"Sustainable start-ups are more crisis-proof"

Tina Dreimann invests in impact start-ups as a business angel. In this interview, she talks about the current investment climate and urges investors and founders to remain courageous.

There was a time when Tina Dreimann looked after turtles in Costa Rica during her studies. Then she joined the management consultancy Bain & Company. Only then did she enter the start-up world. Today, the 40-year-old investor focuses on impact start-ups. In hindsight, all of her previous positions have prepared her for this role as a business angel, she says.

Ms Dreimann, there are now almost daily reports of start-ups whose valuations are collapsing and of young companies having to lay off employees. Some start-up representatives are talking about a crisis, while others see nothing more than a normalization of the market. How do you see it?

Tina Dreimann: I believe that we are still a long way from a crisis. At best, we can talk it up and create it ourselves if we hesitate now. However, there are some criteria that are now becoming more important again when it comes to investments. And I am convinced that the money is still there. We will have to continue to stretch ourselves to find the good start-ups.

Which ones would that be?

Founders should question whether they have a relevant business model that is also viable in macroeconomic crises and - and I can't emphasize this enough - they should have a good team.

In your opinion, what makes a good team?

The team must have passion. There's the saying "passion beats experience" and I think there's a lot to that. You need a founder who can inspire people. The person must be able to convince investors, employees and customers. And the team must of course be able to develop a successful business model.

But these are all criteria that VCs have been calling on for years. Imagine the opposite: Who wants to invest in a bad team and non-viable business models?

That may be true, but the question is whether they have really adhered to these criteria in the past. There have also recently been more inexperienced investors who have driven up the valuations of start-ups. They are now becoming more cautious in view of the current mood. With regard to our Angels Club, I can say that we have not had to change our investment criteria this year. There are a good 60 investment criteria in our due diligence. The only thing we are doing now: We are looking even more closely at survivability in macroeconomic crises.

Are none of your members currently unsettled?

We have just conducted a survey on this. Even when Russia started the war in Ukraine, most of our members said they did not see any impact on their investments. Three groups have crystallized. 16 percent said they wanted to be more cautious after all. 71 percent will not change anything and 13 percent even have a now-first-right mentality.

Do you belong to group three yourself?

Yes, precisely because of my role as an impact investor, I believe that we are running out of time on some issues. We simply must not delay now. We have a lot of problems: the climate crisis, the decline in biodiversity, health issues and education for a better future. Incidentally, that's also what I mean by relevant business models: Start-ups are ideally suited to solving the problems of our time. They are more agile than large companies or public authorities. And it is precisely these problems that founders should address.

Are sustainable start-ups more crisis-proof?

Yes, if there is a viable business model behind them, not a philanthropic one. As investors, we want to combine profitability with impact. For me, viability also means that founders have their figures under control. They need to know where their money is coming from and what they are spending it on. Then they can also make the right adjustments in times of crisis, for example to extend their burn rate, i.e. the time until they run out of money. This may sound banal, but an alarming number of founders have difficulties with this.

Thank you for the interview.

Personal details: Tina Dreimann worked at the management consultancy Bain & Company for five years before moving into the start-up world. She first went to Friendscout24. She later joined Kartenmacherei as a business and agile coach. In 2019, she co-founded the business angel network Better Ventures.