"Anyone can do a glossy pitch deck, it's not an art anymore".

The accounting start-up sevDesk has raised 50 million euros from investors. Here, CEO Fabian Silberer talks for the first time about how to land a US investor, why he no longer has to pitch, and gives tips on how founders can get investors excited.

SevDesk founder Fabian Silberer is actually more of a "techie" at heart, as he says, wrote many lines of program code for the start-up's software. Then his skills were no longer enough and he turned his full attention to running the company and developing the strategy. For the Startbase interview, he has a baseball cap on and the typical bookshelf in the back that can't be missing from an interview in Corona times.

Mr. Silberer, you were able to win prominent investors for your start-up sevDesk, including Celonis investor Arena Holding. How did you get this?

We have now reached a size and speed in sales growth that international investors are approaching us. Actually, I get inquiries every week from investors who would like to work with us or invest in us. It is very important for us to keep in touch with them and to maintain this contact for months. A relationship really has to develop before it's time for the next round of financing.

How do you keep in touch?

It's like a relationship. You get to know each other, you write to each other and then you reveal something about yourself and demand something from the other side in return. I wouldn't give out our company metrics first. Instead, I write to investors that we have a challenge and ask if they have ideas to solve it. If they come back with good answers, we as a company give something away again, and so on. You can tell very quickly from the answers whether a relationship can develop or not.

If you create the Fear Of Missing Out (FOMO), then investors are also keen on it.

Fabian Silberer, sevDesk boss

Do you then also approach investors offensively when it comes to financing rounds?

No, not for a long time. In fact, the opposite is usually wise, i.e. to first keep investors at a distance and say: 'No, an investment is not possible at the moment, but there will be a financing round in three months, so be ready then'. At that time it is also important to show that others are interested in the deal and it is really hot. If you create the Fear Of Missing Out (FOMO), then investors are also keen.

What do you look for in investors?

Money and the "terms" are not that important to us. We want an investor who shares our values and vision. If that's not the case, you suddenly have someone on board who wants to steer you in the completely wrong direction. We don't want that, of course. We care so much about culture that our "Cultural Ambassadors" also did reverse due diligence on the investors. This was completely new for the investors and impressed them. Really good investors also come very prepared, sometimes they have read every Kununu review individually. Of course, that's much more convincing than someone who threw our five most important key figures into a tool.

How did you then manage the process for the financing round?

We actually have a multi-step process. At the beginning, we ask key questions to see: Does the investor even fit with us as a company and do they share the same values? For example, one of the questions would be: How would you maintain the culture of sevDesk if the company grows to several hundred employees? How do you see the business model going international? What is your product vision? That filters out a lot of people who don't fit in with us. Only when there are only a few left do we talk about terms, veto rights and everything that goes with it.

US investors pay much more attention to people and the team.

Fabian Silberer, sevDesk CEO

What tip do you have for founders organizing this process?

We have taken this completely into our own hands. We set a precise date for when we would start, then filtered out quickly and effectively and also gave the investors clear deadlines for their feedback. If none came, it was clear where we stood. To that end, we planned everything very carefully: When does the pitch deck have to be ready? When do we start the speech? When do we release financials? Which lawyer would accompany us? Never go into a meeting unprepared, that's also very important.

Are there any investors who are this badly off?

I've noticed it a lot with two of them. One of them once told us about another start-up that was very successful in the sales area with classic hire and fire. He was out for us immediately. Another one wanted us to expand to the US immediately and didn't see that the German market is big enough and not saturated at all. That was the end of the conversation, so to speak.

How do negotiations with US investors differ from those with German or European VCs?

US investors look much more closely at the people and the team. In the early years, many European and German VCs struggled over every sentence in the term sheet and tried to make a bit more margin. That's changing right now and you shouldn't lump them all together. But it's very different with US investors. They say 'I don't give a fuck', the term sheet is not a deciding factor in the war for them.

What many founders have to work on is the topic of storytelling.

Fabian Silberer, sevDesk

You also pitched yourself for a long time and didn't get any requests from investors. What was the success rate like back then?

That was in 2016 and 2017, back then we must have pitched 50 times and only once did anything come of it, which was overall quite frustrating. The most important thing I learned back then and also see as a business angel today: anyone can make a glossy pitch deck, it's no longer an art. Investors look much more at the team and whether they want to build this company sustainably in the long term and are committed.

What advice would you give to young founders about what they should pay more attention to when pitching?

What many founders need to work on is storytelling. We did that wrong back then, too. We said very stupidly and soberly: problem, solution, market, business model. That didn't excite anyone and is actually already minimum standard. But our parents, for example, were both self-employed and had accounting problems. So we have a real childhood trauma, which we now always talk about. It's the personal that convinces, not the pitch deck that always looks the same. And a really sound strategy is important.

To what extent is strategy really elementary for funding rounds?

It is much more important than you think. We made the mistake of underestimating it for a long time. A nice vision is not enough. That's why we sat down last year and went through the strategy down to the smallest detail, which also helped with the financing round. Because investors hear a lot of visions and they always sound great, but if they're not well-founded, they pick them apart point by point.

Thank you very much for the interview.

About Fabian Silberer: Fabian Silberer is the founder and CEO of sevDesk, a cloud-based accounting software for the self-employed and small businesses. The 30-year-old founded the software start-up in 2013 together with his fellow student Marco Reinbold. Today, sevDesk employs over 165 people in Offenburg.