Munich Startup: Please introduce Falkensteiner Ventures.
Beat Blaser, Falkensteiner Ventures: We are a boutique venture capital accelerator, which is a term we came up with for ourselves. We focus exclusively on travel, hospitality, recreation – in other words the leisure industry – and elderly care. Why is our focus on travel and hospitality? My partner has a hotel chain, the Falkensteiner Hotels, and I’ve personally worked in the travel sector throughout Europe for my entire career. That’s also why we decided to be a smart money investor who doesn’t just provide money, but is also hands-on where it makes sense to give support.
Munich Startup: Do you have a preferred investment area?
Beat Blaser, Falkensteiner Ventures: We’re particularly interested in anything that has to do with travel. Another focus cluster is vacation rental, meaning homes and vacation accommodations. We bank on tech-based, modern rental concepts because we think this can make a real contribution, especially in tourist regions, when new international guests come as a result. We think there is still an unbelievable amount of potential in the area of vacation rentals, much more than in cities where the segment is highly regulated.
Another area of focus for us is anything having to do with Software-as-a-Service for hospitality. Our hoteliers’ insider knowledge plays a major role in this case. Especially in small-scale hotel business, so many issues could be automated and efficiency gains increased. We now have five investments in this area and are actively looking for more.
“We look for topics at the interface between the old and new economy”
The fourth segment we focus on goes in the direction of camping and outdoor hospitality. In general, we look for topics that are at the interface between the old and new economy. Especially in the camping realm, we feel that hospitality offers are often far from digital. I’m obviously not talking about well-organized chains, but rather individual hotels. And what you find in many cases is that the camping, glamping and outdoor segment is still five, six or seven years behind. That’s where we see positive potential and we’re just about to complete three additional investments in the area.
Munich Startup: Do you focus on startups in specific stages?
Beat Blaser, Falkensteiner Ventures: We like anything that’s early, on the PowerPoint level, in the pre-seed or seed stage. We have a relatively high level of expertise in these areas, know the market very well and can give young individuals the greatest amount of added value in early stages through our networks, experience and mentoring. I even have to laugh at times when someone needs something, for example in Finland or the Czech Republic, and we’re actually able to help them. In the beginning, we weren’t fully aware of the fact that we have such an excellent network and are able to help people basically across the whole of Europe. That’s also why we almost exclusively work on things in the early-stage realm.
Munich Startup: What kind of startup would you never invest in?
Beat Blaser, Falkensteiner Ventures: We would obviously like it to be as digital as possible, but it could also be at the interface to brick & mortar (physical office or retail space, note from editor). The truism “team, team, team” has also always been important to us, because a good team works even with a mediocre idea, but a mediocre idea won’t work with a weak team. Moreover, we would also like to more strongly promote the topic of female founders in the future.
“We Clear Obstacles and Open Doors”
Munich Startup: Do startups need to worry about you getting too involved?
Beat Blaser, Falkensteiner Ventures: Our mission statement is: We clear obstacles and open doors for founders. We don’t want to make things even more difficult for them, for heaven’s sake. That obviously also correlates with the team and their business idea. Some teams need more support than others. Especially in the early stage, we also actively support our startup investments on an operational level. But of course the best case scenario is when the founders push back and say “We’ve got it covered,” which means they know what they’re doing and only come to us when they really need help. If we’re heavily involved operationally, then usually something isn’t right in the team.
Munich Startup: After initial contact, how long does it take to establish a contract?
Beat Blaser, Falkensteiner Ventures: It takes an average of six months, but if things go quickly, then three. And with a bit of ping pong and back and forth, then it can take nine. But it usually takes six months for cash to land in an account.
Munich Startup: To be successful, a startup needs to…
Beat Blaser, Falkensteiner Ventures: …be a strong, resilient team with a strong idea that is of value to a customer in all key aspects, that solves problems.
Munich Startup: How do you meet startups?
Beat Blaser, Falkensteiner Ventures: We don’t have batches or deadlines, we like people to approach us when the timing is right for them. We’ve been on the market for two years and find our startups through all channels. That means network recommendations, LinkedIn and of course pitching events. But what we enjoy most is when people or contacts get in touch with us, and we try to give qualified feedback within two to three weeks.
Team performance is decisive for Falkensteiner Ventures
Munich Startup: Is there a no-go factor in a pitch?
Beat Blaser, Falkensteiner Ventures: I don’t think there’s a no-go factor. If there is one, it would certainly be a lack of team performance, or also chemistry, when we feel like it’s not a good match. Or when we think the team won’t be able to rise to the challenge. Sometimes it can also be the constellation with other investors, where we think we would click well with the founding team, but not with their current or lead investor.
Munich Startup: When have you seriously miscalculated a situation?
Beat Blaser, Falkensteiner Ventures: I have to tell you – and this includes the COVID phase – that up to this point with our traffic light system, all startups are green and one is yellow. And when it comes to that startup, we think that together with all of the stakeholders, we’ll be able to get it back to green. So we’ve been lucky so far and have perhaps made the right choices, nobody has crashed yet.
“Travel has become more deliberate”
Munich Startup: The trend of the year is…!
Beat Blaser, Falkensteiner Ventures: There are different trends. First, you have the effects of COVID: We’ve noticed that people are travelling a lot locally, that bookings are made on much shorter notice, and certainly that travel has become much more deliberate, which means the reason behind it is questioned instead of just flying to New York and back for the weekend. What we’ve also noticed is that large, established companies in travel, be it travel agencies or airlines, are obviously in the middle of a tremendous struggle. Of course that has to do with COVID, but is also partly due to outdated business models, and partly due to dead weight and costs that they simply haven’t been able to reduce.
But what we also see, regardless of whether in our portfolio or in others’, is that young companies are simply more agile and obviously also have a lower cost base. This allows them to concentrate more on the product and customers and less on internal problems and everything that goes along with that. They also simply have greater opportunities in the current situation. Now is the time for startups in travel!
What Germany can learn from Austria
Munich Startup: From an investor standpoint, what does the Munich startup scene do well? What could be improved?
Beat Blaser, Falkensteiner Ventures: When I look at the topics we have in travel, then Munich is simply an extremely good location. Switzerland and Austria are nearby and the South is not far away. But perhaps the advantages of the ecosystems could be communicated even better and with more emphasis. Because sometimes I feel like the most important things, for example when Obama shows up at Bits & Pretzels, almost happen on the side.
And another subject I often mull over is the support provided at a city, state and federal level. I think for Germany as a whole, not just for Munich, there’s potential for better communication in this area. Austria is unbelievably good in this respect, with clear communication and support for startups, and it’s all done at a rapid pace. We’ve been in a situation three times now where we had to decide between Germany and Austria for where to locate a company. Each time, the founding teams and our team chose Austria together. When it comes to the efficiency and speed of support, it might help to learn a little something from the Austrians.
Munich Startup: Last but not least: Whom should startups contact if they would like to meet up with you?
Beat Blaser, Falkensteiner Ventures: Any one of us. Whether you contact me, Erich Falkensteiner, our office and project manager Ingrid Silginer or use our web form, social media or other channels – any option works. Startups shouldn’t be shy or apprehensive about meeting us, just go for it and contact us.