German start-ups face-to-face with VCs

Venture capital. Seed funding. Business plans. These aren't phrases we hear as often as we did 18 months ago. Yet the urge to start up successful IT and internet companies hasn't gone away. Unfortunately, silicon.de recently found that some fledgling entrepreneurs still have a lot to learn...

IT contact exchange Dasar recently invited venture capitalists (VCs) and start-ups to meet in Munich at this year's Start-Tech event. Even if the VCs hogged the spotlight, the start-ups clearly garnered more interest. Many attended (a ratio of around four wannabes for every prospective Godfather), but many proved badly prepared.

The game devised by the organisers was 'Meet the Money'. It worked like this: for each round, five VCs and one established international great from the start-up scene listened to two-minute presentations given by various budding IT bosses. Each VC then posed one or two questions before deciding whether they would invest in the start-up that had just been picked to pieces, or not.

Few of the hopeful fledgling founders won any support. The faces of some of the young entrepreneurs were suitably red when they crept back to their seats following some well-meaning advice from the presenter, Dasar CEO Alex Vieux.

Embarrassment gradually spread through all the rows of the room. Experts heard comments - said in all straight-faced in all seriousness - such as: "We write software and want to become market leaders within the next two years" or "The question of strategy is one which we have not really addressed yet" or "I don't think we have any competitors as no one is doing what we are doing".

These answers understandably caused alarm.

The most common VC response was: "Could you explain more clearly what it is that you do?"

However, some applicants for third-round funding, with products already on the market for one or two years, had people interested in them. They took proceedings seriously.

Let's just hope some of the newer German founders on show take to heart the well-intentioned articles, television reports, books and analyses detailing the lessons learned from the collapse of the dot-com bubble. After all, there are always other jobs.

http://www.silicon.de