Why I joined Vitruvian Partners as Special Partner

Happy New Year to all of you

and thank you for reaching out and congratulating to the new assignment. I am really happy about having joined Vitruvian Partners. Let me iterate why by starting adding a very personal dimension to the decision. As most of you know, i’ve been busy for the last 20 yrs building and scaling companies. During this time, was lucky to be part of some very successful companies, including 3 notable Exits 

• iobox in 2000, acquired by Telefonica for 230mEUR
• WLAN AG in 2003, acquired by Swisscom roughly the same price as yahoo paid for flickr at that time
• Criteo with a 2013 IPO on NASDAQ - CRTO for 2+bn

Plus, there are some companies that are still ‘in the race’, such as www.fon.com and www.socialbakers.com as well as a couple of angel investments / board assignments.

During the past decade, my wife and I also started building a family with 2 wonderful kids. As you can imagine, having executive / CEO positions in startup / scalp businesses take quite a bit of time, and so my wonderful wife agreed to scale back her workload and be there for the kids. After I quit Socialbakers in 2017 we decided to try and switch roles and I would have her back, be pivot for the kids and my wife would go back to work full time. This was quite a fundamental change - challenging both of us, but now, after almost 18 months in, i would say, we have done pretty well. To be honest, I took over from her after she did most of the groundbreaking work and the kids now at school and in Kindergarden are getting more and more independent - so I took on quite a bit of advisory work in the last year or so. And while i really enjoyed working with all the different teams, it was not so easy to find an assignment that was both part time and had a long-term perspective. Lucky me, I got a couple of senior advisory assignments that made that possible. 

Then, Vitruvian came along and was looking for a ’Special Partner’ in DACH and beyond which means someone helping to source and develop investment opportunities. Since I have been working in and with the Venture and Growth Investor scene for the past 2 decades this assignment sounded and now feels very natural. Vitruvian, very importantly, has been successfully working with part-time allocated Special Partners in the past so we all can benefit from that experience already made.

While Vitriuvan has an excellent reputation in the industry, some people have a rather vague image of who we are: Vitruvian is a later stage growth equity fund. The current fund has 2,4bn EUR and we would like to invest in equity shareholdings between 30-250m EUR per company. With the European Venture Capital Landscape developing very well for Seed, Series A and B, an over proportional amount of later stage and much larger funding rounds is done by US investors - since there are only a few European Players. Vitruvian nicely adds financial resources to this growing segment of high-growth EU companies. At the same time, we are starting to fund US companies who want to develop in Europe. 

Entrepreneur friendly: most investors would say that, since in the end, it’s the entrepreneurs who build the companies and in the current world of low interest rates, there is a lot of capital available for great companies and great teams. 

In order to to be able to invest in the greatest companies, and in particular if you want to sign cheques that amount to 30-250m EUR, the money has to come with a little “extra”. At Vitruvian, this means essentially a lot of flexibility to tailor the investment around situations that the entrepreneur and the company are in rather than around dogma. This is also how I got to know to Vitruvian during my time at Socialbakers.

One principle is that Vitruvian is really flexible when it comes to funding.

• Vitruvian is really strong in doing ‘classic’ buyouts = we would acquire the large majority of shares off the existing shareholders and become the majority owner of the company.
• In quite a few cases, Vitruvian is becoming a minority shareholder- e.g. leading a late-stage funding round (see above). Also here, we have a lot of flexibility. 
• Often, the biggest value can be created through primary investment in late stage companies = all the money we invest is used to grow the company, we essentially add additional fuel to the rocket.
• Often, a later stage company has situations around the table of shareholders in which a secondary transaction (= the money goes to existing shareholders to buy shares off them) creates a lot of value for the management team: even high growth companies are usually a couple of years old before we invest and often, you have shareholders who would rather sell their shares than stick to the company. Buying out these shareholders creates a lot of positive momentum for the management, since their ’updated’ capable is fully aligned focused on future growth.
• in the end, we often go for a mix of both of primary and secondary funding.

Financials aside, Vitruvian really works alongside the entrepreneur and works out a joint strategy how to best position/develop the company beyond its current business. Since M&A is the core of what we do, we often can immediately help our portfolio companies in a given sector and might already have identified jointly, how we would like to realise growth through acquisitions. We also have a so-called ‘Value Added Team’ of very senior Professionals who can support the portfolio companies and help them with specific topics, such as Sales, Finance, Marketing, Product etc. 

For US companies in particular, Vitruvian is an interesting alternative, especially if they want to develop Europe as a Market - with our European DNA and the ability to support the business and hiring, it’s a very attractive booster to building (out) European footprint faster.  

Summary: if you know of digital companies with 20+% growth, ideally profitable and looking to get a new shareholder to bring the business to a next level / IPO, we are happy to engage. Just reach out.