Big ideas in front of high mountains: This year the Business Angel Day – organized by AplusB and the Austrian Wirtschaftsservice – took place in Obergurgl, Tyrol. One of the highlights was the nomination of Hermann Hauser as Business Angel of the year 2016. Hauser invested just a couple of weeks ago in the crowd investing platform CONDA. Alone this year, he could add nine new Austrian startups to his portfolio. (on the picture from left: Bernd Litzka (aws), “Business Angel of the Year 2016” Hermann Hauser, Marcus Hofer (AplusB) and LR Patrizia Zoller-Frischauf).

Pushing the startup agenda

Tyrol seems to be a good place for the venture industry: Over 100 participants took part at the Business Angel Day, among them many new faces and international top investors. Perfectly organized with a great activity package (get together dinner, gondola ride, and ski race), the event offered many opportunities for networking. This year, the main topic was about co-investments. Experts such as the Business Angels Markus Ertler and Peter Koch, or lawyer Rainer Kaspar (PHH Rechtsanwälte), shared their knowledge. Daniel Beck, investment manager at the European Investment Fund (EIF) emphasized the importance of European angel networks. Such networks offer angels – among many things – access to high-quality deal flow and professional execution of transactions. Our CEO Berthold Baurek-Karlic got a lot of positive feedback for the idea of a pan-European Angel Club, a project we are working on with KPMG Austria. In addition, he had good talks with Magdalena Hauser-Venier from I.E.C.T. about investments in artificial intelligence and quantum computing. A great sign for the fast progressing Austrian startup ecosystem was the participation of the Austrian Broadcasting Company ORF with its new startup engagement vehicle futurelab.261.

Hub to new markets

Thanks to the support of the Tyrolean government and especially Mrs. Patrizia Zoller-Frischauf, Tyrol is evolving to a regional startup anchor. The Business Angel Day is already the second high-class event this year in Tyrol. In July, the Business Angel Summit attracted over 100 business angels and investors to visit Kitzbühel. Harald Gohm and Marcus Hofer from CAST and Standortagentur Tirol together with AWS i2 Business Angel Börse and sponsors such as PHH Rechtsanwälte or Venionaire, these events are acting as networking hub to new markets, primarily to Germany, Switzerland, and Italy. Opportunities such as the Business Angel Day are very important for the Austrian startup ecosystem emphasizes Rainer Kaspar, a partner at PHH Rechtsanwälte: “We really appreciate the effort undertaken by AWS and Standortagentur Tirol to bring together the Austrian investors community and also involve investors from neighboring countries. This was again a fabulous event which leads the way in building a solid base for potential co-investments in the DACH-region.”

Need an effective solution for customer research? Want to look and feel good? Miss Harry Potter? Slovakia’s Startup Scene has a few aces up its sleave. Our Laura Lennkh had the pleasure to visit Slovakia twice within the last few weeks, both times coming back highly impressed by the talents that the country attracts.

On the 26th of September at the European Commission‘s Innovation Radar Prize held in Bratislava this year, I had the joy to hear pitches from EU funded projects and assess their market readiness as a jury member. As part of the European Commission’s ICT Proposers Day, the event attracted participants from all over Europe. Two things that struck me about this event: the first, that this is really what the EU is best at – selecting and supporting the brightest minds in Europe to foster our development and innovation. The second: we were an all female jury. Ever heard about that at a startup event? Me neither. It isn’t so much about the fact that we were all women, but rather that discussion and finding the winners for each of the prize categories (Excellent Science, Horizon 2020, ICT innovator, Industrial & Enabling Tech and ICT for Society) happened so smoothly. In case you are asking – I highly recommend doing this again!

Slovakia’s Startup Awards

Second time I hopped on a train to Slovakia was a few weeks later in the beginning of November. Slovakia’s Startup Awards (#SASK2016), organized by Neulogy, is Slovakia’s largest Pitch Event with an estimated number of 1000 participants on December 2nd, 2016. In preparation for this event, 23 startups were pre-selected to have the opportunity to partake in a Mentorship Bootcamp over an entire weekend, 4-6th of November. As part of the mentors, I sweated it with them: tweak your pitch here, make sure you get the message out there – not to mention that the entire event (and pitches!) were held in superb English.

The first biodegradable plastic sunglasses from Crafting Plastics.

Meet three of the 12 finalist startups: At Groupsolver Survey Monkey meets McKinsey style consulting in this Saas solution for customer research. Traction? With quarter over quarter revenue growth of 50% and offices in Slovakia and the USA it answers for itself. Ever heard of Crafting Plastics? Meet your first biodegradable plastic sunglasses. Sounds boring? Milano Fashion Show didn’t think so –  look good and feel good about it too.

Do you miss Harry Potter? Maguss will let you perform your own set of magic tricks through its AR game. Before even launching – they managed to reach over 170% of needed funds on Indiegogo in less than 10 days. I look forward to seeing the finals on December 2nd. If you are curious too, you can get discounted tickets here. (promotion code: SASK_Special_Venionaire_k67)

Danube Valley

What I saw this weekend is that it’s all there: bright minds, startups with strong traction and a small but highly engaged emerging ecosystem. Pretty much representatives from all of Slovakia’s investment scene – VCs, Accelerators, Angels and some large corporates – took time off to spend the weekend supporting the most promising startups. No further question about dedication. As our long gone empire still spooks about in our Austrian DNA, I personally thought about the following: Slovakia’s capital Bratislava is only 45 minutes away from Vienna (having lived in Mexico City where a commute through the city to get to a meeting can easily take you up to 2 hours – this seems like a breeze). Prague: 4 hours away. Budapest: 2 hours away. With so many talents about in the region – shouldn‘t we start thinking of a Danube Valley?

Among others, Premek Piska from AgentBalance pitched at the Startup Awards.SK Bootcamp.

Inspired by the EU Innovation Radar Prize reminding us that we are all one strong Europe, convinced that our region has a solid economic, cultural and historical connection and a regional competitive advantage, I raise my hand to join forces between our small but strong and ever growing startup ecosystems. No Austrian imperialism – I promise.

What are promising Austrian startups in the field of software development and IT-systems? The Austrian branch of CA Technologies, one of the largest independent software corporations in the world, wanted to find out and launched the CA Technologies Startup Challenge in partnership with the City of Vienna and the initiative DigitalCity.Wien. Proud winner of the challenge is Patrick Kirchmayr (picture above in the middle) from FRUX. His startup develops a B2B sales intelligence platform. Second place went to INDOO.RS (on the picture left: Co-Founder Bernd Gruber), an indoor navigation and positioning app. Jakob Etzel (on the right) won with PredictR, a banking software for personal financial forecasting, the third place.

All three startups get prices with a total value of 100.000 Euros including tickets to the IT conference “CA world” in Las Vegas and PR services. Additionally, Frux can use one year CA Technologies software for free, including support and training.

from left: Ulrike Huemer (City of Vienna), Mario Reismüller (CA Technologies) and Martin Giesswein (DigitalCity.Wien)

Presentation with finalists

Preceding the awards ceremony, five finalists had to pitch their idea on October 20th at the Vienna University of Technology. Besides Frux, Indoors and Predictr, the startups CareerMoves (job portal for people with disabilities) and Wave (mobility assistant app) got nominated. The best startups were selected through a jury as well as an audience vote, which was conducted with the app from DealMatrix.

Dealmatrix CEO Christoph Drescher explains how to use his app for voting. © David Bohmann

“We were surprised by the high number of applications and impressed by the variety and creativity of the ideas – it was not easy to make a preselection”, says Mario Reismüller, CEO of CA Technologies in Austria.

In total, 24 startups applied for the challenge. Venionaire had the responsibility to screen and analyze every startup and consult CA Technologies on the possible synergies and growth potentials of the candidates. From our point of view, startup challenges such as this one, innovation2Company or Security Rockstars are a good sign, that the awareness within corporates for collaborating and engaging with startups is growing. This is great news for the whole startup ecosystem as it enables new growth opportunities for startups while corporates profit from a new stream of innovation and business ideas.

Our Partner Alexander Rapatz (on the left) was part of the Jury at the CA Technologies Startup Challenge. © David Bohmann

If you are interested in launching your own startup challenge or want to cooperate closer with startups, just give us a hint. We are more than happy to help!

The Startup Ecosystem is evolving in Slovakia. One example is the program of STARTUP AWARDS, which is a competition for Slovak early-stage tech companies with global potential. Our business development expert Laura Lennkh will participate as mentor, advising startups on how to present their pitch at the STARTUP AWARDS final event in December. In addition, it is a good opportunity for us to see first hand the hot ideas and innovations from our neighboring country.

Largest startup and innovation event

For the first time, STARTUP AWARDS will host more than 1,000 entrepreneurs, innovators, investors and corporates. Additionally, the event will be extended to a full day conference with panels and workshops, presenting top international investors and successful entrepreneurs. In addition to the pitches of most promising Slovak startups, attendees will also have a chance to see the icon of Israeli startup scene, Uri Levine. Uri is the founder of Waze, the largest community-based traffic and navigation app in the world. After having sold Waze to Google for over one billion dollars in 2013, Levine has been fully devoted to developing new tech companies as an angel investor. The confirmed speakers list includes Esther Dyson, named as one of the most influential women in American business by Forbes magazine, Andrej Pan?ík, a young Slovak, who sold his startup Represent for 100 million EUR, or biotech entrepreneur Danny Cabrera who produces 3D bio-printers that manufacture human tissue.

Visit the website for more infos!

Those Star Wars aficinados among you may well remember the episode: Darth Vader captures Han Solo and Princess Leia on Cloud City (please note how appropriate the name is in today´s era) to bait Luke Skywalker to come to the rescue which, unsurprisingly, he does. As Luke is a young and unexperienced Jedi, he loses the duel but he manages to escape – finally defeating Vader in the last episode. As morals of stories go, it was the principles, challenge and learning process which made Luke a stronger Jedi. Luckily, CVC can be the Force in our version of Star Wars, providing benefits to both the Empires (corporations) and the Skywalkers (start-ups), allowing them to grow with each other.

So what is CVC? In short, when a corporate fund directly invests in an external start-up, classically by taking an equity stake in the company (through a company-internal or external fund). However, the galaxy of involvement can be very broad: from corporation funded incubators and accelerators, or to start-ups which can even be incubated in the parent company (thus making it an R&D hybrid), to strategic alliances and collaborations, all of which is referred to as “corporate venturing”.

Changing times they are

Corporate Venture activities started before the 1970’s as a niche investment strategy with few players who had a strong technological background: however, this never became a market standard, spilling over to other industry sectors. But now, in Yoda’s words, “the time is commander”. The digital revolution or transformation is challenging every field of business, changing the way we collaborate at work, the way we organize and manage company structures and value chains. Demands and habits of employees and clients have been changing as well. The difference to the changes which occurred 20 years ago is the speed behind these developments – innovation was never so fast and companies have never before been forced to be as agile as they need to be today. Start-ups have been at the forefront of this technological evolution, disrupting the established ways how large companies are operating. For instance, it is no surprise that Hewlett Packard recently split its technology business from the PC and printer business, as the latter is expected to fade out eventually. Margins are under pressure, new products are needed and technologies are driving changes in many fields, too many to solve all of them internally, and if so, by assuming considerable opportunity costs. The consequence: large corporates are finally stepping again into the arena of Venture Capital, which means that there is a lot of capital paired with strategic interests on the rise. According to a report by 500 Startups (see Hubspot,  p. 25 and 30), more than half of the 500 largest public companies are engaged in some way of corporate venturing, with three European countries in the lead: France with 23 out of 25 companies, Germany with 15 out of 21 and Switzerland with 10 out of 14. According to Global Corporate Venturing, over 1790 CVC deals were executed in 2015 totalling a worth of 75,4 billion USD, five times the amount executed in in 2012 (see www.globalcorporateventuring.com). The Force is already visibly at work!

Corporations – benefit they will

“To be or not to be” – as a company, if someone does more effectively what I do, I seize to be relevant. Alas I can research and try to outrun the others, and or, be involved in the ecosystem of my market by investing in the right start-ups, partake and sponsor the right incubators and accelerators to find the technologies which can enhance my product/ supply chain/ route to market / market infrastructure. That very much depends on the corporate’s investment priorities.

It’s in the numbers: it is well understood that the “next new thing” can happen anywhere within and outside of the corporations as such. Maintaining a long-term investment in the internal R&D not only is costly and might also be risky – they simply might not find that precious next new thing. In comparison, CVC operates under a mid-term perspective, with lower costs and average risks, allowing corporations to essentially externalized their R&D. They can cherry pick whom to invest in and it diversifies the winning options and risks as it can very much be kept independent from the core business without limiting potential high returns. Also, it most certainly may help to keep oversight if your M&A team decides to strike.

Jedi practice: chances are, when you practice something with someone else, you’ll put in more effort. Start-ups are lean – if they have to fail, they better do it fast – being tight on capital means becoming very creative in how to reach targets. Having a younger fitter Jedi partner keeps us in shape simply because we need to adjust to their (faster) speed. Engaging with start-ups, investing in talents and innovations, leads to faster reactions and helps to succeed in direct competition within a sector.

“Unlearn you must, do or not do, there is no try.”

Yoda encourages young Skywalker to undo old paradigms. We have experienced a true rise in acceptance of innovations, understanding of the digital economy and willingness to engage with start-ups. As part of a holistic digital innovation strategy, Corporate Venture Capital has become a must in 2016 with respect to our core markets Austria, Switzerland and Germany (ASG), particularly if we regard the abovementioned numbers. In its recent publication of 10 Big Venture Capital Trends by Inc Magazine, an increase in Corporate Deals and sprouting of Incubators and Accelerators (usually lead or sponsored by corporates) are among the first two most important trends mentioned. Alas, we are already unlearning the old ways: Do you must, may the Force be with you!

For more infos about Corporate Venturing and how we can support you in this area, please contact us directly.