"Take what you can get"

Heyvie founder Marius Krämer had actually planned a large financing round for September. He explains in an interview why this is unlikely to happen.

These are dark times for start-ups at the moment. There are signs that VC investors are becoming much more cautious. Hard figures are likely to become more important than the growth potential of young companies. Heyvie founder Marius Krämer is now trying to prepare for the downturn and advises founders of small start-ups to get many investors on board now - even if the conditions are not the very best.

Mr. Krämer, you have actually planned a large seed financing round for September in order to finance Heyvie's growth. Are you still optimistic about the fall?

It is now very unlikely that we will be able to achieve the conditions we had in mind. The market is currently experiencing a consolidation phase, it is normalizing again and we founders have to live with that. We are currently assuming that we will raise significantly less money than originally planned if we don't want to dilute the market too much. If nothing comes of the financing round in September, it will be tight. Then it will be Christmas, when nothing happens anyway, and we would have to wait until March. And then you don't know what to expect.

How are you preparing for the planned financing round in September?

From what I've heard, investors will be paying more attention to key financial figures again. They want to see how sustainable the business model is. They want to see that start-ups are already generating revenue, they want to secure themselves. We assume that we will have to adjust the planned volume of the financing round and the valuation of our company downwards by 50 percent.

What feedback do you get when you talk to investors at the moment?

Over the past four weeks, everyone has become much more cautious. Investors still find our start-up interesting, but they clearly want to see that our business model can work. That's why we will soon be taking money for our app, which uses neurocentric training to prevent or reduce headaches and migraines. I have often heard from angel investors that they are holding back money to help the start-ups they have already invested in.

We assume that we will have to adjust the planned volume of the financing round and the valuation of our company downwards by 50 percent.

Marius Krämer, Heyvie founder

How important is the planned financing round in September for Heyvie?

It would be our entire growth financing. With the money from the current round behind us, we can show that our app works and on an ever larger scale. The money is enough to further develop our app.

What happens if you can't raise any money?

If the round doesn't come, that really sucks. At some point you run out of money. That's why we're also trying to reduce costs. That and the payment function should help us to extend our runway until next March.

How will this work in practice?

We now have to change quickly. We are no longer trying to better adapt our product to the needs of our customers, but to understand the topic of payment. How much money can we take, does a subscription model work? We are now relying on a hybrid model. There is a personal onboarding and then you can buy our 3-month programs and keep the content forever. We also do calls every two weeks. But to be honest, we don't know whether this is the right method. We also have to make decisions based on gut feeling.

And how do you reduce your costs?

It's mainly about paid tools that we would otherwise use for reasons of convenience. For example, to build a landing page. We don't do that and instead use SaaS products that we already have. We also don't have fancy drinks in the office as a team. As we are starting very early with all these measures, we will make a lot of savings over the next few months. We are cutting back in all areas where it makes sense and is justifiable - we want to keep our team in any case!

Aren't you exaggerating a little?

Sure, maybe it's all overdramatized and perhaps too pessimistic. But if things really do go to shit, then it's better to be as well prepared as possible. If you don't make the right decisions now, you'll have a problem if you only have enough money for two months later on. Then the cost savings will no longer be worth it.

What advice would you give to other founders?

The more investors you have on board, the better. So take what money you can get now. Even if the conditions aren't perfect. If you have a lot of investors behind you, you can hope that they will come together in a bad phase. If you are only financed by two investors, you will have a problem as soon as one drops out.

Does that mean you will definitely go through with the financing round in September?

You have to attempt the round, one way or another. It's not the way to say: it won't work anyway. The worst thing that can happen to you is if you're mentally paralyzed. Then at some point it will be too late. What many founders probably don't say clearly at the moment is that the current situation is also doing something to your mental health. People often don't talk about it. But it doesn't help, you have to deal with it now, even if this phase is very stressful.

Personal details: Marius Krämer, 31, studied International Management and then worked at scale-up Bynder and has since been involved in various projects, including a crypto fintech from Bielefeld. In his free time, he spends every minute bouldering or on camper trips with his dog and girlfriend.