Why would a serial entrepreneur from California join a bunch of Europeans to invest in tech companies from places like Bulgaria and Slovenia?
Erik Bovee, one of the US-based partners of Speedinvest, explains why he cofounded an investment fund in Austria and how he, together with Oliver Holle and his team, has built a bridge between the burgeoning European technology scene and Silicon Valley.
6am Skype calls are in Erik´s general routine. Being based in Silicon Valley, managing different time zones is a way of life, especially as most of the ventures he is involved in through Speedinvest are European. He started life as an academic, with plans to teach at university, but in his last year of a PhD at Oxford he met an engineering professor who had other ideas. A few months later they had raised $7 million, which seemed like a very modest amount in early 2000, and Erik has been helping to build technology companies ever since. His career developed quickly as he found passion in helping talented engineers and product people navigate the early years, finding product market fit, finding their first, cornerstone customers, and raising their first funding.
Erik’s expertise is what he describes as ‘knowing a little bit about a lot of things’. His academic background gives him the skills to navigate large, often complex subjects and to do a great deal of high quality research quickly. His preferences as an investor and collaborator are straight forward: European startups with deep technical products that are able to move to Silicon Valley and compete on an international scale. Europe has high quality undergraduate technical education, and produces more engineers per capita than the US, but European entrepreneurs often benefit from hands-on assistance and an investor who can play the role of co-founder. Erik describes Silicon Valley as a great consumer of European talent and a perfect place to select and fund the genius ideas in deep tech that he comes across and strongly believes in. And working with technical founders is a role that is familiar and enjoyable.
With the exodus of European “techies”, and many Startups adopted by Silicon Valley, Erik is in a privileged position, meeting and mingling with entrepreneurs that arrive looking for funding and customers. His advice when he is approached is: “know your investor” and by that he highlights how important it is for startups to do their research and find partners who fit a number of criteria that are not always apparent to the public: is the fund in an investing cycle, have they invested in a competitor, are any partners experts in your subject area? In many cases, in order to secure top-tier funding in the US, founders need to form a US entity, and build a solid track record in the Valley. In many cases it makes more sense to look for your first funding closer to home. Ideally it should be a fund that offers a bridge for startups and can assist in the transition from EU to US markets.
Selecting startups to invest in is largely about understanding people. Being an entrepreneur is all about being comfortable with uncertainty. First and foremost, when talking to founders, Erik looks for the imagination and skills required to make something out of nothing, in addition to the confidence and honesty to look reality in the face. Sometimes the best laid plans don’t work, and a good founder needs to be able face the daunting possibility of starting from scratch with humor and newfound energy.
Success stories occur every day in the startup world and Erik has a personal favorite since becoming a venture capitalist. He describes how he worked with an Austrian/Italian founder over a year on a product called Wikidocs, a framework that turns HTML applications into real-time collaboration tools, much like Google docs. The founder was smart, technical and very good at selling, a key combination for entrepreneurs. This self-taught expert in HTML had solved a number of deep technical problems relating to real-time collaboration on the Web. Speedinvest invested in the idea and the founder when product-market-fit (and even what the final product would look like) were still unclear. Both of them worked side-by-side, gathering market feedback and product requirements, and iterating the business until it was obvious that Wikidocs could be built into a foundational service that would change the way online collaboration works. The technology was strong, the founder was strong and now they had a plan to change the Web. The vision for Wikidocs was so compelling that in a month of launching, business development meetings became acquisition offers. The market timing and product vision had been just right, and Wikidocs was a key piece of foundational technology for a number of large players in enterprise collaboration. Wikidocs was acquired 6 months later by Atlassian.
Apart from this particular success story, you can tell he is passionate about each and every other startup he has taken under his wing: indoo.rs (positioning and navigation software indoors especially for the visually impaired), sip:wise (the next generation Voice-over-IP and telecommunications system), Usersnap (a visual bug tracker for web projects)…and these are just to name a few! He has been there “hands-on” for all of them.
When Erik speaks about how he has become the venture capitalist he is today, he makes it seem like there wasn’t much choice: “It was just a natural career progression from working with talented founders and building strong relationships with really excellent people!” he said. When he started he had no intention of going into Venture Capital, he was just ”really lucky” to have met some good founders along the way, and built great businesses”. His future plans and aims, are clear: continue to grow Speedinvest worldwide and have fun doing it:
‘It’s a familiar environment, and the work is really enjoyable. I love working with technical founders. These were my friends growing up, the same people who as kids were getting dragged out of bed early Saturday morning to go to math competitions, or staying up late on a Friday playing D&D or writing games for the Apple IIe when everyone else was going out on dates. It’s exactly what I want to be doing.’