.

00:09:24: She hired Me to run their German business and i convinced her To leave And become my partner.

00:09:29: we opened England together.

00:09:30: then we took Over our little French company.

00:09:32: that Was ninety seven ninety eight ninety nine.

00:09:35: We took over the French company and we sold to a French public company.

00:09:38: When?

00:09:38: In two thousand three?

00:09:40: Okay, well that was quick then.

00:09:42: so it's six year endeavor.

00:09:44: Yeah with a six-year endeavor but twenty years exactly almost of the day That I started my first company.

00:09:50: So okay yeah

00:09:51: Which kind of software was that than...we were

00:09:53: really strong in?

00:09:55: uh..in utility softwares or lot of antivirus things like Dr Salomon's Antivirus Was big named But everything children's software.

00:10:05: So anything that you could buy in a media marked or something like that, in a box if you remember that for under let us say two hundred euros.

00:10:16: That was our

00:10:17: CDs.

00:10:17: and

00:10:18: yeah we were printing CDs And obviously We went online.

00:10:21: but that Was also part of why I sold the company.

00:10:24: i thought that i was going to be too small And I wanted to join an international group and that was AvonQuest.

00:10:30: Okay,

00:10:32: the business model itself is basically existing American software.

00:10:37: with

00:10:38: three hundred of them you made ready-to be sold on a German market language wise.

00:10:45: Was there something like regulatory?

00:10:51: There was mostly translation of the source code and, you know... So you

00:10:55: had coders that basically translated this whole thing in the back end.

00:11:00: Yeah it's mostly the interface.

00:11:02: we changed from English into French Italian Spanish German And then we released them.

00:11:09: We paid a royalty.

00:11:10: You paid a royalty and did your own revenues by selling the software.

00:11:13: Yeah, we kept.

00:11:14: so you know if we sold product for hundred net And then we had to give it forty percent discount We got sixty out of the sixty?

00:11:22: We pay twenty percent twelve to the developer and we would keep The other forty eight right.

00:11:28: that was our margin and we paid all Our marketing.

00:11:30: everything ourselves were a. we called ourselves a republisher.

00:11:34: The publishing was a big name.

00:11:35: Okay, and the software developers were freelancers then?

00:11:40: We didn't have any developers.

00:11:43: The developers where they you know... All the translators

00:11:46: I would say.

00:11:47: Translators yeah mostly freelance.

00:11:49: Mostly freelance.

00:11:50: Yeah i mean the company at the largest.

00:11:52: we're in three countries probably around fifty.

00:11:56: some people there's lot of salespeople had sales teams that are going out to all Retail stores were in the retail market.

00:12:03: so

00:12:03: it was B to be today.

00:12:05: It was VW to see.

00:12:06: yeah, exactly

00:12:07: So you only worked with like media markets at one.

00:12:09: Yeah

00:12:09: We actually have like a big distributor who?

00:12:12: You know would Actually was like an exclusive distributor took all of our things and then we went out and did the sales for them with their distribute with their sales team And they delivered.

00:12:25: so he didn't need big warehouses and things like that.

00:12:28: I'm not sure how open do you want to talk about numbers, but revenues?

00:12:31: Yeah.

00:12:31: We were when we sold with us seven million

00:12:34: Seven

00:12:35: million in revenue here

00:12:36: and like two million a bit the air or was.

00:12:38: no i would think it Was probably Not much more than ten fifteen percent.

00:12:44: okay because You know we didn't own this software so we had sometimes royalties for twenty Sometimes they were thirty.

00:12:49: yeah.

00:12:50: So The real challenge was that we were making, clearing let's say a seven hundred K maybe a million in great year.

00:12:59: But I needed all the money to build company and just realized you know... You also do have to know when your not gonna be a unicorn.

00:13:09: That wasn't big name back then.

00:13:10: but And no when is right time for exit of companies?

00:13:14: i think thats problem here.

00:13:15: now I'm all for going forward.

00:13:20: if you have the traction and, you know... You're going in the right direction.

00:13:24: But i think that there's a lot of entrepreneurs That would do really well to exit.

00:13:32: Interesting.

00:13:32: yeah let's talk about it in us.

00:13:34: Yeah we can tell them.

00:13:35: So you sold it in two thousand three?

00:13:37: Yep to this French public company.

00:13:40: Was that a moment in your life where you could have said I don't have work anymore?

00:13:43: No, no

00:13:44: i wouldn't say it was an no-work movement and plus I was forty two.

00:13:48: so It's hardly something he would be thinking about as soon at my second child.

00:13:52: And uh... So That was definitely not the option..It also wasn't because I had an earn out But it was the case that I didn't have to work at the same kind of things.

00:14:03: And so what did, is stayed on as a two year earn out which i hit and then I stayed for five years as COO in twenty seven.

00:14:15: um...I had opportunity start the entrepreneurship center here.

00:14:21: since running this public company I said, I would do that on the side.

00:14:26: And so I stayed on the board of that company having Quest until for about twelve years.

00:14:32: Oh wow!

00:14:33: Yeah and time?

00:14:33: So yeah it was a long time with them.

00:14:37: How did this company develop further than because translating software was probably not... It

00:14:41: mean there is a public company That was also development company.

00:14:47: From an exit perspective.

00:14:48: from me it's brilliant.

00:14:52: You know, some of my bank account go from four maybe sometimes five digits to seven and I liked seven better but the company itself didn't.

00:15:01: it never really broke through.

00:15:03: We were about Four hundred people when i really stepped out It was you know?

00:15:11: It Was a small mid cap french public company.

00:15:14: no it Didn't.

00:15:14: it didn't Really do what I think the founder had hoped that he was going to be able to deal with it.

00:15:20: Okay,

00:15:20: so at some all went into...

00:15:23: It just wasn't a very tough market you know?

00:15:26: We made a bet we were gonna consolidate retail play and underestimated online power completely go away.

00:15:37: So we went on line strong but You know, it was a hit driven kind of.

00:15:43: It's like the record business where I hit driven business and if you didn't have when he had to hit your on top with the world but you did not have that you weren t.

00:15:51: Mm hmm.

00:15:52: I see okay are talking about ancient history here for me remember they do this

00:15:57: in that kind of age Ancient History.

00:15:59: i'm very interested.

00:16:00: so um So In two thousand seven years started LMU Entrepreneurship Center yeah?

00:16:05: So you did it on the side.

00:16:07: you mentioned

00:16:08: yes

00:16:09: like main thing.

00:16:10: eventually?

00:16:11: That became, so I stayed on in operations there and from basically sold end of three.

00:16:19: And i stayed on an operation still around the end of two thousand eight.

00:16:23: So about two years into The Entrepreneurship Center when I started the entrepreneurship center we didn't have any money to start it.

00:16:32: We had been given

00:16:34: Were you asked?

00:16:36: So the history of that is, I mentioned my first investor was a professor at Wharton.

00:16:43: And part of it had to come back every year and lecture about the challenges being an entrepreneur.

00:16:50: since i have many of them became very good lecturers.

00:16:55: in two thousand three, this one I was selling the company.

00:17:01: Two thousand four...I told him i was lecturing at Wharton.

00:17:04: he invited me to lecture at the LMU.

00:17:06: we started a course together and then they were ready to cancel the course and he said, why?

00:17:12: And I say well we ran out of money.

00:17:13: He can't run outta money.

00:17:15: how does that happen for entrepreneurship at the LMU?

00:17:18: Well there is a guy who gave us half-a million.

00:17:21: his name was Rolf Dienz, one Godfather's venture capital unfortunately lost him about a year ago and there was around a hundred K left.

00:17:31: And Rolf had the idea, said look you know we've got great courses now but no center.

00:17:36: let's find an entrepreneur.

00:17:38: give him one hundred K in ten percent of whatever he raises then will get a center up off-the ground.

00:17:43: that I was kind of likely suspect when they told me i'm running this public company so I would love to do it But have to do pro bono!

00:17:54: It is amazing how fast you can hire something for free.

00:17:58: So I started, we started the company but there was no real money.

00:18:02: There were this hundred K and then it was fifty K of that went into a foundation And i said why don't start to do startup?

00:18:11: That's German entrepreneurship which is now the star two group.

00:18:14: so build up whole company.

00:18:16: next university you know, sponsored the German accelerator for the german government and is in nine countries now.

00:18:27: I ran that for almost seventeen years stepped out of the operations there about two years ago then run by a guy named Matthias Knotz.

00:18:36: uh so well great team yeah

00:18:40: Amazing journey.

00:18:41: probably yes many founders and yeah,

00:18:44: I think it

00:18:44: was kind of what's kind Of an accelerator for wasn't

00:18:47: kind of an accelerator.

00:18:48: It was absolutely an Excel or it is still an accelerator

00:18:52: Which which more more renowned companies came out of it.

00:18:56: are there some?

00:18:56: you might know a company called flix bus?

00:18:59: Oh well You might no trade republic.

00:19:03: You might now auto one About nine unicorns.

00:19:08: okay Well, yeah.

00:19:11: Yeah, Flixbus walked in the three guys walked in and pitched And I looked at them and i said so you're basically your guys are in powerpoint mode right?

00:19:20: They said yeah we're in Powerpoint mode.

00:19:21: Okay well...I think it's a great idea.

00:19:24: why don't come?

00:19:25: they spent six months In the program.

00:19:28: What about largest bus company on the planet?

00:19:31: Were able to invest?

00:19:33: We were gonna talk About investing in a minute.

00:19:35: one of my big mistakes was that I thought I Was too late To Invest And I learned at Venture University.

00:19:42: that's usually not the case.

00:19:45: It is about when you get in and it's about, When You Get Out.

00:19:50: Yeah makes sense right?

00:19:52: Okay so you did that for seventeen years?

00:19:54: Yes!

00:19:55: Not only

00:19:57: on

00:19:57: the way we started The German Accelerator and Social Entrepreneurship Academy.

00:20:04: So

00:20:06: the pro bono work paid off.

00:20:07: The Pro Bono Work did payoff, I mean it was yeah i think we've done a lot for the ecosystem and A lot of...I don't know two thousand startups or something like that.

00:20:17: so Yeah It's crazy but there came an opportunity in Two Thousand.

00:20:26: What Was it?

00:20:27: Fourteen!

00:20:28: I was teaching this course at the LMU In Business Building.

00:20:33: that's, you know nobody was doing corporate business building but I was teaching a course about it and met the head of Deloitte or the Head of Innovation at Deloite.

00:20:42: A guy named Nikolai Anderson came into the office.

00:20:45: i told him what we were doing And asked somebody wanted to bring projects in To my course from deloitte.

00:20:50: he said well What is the cost?

00:20:52: Well its free.

00:20:53: We don't charge for students, because I don't know if they're going to produce anything and then sell my student.

00:20:58: So he said well at that price i'm definitely in.

00:21:01: And so we started working with Deloitte and worked with them for two years around end of twenty fifteen.

00:21:08: I mentioned to Nikolai one evening after class That was gonna start something called digital business building company For corporates.

00:21:17: He said why not you come to Deloite?

00:21:21: So that kicked off in twenty sixteen.

00:21:26: Nikki Kolev and Andy Harding on myself, okay?

00:21:29: Yeah

00:21:29: How was that step?

00:21:31: because you suddenly became

00:21:33: part of a

00:21:34: big corporate.

00:21:35: yeah I mean i've been at Deloitte for seven years six or seven years And I had a great time there as my work for Andreas Warner mostly

00:21:44: if

00:21:44: he knows her it wasn't my mentor and few other ones as well.

00:21:50: so How was that change?

00:21:53: because suddenly it's bigger corporate, right?

00:21:55: And

00:21:57: in some ways.

00:21:57: It sounds bigger than it was but it was massive.

00:22:00: Okay, so the first really big change in my life was two thousand three with the exit.

00:22:06: I went from being my own boss to working for a company with five hundred people and even though iIwas on board of directors... ...i still had a boss!

00:22:13: And i didn't know what that you know.. ..i'd never have had that experience.

00:22:16: So i think being for those years inside of a larger company.... ....and seeing how it works prepared me somewhat but i hadn't You Know It Was A Real Real Shocker When i started at Deloitte.

00:22:30: you know, the roundtables and way people are hired.

00:22:33: And the way people were graded... I mean Deloitte is a brilliant brand company.

00:22:39: we had an incredible ride while i was there right?

00:22:42: Deloite Consulting Germany went from like four hundred million to one point two million in ten years.

00:22:49: so it was incredible growth.

00:22:52: but it was heavily structured being kind of renegade unit inside.

00:22:59: Deloitte was, it had its ups and downs.

00:23:05: It's challenging.

00:23:06: they gave us enough rope to hang ourselves And what we were profitable pretty much from the first get-go.

00:23:13: so I didn't really you know They didn't stop us.

00:23:15: but you know, digital ventures was this literally this renegade thing out on the side and where in The Verkviertel.

00:23:24: And yeah You know people hadn't seen it before.

00:23:27: so but I think that was also what they wanted.

00:23:29: Yeah They wanted somebody who is going to break them old a little bit.

00:23:32: having said all That i Was a partner there?

00:23:34: And i was In the.

00:23:36: you were in the partnership when you had the.

00:23:38: the partnership has its rules and It's It's a breathtaking experience.

00:23:44: I have to say but impressive yeah, and I really wanted to know why Corporates the startups didn't fit together.

00:23:52: Mm-hmm You know II couldn't figure it out.

00:23:54: I kept you know And once I was there and I saw that III really understood okay?

00:23:59: Why?

00:24:00: I think That you know To say in a been a parable or little joke The when corporate and startup shake hands and said let's get going the the startup looks at his watch and says, okay great let's go.

00:24:16: And the corporate turns around.

00:24:17: it looks with a calendar on the wall right?

00:24:19: So its just completely different.

00:24:21: you've got this situation where most times legal department is bigger than start up so its just drowning in processes.

00:24:31: Also, a lot of times startups don't have the depth management inside it.

00:24:36: So its really founders or very senior people who are managing their corporate and they're so slow eating up time from start ups.

00:24:48: I had nice speech called dancing with gorillas where i go into detail about why that happens.

00:24:56: That was one reason when I was at Deloitte led the purchase of Twenty Seven Pilots, The Venture Clienting Company.

00:25:05: I don't know if you know about venture clienting because that was really a model where i said okay this finally makes sense.

00:25:12: You Know If your corporate ,you can do basically three things with startup .You Can Buy Them Which Usually They End Up Being Killed Right?

00:25:20: It Doesn't Usually Go Very Well.. You Can Build Them.

00:25:22: That's What We Did right With Digital Ventures Challenging Business Model... You Don'T Hear Much About BCG digital ventures anymore either so that's a challenge.

00:25:32: or you can be their client.

00:25:34: and the thing is That, you know The problem with CVC corporate venture capital being an investor Is you only see about thirty percent of the deals?

00:25:42: You should say because most startups don't want to strategic on the cap table.

00:25:47: So seventy percent.

00:25:48: You don't even get to see when your the client.

00:25:51: everybody wants you as a client.

00:25:53: Venture Clienting was the first business that I saw which really is an industrialized approach to bringing startups into your corporate.

00:26:02: You change the corporate, you changed the purchasing policies, you've changed the way you do management...you change and you get ready for this startup And then you can-and the importance of that Is at ninety nine or pick.

00:26:15: a number percent Of all breakthrough technologies That we have seen in our lifetime Have come from start ups corpus graded incremental.

00:26:24: But if you don't have an industrialized process or bringing new technology into your company, the chances of you breaking through and changing The whole game is really low right?

00:26:35: So You need this kind of industrialize approach.

00:26:38: And venture client thing was I think sort of the end in my journey.

00:26:42: i bought that company said okay now i've done whatever i can do to help corporates and start a work together.

00:26:47: I

00:26:47: see, so finally the puzzle piece was...

00:26:50: Yeah it's like the last puzzle piece.

00:26:51: yeah okay

00:26:52: how many people were you at Deloitte Digital?

00:26:55: i think at the top we were probably around eight years though.

00:26:59: oh yeah mm-hmm i think it was.

00:27:02: And now its part of monitor.

00:27:03: i think right

00:27:04: no no no No well first of all im out for two years.

00:27:09: uh still over two years.

00:27:11: So those big Corporates change their structures a lot.

00:27:14: So, you know I think it's called TNT technology don't quote me i dont have the names now exactly and The whole innovation garage And everything we were inside that unit called the garage which got now got folded into this Technology units.

00:27:29: so okay yeah

00:27:31: for one puzzle piece from my understanding between Starting the LMU start to What's the name now?

00:27:40: Now, it was called German Entrepreneurship for fifteen years and we changed this to start two groups.

00:27:48: Was that your main job at some point or were you

00:27:51: always in... Yes!

00:27:52: You could say from.

00:27:54: I sold end of three, I started the LMU in And I stepped out of active operations in AvanQuest and was kind of went on the board.

00:28:08: In two thousand nine, so sort of twenty-nine until two thousand fourteen those five years i Was pretty much head down On german entrepreneurship building that up Building Up The German Accelerator Building Up the LMU?

00:28:28: Deloitte came along in twenty fourteen.

00:28:31: It was a twenty fourteen at twenty fourteen and I moved over there.

00:28:34: amazing, but it was the case that i still had an approved mandate from Deloite to run the LMU Entrepreneurship Center And The Social Entrepreneurshop Academy and German Accelerator.

00:28:49: so you know which is sort of the german entrepreneurship network.

00:28:54: So I really was, and it one hand washed the other.

00:29:00: Deloitte is a big sponsor of The German Accelerator even before i started there.

00:29:05: that went for long time.

00:29:08: It's very good cooperation.

00:29:11: Yeah, amazing companies that came out of it.

00:29:12: That's

00:29:13: very nice.

00:29:14: Are

00:29:14: you still in contact with all these founders?

00:29:16: All of them?

00:29:16: yeah I would say if i'm really an expert at anything its partnership.

00:29:23: so im forty some years in business and you can call anyone ive done business with ,i don't think your hear any other than he is a good guy to do business with.

00:29:32: we are still in touch.

00:29:34: thats alot.

00:29:37: I'm going to get to Venture University.

00:29:39: So yeah, in contact with all of them and still support them on the board at The Social Entrepreneurship Academy.

00:29:49: Beautiful.

00:29:50: Yeah.

00:29:51: Were you able do some deals yourself?

00:29:53: In this whole environment-

00:29:54: What did become

00:29:55: an investor itself?

00:29:57: Yeah

00:29:57: what we didn't talk about was that when I went into Deloitte also part of the approved mandate is allowed start up investing.

00:30:05: And in twenty sixteen, Nikki and I started a small angel vehicle.

00:30:14: Together with a few families we started doing angel investing.

00:30:17: so we ended up doing around fifty-five angel investments between twenty sixteen and twenty...I think we were fully invested by twenty twenty or something like that?

00:30:30: Small VC fund.

00:30:31: Yeah, I was not

00:30:32: regulated but

00:30:34: yeah It wasn't set up like a fun But it was holding company just doing in doing investments and so for all intents of purposes if I Wouldn't say it was the VC fund?

00:30:46: I would say is an angel font okay?

00:30:50: And there's a big big difference and that's what i've learned In The past couple Years What That Difference Is.

00:30:56: So I mean, maybe we should just talk for a minute about Venture University.

00:31:01: Right?

00:31:01: Because the reason?

00:31:02: there's a couple reasons that i decided to step out of what i was doing.

00:31:06: you know it was um

00:31:08: Out Of Deloitte.

00:31:09: You Mean

00:31:09: Well Deloite Was Ending.

00:31:10: You Have To Retire At Sixty Three.

00:31:12: So We Saw That Coming In The Year Before The Retirement.

00:31:16: My Son Uh Asked Me What I Was Gonna Do When I Retired And I Said well Probably Investing in Education ever interested in having a partner.

00:31:29: And I said, you want to be my partner?

00:31:31: He say yeah i really do so...I said look if I can build a business together with you for the next couple decades uh..i won't do these private equity things that I'm looking at and let's get

00:31:40: started.".

00:31:41: So

00:31:42: what was he doing before?

00:31:43: Remy is a graduate of CDTM this honors program between LMU and TU and he had started a um legal tech startup which he decided not.

00:31:56: He started a social startup, which does quite well called Entrepreneurial that connects.

00:32:02: I think they have over two thousand members and he was running the accelerator for me at the SARTU group And became my investment manager For the A-Round Capital Group where we did all of other investments.

00:32:20: We were already working together somewhat but certainly not full time.

00:32:25: And I realized that if I really wanted to do this, I had to kind of clean my plate and... ...I'd been at the LMU.

00:32:33: We handed over in twenty-one so it was like the end of fifteen almost sixteen years.

00:32:38: then start two group we changed name decided with Matthias to pass that over him than team and stepped out around just around time two and a half, three years ago.

00:32:54: And Remy then discovered Venture University.

00:33:01: He said maybe you want to look at this?

00:33:03: Well it's an investor

00:33:04: accelerator.".

00:33:06: I have done corporate accelerators start-up accelerators government accelerators...I don't even wanna hear the word again!

00:33:14: No no you had a look and I said, wow.

00:33:18: So they're running a VC fund that I joined the VC Fund.

00:33:21: then I work inside the VC fund?

00:33:24: That's really what he said.

00:33:25: Yeah, I said let me do this.

00:33:27: so we both did four quarters at Venture University And that changed everything made me realize as much as i have good gut senses and things like that I wasn't asking right questions about.

00:33:45: to the startups, I would say that if i had done VU before I'd done all those investments.

00:33:54: Quite a few of them might have passed on.

00:33:56: but what it really also showed me was managing your portfolio is very active process, right?

00:34:11: And what became very clear to me was that a lot of the angel investing we had done were never VC cases.

00:34:20: Yeah and so you know if I say What did i learn?

00:34:24: The result it was dramatic.

00:34:26: So in twenty-twenty two twenty three twenty four I have no exits from that portfolio.

00:34:31: Twenty twenty five I did Venture University.

00:34:33: It's six exits Two already this year.

00:34:37: The thing, one of the sort of keys that we look at.

00:34:42: That I think we weren't concentrating on from an angel perspective were number One.

00:34:48: how what is the magnitude?

00:34:50: Of improvement over the status quo?

00:34:54: So How different is it?

00:34:56: one x two X ten X or as a thousand X Right if it's a thousand x It's really a VC case.

00:35:03: If its ten X Maybe it's a VC case.

00:35:06: It depends on the next question, which is what is the real market for right?

00:35:10: So if it is like I don't think i had that clarity On the necessity of investing in something That In itself was absolutely transformative Right.

00:35:25: and then The Next Step Is If Its Transformative Is The Market Genuinely Big Enough?

00:35:30: And The Third Thing That Is Really Crucial Is What'S The Marketing Hack?

00:35:36: So the market may be there, but how are you going to get it?

00:35:40: It's

00:35:40: much more structured now.

00:35:42: Much more structured like

00:35:44: a checklist.

00:35:45: almost

00:35:45: Well what happens when you... The way venture university works is we're full blown VC fund so its California LLC.

00:35:57: We have about eighty million dollars of Capital that we manage about sixty million in a evergreen syndicate and twenty million inside of the fund.

00:36:08: And we do tickets between two hundred K and a million.

00:36:11: The name of the Fund is VU Adventure University, but v you venture partners?

00:36:17: And the name is very important because the model on That's what attracted me when Remy brought it was We accept applications during the quarter rolling admission and we accept forty to sixty investors or people who want to hone their investing skills per quarter, right?

00:36:34: And then when you join there is a... You do pay to be part of it but you can join for a quarter or upto a year.

00:36:42: And you are full partner in the fund.

00:36:44: I see Right.

00:36:45: So what that means Is There's A Week Of Masterclass Talked By The Two General Partners With Twenty And Thirty Year Track Records.

00:36:55: What kind of questions do you ask?

00:36:57: And then, you're representing the fund and you go out.

00:36:59: You start doing deals.

00:37:01: we give you a hundred deals to look at-you actually do the due diligence with your team... Mm-hmm.

00:37:05: ...and eventually take the deal.

00:37:06: so the investment committee if it passes an investment committee The Fund invests!

00:37:12: You can invest from an Investment Club perspective starting in five K but don't have to invest.

00:37:18: So when you finish quarter or done three to four deals Start To Finish.

00:37:23: It's not like any other kind of course I've ever done, because it's not a course.

00:37:31: You want to learn how to play tennis and so what most people do is they say well here read all these books about tennis.

00:37:36: no go get on the court take the racket hit the ball.

00:37:40: that would be you as its The Racket On The Court And A Rackets As A Checkbook.

00:37:45: So your really writing two hundred K to one million euro tickets completely changed my thinking and I invest differently, do diligence differently.

00:37:56: So that's...

00:37:58: So Remy brought you your new adventure?

00:38:00: He did!

00:38:00: Yeah, Remy bought me the new adventure.

00:38:03: it is quite amazing working together.

00:38:07: so he sees also just Adjust a partner there like you are.

00:38:12: We're both.

00:38:12: so the way it works is, There's a fund.

00:38:15: we have a GP stake in The Fund but were not general partners on purpose Not General Partners In The Fund But we Are Running The Whole Education Aspect Of It.

00:38:25: Here Its Online Live.

00:38:27: So About Half More Like Sixty To Seventy Percent of The Cohort Is American.

00:38:33: The Other Thirty to forty percent as European.

00:38:36: When we started it was zero-European, a hundred American.

00:38:39: but everybody meets online right?

00:38:42: But there's a lot of... We do all the interviews and interview each candidate one at time see if they're qualified.

00:38:50: you know manage help people really coach them through processes.

00:38:55: so that is what were doing most our times.

00:38:58: I could basically say am interested in this.

00:39:01: i would be very happy Okay,

00:39:03: and then we can get in.

00:39:04: And you practice investing?

00:39:06: Yeah exactly!

00:39:09: You come out with a real track record right.

00:39:12: so there's a younger group that tends to be like twenty five to thirty-five who wants to go into VC.

00:39:20: when a VC opens an ad they get five hundred thousand applications for one position.

00:39:26: Nobody who's applying has track record.

00:39:28: you come out of VU.

00:39:29: You've got the track record.

00:39:30: That's why we've been successfully now placing people into vcs.

00:39:35: We also have people come out and start their own syndicate or start there on fund with a couple.

00:39:39: People started funds, and then there's an older group who are more seasoned.

00:39:44: let's say forty five to Seventy-five Who our family offices exited entrepreneurs?

00:39:54: those people get a massive amount out of it because statistically, and this is why VC is somewhat broken.

00:40:01: And I think that Venture University as part of fixing It Is That You Would Never Go To A Doctor Hadn't Gone to Medical School But you Can't Learn Venture Capital At Least Until a Venture university?

00:40:15: The result is that less than twenty five percent Of venture capitalists in there's about ten thousand In the World Ever return one X and of angel investments, there's probably three hundred thousand very serious angels.

00:40:30: You know that's three hundred fifty billion invested by VCs about fifty billion bytes or four hundred billion invested every year.

00:40:38: the Angels sixty percent go to zero.

00:40:41: less than ten percent are worth talking About.

00:40:43: so no matter how you look at it as an industry where we're misallocating two hundred billion a year, it's a trillion every five years.

00:40:51: And

00:40:51: you can put the system behind that and

00:40:53: view your VU is really... It's an apprenticeship.

00:40:58: It's genuine apprenticeship where somebody looking over your shoulder You've got to go through investment committee.

00:41:04: Don't just have to bang on table.

00:41:06: be totally committed with team.

00:41:08: We have done due diligence.

00:41:10: Have understand what clients wanted.

00:41:12: What are other investors doing?

00:41:14: Really come out of deal maker

00:41:17: And the network is probably pretty impressive that you.

00:41:20: there are now over a thousand alumni about eighty from Europe.

00:41:25: So we're happy about that.

00:41:26: eight hundred and ninety-eight of them in our database, which has sorted what have access to?

00:41:32: The others only did the master class on people who do one week Masterclass.

00:41:36: but you have access To that alumni group.

00:41:38: You can write them all emails.

00:41:41: All the emails were screened before they go out But you can send People deals.

00:41:45: What's also I think quite Remarkable about it is that ten percent of the tuition gets invested across all The deals.

00:41:52: nice so you that means?

00:41:54: You get a vote at the investment committee whether the cohort capital should go in.

00:41:58: So, really feel the sense am I doing this investment or not?

00:42:02: and once you graduate Your incentivize to bring deals for the rest of your career.

00:42:06: And we share carry with you as well on that.

00:42:09: So yeah It's a great network very international really active And I think that right now the ecosystem for investors is kind of where it was fifteen or eighteen years ago when i started the LMUEC, all the effort goes to startups.

00:42:26: All the focus and accelerators everything starts up start-up start-ups.

00:42:31: You know what?

00:42:32: Let's balance this ecosystem here because Let me say it more factually, of my companies that I invested in.

00:42:44: We've never gotten to the B round where we could get the money from Germany.

00:42:49: Always had to go international and got the money you know?

00:42:53: And that's kind of a shame right?

00:42:54: why is that?

00:42:56: Why America basically same size investing ten X what Europe is Y?

00:43:06: I think, it would be just

00:43:08: the next question because how you look on like startup and venture capital market in Europe versus to US where probably have both views.

00:43:18: Here is often everything's too bureaucratic.

00:43:21: there are no risk-capital available.

00:43:24: things that really true or other reasons?

00:43:28: The level of bureaucracy here breathtaking compared to the States, it is true.

00:43:33: I mean, Venture University runs US LLCs.

00:43:39: so and you know You can Bring up an LLC in a hour.

00:43:44: we did it right like

00:43:46: yeah?

00:43:46: Yeah It's literally an hour here its notar And all thing.

00:43:50: there was A new company i just saw yesterday called rockates start that apparently Is helping you To set Up a gmbh In a day which is great but I don't know that it's so much that.

00:44:06: One of the things that really got a clear sense was, and there are brilliant VCs in Europe who have done great deals but we're talking about top ten percent... People think too much than silos like oh-we do A rounds or B rounds right?

00:44:25: That was, we're too late to go in because we won't have enough percentage of the company.

00:44:30: I could've invested and a lot of those unicorns but I said oh i'm too late for invest.

00:44:36: you know that's just not true.

00:44:39: It's not about when you invest, it is what the value and likely outcome are.

00:44:47: We just invested in a robotics company called Figure AI.

00:44:57: How do we even get into the deal?

00:44:58: It was six hundred and seventy five million dollar raise.

00:45:01: We met,we were able to put in three million dollars.

00:45:05: Jeff Bezos putting a hundred Amazon another hundred Microsoft.

00:45:10: one of our graduates called To Get Some Help on The Deal.

00:45:13: he Was Running The Deal for Amazon And He Said Sure We Can help but Would Like to Have An Allocation.

00:45:18: so you know Through The Alumni We Get Into These Great Deals.

00:45:21: But it Was Already A two Billion When we invested.

00:45:24: what?

00:45:25: We just put another two million in Two weeks ago at thirty billion.

00:45:31: Okay, why?

00:45:31: because the humanoid robot market Which is basically you know and

00:45:37: it's the markets.

00:45:39: Yeah if could replace like right that the labor force Right now has the possibility of being worth three hundred Billion or maybe being worth a trillion right.

00:45:48: so yeah this new.

00:45:50: And so it's not about the, am I an A round or B rounded investor and how much of a percentage do i have?

00:45:56: It's about value investing.

00:45:57: Right?

00:45:57: And I think that...I Think that a lot of people tend to come in.

00:46:02: You know The Americans have the ability To come in early and stay till the IPO.

00:46:07: They just keep going whereas you don't see That breath here right?

00:46:11: So I think helping People really understand how to invest, what are the right kinds of deals?

00:46:19: Giving them access to global deal flow is really important and I haven't seen anything like VU.

00:46:29: I will look into.

00:46:30: it.

00:46:32: sounds really amazing.

00:46:34: Anything you learned about founder types probably a lot characteristics of very successful founders that you see over and over again.

00:46:47: And lights having drive, being passionate about what they do in stuff.

00:46:51: but is there something more graspable?

00:46:54: I think it's not about experience.

00:46:59: We don't necessarily look for people who... The Flixbus guys didn't know anything about the bus industry.

00:47:06: They were a bunch BCG consultants and studied a little bit Right, so it's what I think is that people were looking for first of all.

00:47:18: I want to be genuinely blown away by with the founders right?

00:47:21: I truly Wanted To Be Blown Away That's and i learned that quote from Andrews Alice in one Of The General Partners.

00:47:28: It's

00:47:28: more a gut feeling than

00:47:29: yeah, that's the gut-feeling thats.

00:47:30: like these guys I am blown away By What They're Doing And How they're Gonna do it.

00:47:35: but its also that issue of Is it is it visionary, right?

00:47:40: Do they really have that... do they have a take on the market that's able to produce one hundred X or thousand X. And Andrew tells this story of he was first check into Venmo.

00:47:54: I don't know if lot people know Venmo but its huge payment platform sold for billions and He was the first two-hundred fifty K cheque.

00:48:02: probably when we went in there were a hundred payment companies out their.

00:48:05: so why did you invest?

00:48:08: is because the marketing hack was, they were the first company that said hey if you want to transfer money all you need as a mobile phone.

00:48:17: Do have one of those?

00:48:19: And that new take on being able to transform money that way changed entire market.

00:48:27: right?

00:48:27: I mean look at Uber.

00:48:28: he's also an early uber investor.

00:48:30: yeah Nobody had ever, the idea of getting in a car or taxi which came exactly to where you were and You got out.

00:48:37: And you didn't pay it?

00:48:38: Then you could find out Where It was now at second nature right but when they Were doing that nobody Was Doing Right.

00:48:45: so its That I think what we're What i've learned about founders.

00:48:48: They have To Have That Visionary Understanding Of What They're Trying to do and then that Idea About and im gonna Do it without.

00:49:01: if I can't go in the door, I'll go into chimney and when you're going to come through the window otherwise build a tunnel.

00:49:07: We are gonna get this

00:49:07: done.".

00:49:10: That's really what we were looking for but without that transformation thinking... And i think some people just see.. I realize now lot of angel investing is about really nice incremental where there nothing wrong with it.

00:49:29: happy-to do you know, three X and four X all day long if you believe it.

00:49:33: Right?

00:49:33: But If you're going to invest large sums like VC, you know VC.

00:49:39: what I love about this market is that's really the only asset class which consistently invests in the future of humanity seriously changing the world right yeah And um Yeah.

00:49:52: so i think what i learned Is look much more carefully About whether or not the founder Has that kind of vision and capability.

00:50:04: at the same time on the founder team obviously

00:50:08: What I mean if you can talk about it.

00:50:10: But do you have like or what were your most successful investments?

00:50:14: looking back?

00:50:15: Um, i don't want to name names but i did um.

00:50:19: I Did start a company which we sold to a good very nice u.s Company took it public and that did really well in the healthcare market.

00:50:31: That was probably my biggest, I did well on my company when I sold it right?

00:50:38: And that's what I was saying before about you don't... When I sold mine-I often say the venture capital is best thing never happened to me Right?

00:50:50: I own my company.

00:50:51: Me, I own sixty percent and my partners own the other forty percent when we sold it.

00:50:55: you don't have to sell for a hundred million if you own sixty per cent of that company right?

00:51:00: so... You can change your life.

00:51:07: So i think That's really important.

00:51:13: The exit velocity is something We've spent alot of time talking about at Venture University.

00:51:20: people don't spend enough time thinking about that.

00:51:24: And how to get it and when to get out, what's the right timing?

00:51:30: But I mean...I can't complain i've done okay That

00:51:33: cool.

00:51:35: What is a plan for next few years For you and Remy?

00:51:38: So we're very dedicated To building BU.

00:51:41: You know..i have noticed things.

00:51:44: take...you always overestimate two years and underestimate what you'll do in ten.

00:51:52: So we signed a partnership agreement for eight years, Remy and I. Oh?

00:51:58: Uh...I suggested three.

00:52:00: he said no it wasn't enough.

00:52:01: i said okay.

00:52:02: so uh..we signed the partnership agreement And I think that Venture University is center pin of us like We would very much like.

00:52:11: we're at about thousand plus graduates now a real chunk of the potential VC market that is trained to actually do investing.

00:52:27: I wouldn't say, more going on there for us to do together.

00:52:37: And there's a whole creative side as well, my wife's second novel just arrived today.

00:52:44: it's called Berlin.

00:52:45: her name is Irina Goldstein.

00:52:46: can I do a little pitch for?

00:52:48: She writes in German and we have family publishing business there.

00:52:54: We're illustrating some childrens books.

00:52:58: i Have A New Granddaughter thanks To Remy's Wife & Remy And so I would say venture university, education building the investor ecosystem doing more investing helping companies.

00:53:14: That's the future.

00:53:15: So there is no retirement plan?

00:53:17: Ah!

00:53:18: Retirement!

00:53:18: Retirement...I did retire..I retired on May thirtieth, I think it was a nice weekend.

00:53:26: It took the weekend off and i started again on monday.

00:53:30: yeah no i don't know that i'm not sure.

00:53:32: i have the dna for retirement.

00:53:35: yeah probably i would say this obviously right now its'a great thing and i love what im doing then you are

00:53:45: retired basically?

00:53:46: Then you're already tired if your loved what you were doing

00:53:48: exactly!

00:53:48: If you love what ure doing ,you won''t work today in ur life.

00:53:52: My idol is my grandfather, who I think he was in the office with my dad.

00:54:00: Yeah we had a family thread business-I was The Black Sheep that left and didn't go into the family business.

00:54:05: but i think He Was In The Office Till He Was Ninety Five And He Went Out And Played Eighteen Holes Of Golf When He Was ninety eight and Came Home Had A Bottle of Wine With His Baby Sister And Didn'T Get Up In The Morning.

00:54:17: And I Said Okay That's You Know.

00:54:19: I Think you Need To Stay Stay active and keep your mind going.

00:54:24: Make a difference about making the difference, right?

00:54:26: Yeah Just caring about people on really doing something you believe in where your heart is at it.

00:54:31: My dad had a great saying which was if you do the right thing all The time when he was talking about here Right sooner or later You'll be doing the right things.

00:54:41: so we're just waiting to see what's for venture university.

00:54:46: Pretty amazing I think.

00:54:50: further make a difference.

00:54:52: Thanks so much for sharing this in this podcast, honestly and I hope it will definitely inspire the audience who is listening here.

00:55:00: Yeah congratulations to you!

00:55:01: i see the company that you've built and doing great job getting there.

00:55:06: You're getting there too yeah.

00:55:07: Thank you for being my pleasure.

00:55:09: thank you

00:55:10: So.

00:55:10: I hoped that first English podcast episode sixty was as inspiring.

00:55:16: Definitely look into Venture University.

00:55:21: Thanks for that Andy and yeah, if you're excited about this as me I hope You also join in further episodes on finance data people.

00:55:30: Thank you very much for watching and listening.