Multi Corporate & Multi Entrepreneur — Private Equity Funds
I joined the DuMont Schauberg media group in 2007 to set up a fund for participation in digital media with DuMont Venture. At that time, it was primarily media companies that dominated the venture capital scene in this country. In the years before, many companies struggled with the digitization of the industry. Startups had adapted more quickly to the new market conditions and customer needs, taking significant market share from the established players. After the attempt at incubation, i.e. the establishment of new business units from within the company, had not paid off for many, more and more corporate venture capital units established themselves on the market. This was mostly based on the same motivation: participation in the rapid growth of the industry, leverage of own reach and resources and of course risk management.
Two experiences from my time at DuMont Venture had a significant influence on the decision to launch Capnamic Ventures as a new fund: the realization that startups and corporates can benefit from each other and the observation that more and more industries are affected by the increasing interconnectedness of our society. Meanwhile, digitization is not only affecting the business models of publishers and media houses. The music and entertainment industry, the retail sector, the financial world and the healthcare sector are experiencing similar structural changes. Capnamic Ventures’ approach is therefore to bring many parties to the table. Our fund investors are medium-sized and large companies that can provide not only money but also network, know-how, reach and other resources. In this way, we create a network with unique added value for our portfolio and can systematically increase the chances of success.
With this approach, we have fallen on the ears of many investors. Nevertheless, it was a rocky road to the fund’s first closing. One reason for this is certainly our special investor base. On the one hand, we are not looking for the experienced financial investor, and on the other hand, the majority of our LPs invest their own money and are accordingly critical when selecting investments. Therefore, we are very proud of our partners from the first closing. After that, it was then easier to attract other partners to the fund and we are currently in talks to further expand our network.
We invest in young growth companies along the digital value chain. We are excited by startups that use digital media to shorten classic value chains or break down industry boundaries. The range of topics is diverse and growing continuously due to increasing digitization.
As an early-stage investor, we focus on typical A rounds. Sweet spot are companies that can already prove traction and are looking for EUR 0.5 — 2.5M. As a fund, Capnamic Ventures is completely independent and makes its investment decisions autonomously. Nevertheless, there are always thematic overlaps between portfolio companies and fund investors. We then try to use these interfaces and play out our added value. In the first active year, we made three investments: adeven, glamloop and travador. All companies already have direct cooperations with our investors.
Since the fund is independent and we are measured by our return, the exit channel is completely open. We never seek a majority stake and accordingly always hold minority interests. In this respect, preferential conditions for our fund investors vis-à-vis the co-shareholders would also not be enforceable at portfolio level. Nevertheless, our fund investors build up a relationship of trust with the portfolio companies over the term of the investment and can thus minimize their risk if they do act as buyers of an investment. However, the price and conditions are then determined on the market.