Christoph Behn wants to promote sustainable start-ups with better ventures. How founders get his money - and what this has to do with a personality test.
Christoph Behn wears his hair cropped short, and you can see the 41-year-old's broad cross under his grey sweater. He and his team managed to set up the card-making company without outside capital. The company recently made 50 million euros in sales and employs 250 people. Now he wants to invest in start-ups himself with better ventures. In an interview, he explains how founders get their hands on Behn's money, why he takes a personality test before investing and what problems VC funds have today.
Mr. Behn, with better ventures you want to invest in start-ups. Is there a need for more funders in the start-up scene?
Absolutely. We still have too little capital, especially in the early stages of founding a company, and too few experienced founders who can help not only with money, but also with their experience and their network. This is exactly where we want to come in with better ventures and do some things differently. Not everything we see is founder-friendly.
How do you mean that the funds are not founder-friendly?
You have to differentiate between angels, like we are with better ventures, and institutional investors - like VC funds. We invest our own capital and therefore have only one "target group": The founders we believe in and support. Funds, on the other hand, serve their investors, for whom they are supposed to multiply the capital umpteen times. And as a VC, you certainly sometimes make decisions that satisfy investors rather than founders.
With better ventures you now want to invest money. How much is that?
We are an angel club and invest low and medium six-figure sums at a time. In doing so, we primarily support founders who want to make the world a more sustainable place and thus improve it. We are convinced that these investments not only make the world a better place, but also have a huge market and people want to consume very consciously. In total, we are investing a high single-digit million sum in the first step. I see us as a business angel early on, happy to be the first investor before the funding round, helping with the pitch deck and then bringing in other investors.
You now want to invest your money primarily in sustainable start-ups. Isn't that a risk that might come at the expense of returns?
It's always a risk to pull out. But many other venture capitalists have understood that sustainability is important and are also taking the first steps. Holtzbrink Ventures, for example, has joined Everdrop, as have we. More and more players are realizing that consumers want sustainable products, so there are markets for these startups, and are also making targeted investments there. I'm optimistic that there will be more of them.
Experts have been arguing about a definition of sustainability for years. So how do you choose your investments?
We look for world-improving ideas. Of course, this includes those that ensure lower Co2 emissions and less plastic, but the topic is even more complex. For me, business models that benefit society are also sustainable, for example new products that enable parents to take better care of their children. There is a lot of potential here, and we want to exploit it. The "what" is just as important as the "how.
How do you mean?
It's important what kind of product a company makes, of course, but it's just as important how it's made. If I save a lot of plastic and completely ignore gender equality, is it sustainable? We try to take both dimensions into account when making investment decisions.
You invested in Everdrop. Why did you do that?
The product and the team were right. The start-up produces a tab that you throw into a water bottle, which turns the water into a cleaning agent, thus saving a lot of plastic and preventing water from having to be transported across the globe, as would otherwise be the case in cleaning bottles. The idea is great and we could believe the team that they are serious, that it is not just a marketing story for consumers and investors. We personally think that's really important.
How did you test this?
We talk to people, invite them, talk a lot. And we actually do personality tests to see who we're dealing with. So we have more factors that help us make an investment decision.
Before you make an investment, how do you make sure it's really sustainable?
That's a totally big challenge operationally and not trivial at all. You have to take into account an extremely large number of factors, from production to supply chain to sales. At the end of the day, the question is: Has this really had a positive effect? We'll only see in a few years.
If the start-up still exists in this form.
Exactly. One problem that could arise is that new investors bring in a lot of money and perhaps don't focus on sustainability. We want to avoid that and actively encourage founders to talk to us so that we can also bring on board partners with more money and similar goals. I don't see the problem with Everdrop either, because they don't want to put their community before their head. We saw how that can end with Oatly. There was only one US investor in it and he had something to do with Trump and the company got a shitstorm. The younger generation pays attention to that kind of thing.
How do you keep track of whether your investment was really sustainable then?
I don't think one hundred percent is. The team at Everdrop counts bottles they've saved, sure: but is that without fault? Probably not. But I believe there is no black or white, only something in between, and accordingly an investment decision is not always completely sustainable or not at all. We invest primarily in people and their values. And if the right people with the right values get money, then it can't be all that wrong.
Thank you very much for the interview.
Christoph Behn (41) is the founder and CEO of better ventures. Before that, he was active as founder and CEO of Kartenmacherei for almost ten years. Without outside capital, he and his team succeeded in keeping the company consistently profitable and shaping it into a company with nearly 50 million euros in annual sales and over 250 employees. Before becoming active as an entrepreneur, Behn worked for several years as a consultant at Bain & Company.
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