"Take what you can get"

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

These are dark times that startups are currently facing. VC investors, it seems at the moment, are becoming much more cautious. Hard key figures are likely to become more decisive than the growth potential of young companies. Heyvie founder Marius Krämer is now trying to prepare for the lull and advises founders of small startups to get plenty of investors on board now - even if the conditions aren't the very best.

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

On the terms we had envisioned, it has now become very unlikely. The market is currently experiencing a consolidation phase, it is returning to normal, and we founders have to live with that. We currently assume that we will raise significantly less money than originally planned if we don't want to dilute too much. If nothing comes of the financing round in September, things will be tight. Then it will be Christmas, when nothing will take place 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'm hearing, investors are paying more attention to financial figures again. They want to see how sustainable the business model is. They want to see that start-ups are already generating revenues, they want to hedge their bets. We assume that we will have to adjust the planned volume of the financing round and the valuation of ours downward by 50 percent.

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

Everyone has become much more cautious since a good four weeks ago. Investors still find our start-up interesting, but they clearly want to see that our business model can work. That's why we'll soon be taking money for our app, which uses neurocentric training to prevent or reduce headaches and also migraines. I've heard more often now from angel investors that they are withholding money to help the startups they are already invested in.

We assume that we will have to adjust the planned volume of the financing round and the valuation of ours downward 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 money from the current round behind us, we are showing that our app works, and on an ever larger scale. The money is enough to continue developing our app.

What happens if you can't raise money?

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

How is that going to work out specifically?

We have to make a quick change now. We are now not trying to better adapt our product to the needs of our customers, but to understand the payment issue. How much money can we take, does a subscription model work? We now rely on a hybrid model. There is a personal onboarding and then you can buy our 3-month programs, then keep the content forever. In addition, we then make calls every two weeks. But honestly, we don't know if this is the right method. We have to make decisions based on gut feeling.

And how do you reduce your costs?

This is mainly a question of tools that we would otherwise use for reasons of convenience. For example, to build a landing page. We don't do that, but rather use SaaS products that we already have. We also do without fancy drinks in the office as a team. Since we're starting very early with all these measures, we'll be saving quite a bit 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 that's all overdramatized and maybe too black and white. But if things really go to shit, then it's better to be as well prepared for it as possible. If you don't make the right decisions now, you'll have a problem later when you only have enough money for two months. Then the cost savings won't be worth it either.

What advice do you have for other founders?

The more investors you have on board, the better. That's why you should take whatever money you can get now. Even if it's not the perfect terms. If you have a lot of investors behind you, you can hope that they will get together in a bad phase. If you're funding through only two investors, you'll have a problem as soon as one drops out.

That means you're going through with the financing round in September no matter what?

You have to try for that round, one way or the other. It's not the way to say: it's not going to happen now 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: The current situation also does something for 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 at the moment.

Personal details: Marius Krämer, 31, studied international management and then worked at scale-up Bynder. Since then, he has been involved in various projects, including a crypto fintech based in Bielefeld. In his free time, he uses every minute to go bouldering or on camping trips with his dog and girlfriend.