From 1999 until the end of 2006 I founded several technology startups. I am also a business angel and have invested in several startups since 2001. During this time I learned a lot about the startup business. How to raise money? How to build execution driven management teams? How to market products? And how to work with VC’s? (I painfully felt the drawbacks as well as the joys of having a VC investor on the advisory board.) I also learned how to bootstrap a startup as well as how to sell a company (exit). And a lot more…

In 2007 I joined Target Partners, a Munich based Venture Capital firm, as a Venture Partner. Since then I fully immersed myself as an investment professional and was always treated as part of the team. Early this year, I joined Target Partners as a new Partner.

People often ask me how to become a venture capitalist and why I decided to become a VC instead of founding or joining another company. To be honest – it just happened.

After two years of working on the other side of the table as a VC I have to emphazise that this move was a rather large paradigm shift for me. The entrepreneurial mind-set is more like “Yes, I can fix it” or “Come on, just do it”. As a VC I can’t operationally work in a startup as part of management, meaning, “I won’t fix it”. The entrepreneur/management team members are responsible for the operative business. In my new role “I have to let go”. Now, I am standing on the sidelines watching the game and hoping that my advisc, tips and voice might be heard and used by the team.

Seen it – done it

However, let me point out one important quality a VC should have. This insight is based on my work with VC’s as an entrepreneur as well as my experience working as a VC over the last two years:

• A good VC should have an entrepreneurial background.

Sure, there are exceptions, but statistics show that a good VC usually has a background which includes growing companies and/or developing and marketing products and services. Why? Because he will understand the needs, the problems, the daily work of a startup much better than a VC who has only seen it from the sideline and wasn’t part of the game.

Is the entrepreneurial background and experience enough to make a good VC investor? Definitely not! Venture Capital is a detail driven business, which demands additional talents and skills (e.g. curiosity, networking, accuracy, gut feeling, readiness and a lot more).

Conclusion: It was the right move

During the last two years I have enjoyed working with driven and enthusiastic entrepreneurs. I have seen interesting business cases and some not so interesting ones. I will focus on this chapter in an extra post.

This month (March 2009) the World Wide Web will turn 20 years old. Sir Tim Berners-Lee invented this world-changing layer on top of the Internet in 1989. It’s hard to overstate the impact this young technology has had already and it’s even more exciting to think about where it’s going in the future.

Tim still has great ideas about where the web should go next. His vision is of a major advance that could serve as the foundation for innovations that we can’t even imagine today.

One year ago Berners-Lee said that all the pieces needed to build a new Semantic Web are now in place. Last month he gave an impassioned talk about a related concept called Linked Data. The gist of the idea is that we need every institution that can do so to put raw data in a standardized format up on the web.

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• Technology trends and the Semantic Web (heyjude.wordpress.com)
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The Munich Venture Summit is a conference about start-ups and will take place in Munich on March 14, 2009. The motto this year is “Launching – even now!”

Goal of the event is the exchange of information and the networking between interested students, investors and experienced founders. The speeches and panels of founders and investors should motivate the participants to start an entrepreneurial career rather than a sometimes boring career as a consultant or a career in the middle management of a big corporation.

Beyond the normal networking the participants will get the chance to discuss their ideas and business case with potential partners and investors.

I will share some opinions and experiences about the question “Is a crises the right or even the best time to start a company?”

The speakers are the following:

• Ute Berger
• Ehssan Dariani
• Lukasz Gadowski
• Felix Haas
• Stefan Holtel
• Olaf Jacobi
• Moritz Keller
• David Kuczek
• Christoph Lienke
• Harald Ostermann
• Oliver Samwer
• Peter Schüpbach
• Gerd Seelinger
• Wolfgang Seibold
• Christoph Zinser

SOCIALISM
You have 2 cows.
You give one to your neighbour.

COMMUNISM
You have 2 cows.
The State takes both and gives you some milk.

FASCISM
You have 2 cows.
The State takes both and sells you some milk.

NAZISM
You have 2 cows.
The State takes both and shoots you.

BUREAUCRATISM
You have 2 cows.
The State takes both, shoots one, milks the other, and then throws the milk away…

TRADITIONAL CAPITALISM
You have two cows.
You sell one and buy a bull.Your herd multiplies, and the economy grows.
You sell them and retire on the income.

SURREALISM
You have two giraffes.
The government requires you to take harmonica lessons.

AN AMERICAN CORPORATION
You have two cows.
You sell one, and force the other to produce the milk of four cows.
Later, you hire a consultant to analyse why the cow has dropped dead.

ENRON VENTURE CAPITALISM
You have two cows.
You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows.
The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company.
The annual report says the company owns eight cows, with an option on one more.
You sell one cow to buy a new president of the United States, leaving you with nine cows.No balance sheet provided with the release.
The public then buys your bull.

A FRENCH CORPORATION
You have two cows.
You go on strike, organise a riot, and block the roads, because you want three cows.

A JAPANESE CORPORATION
You have two cows.
You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk.
You then create a clever cow cartoon image called ‘Cowkimon’ and market it worldwide.

A GERMAN CORPORATION
You have two cows.
You re-engineer them so they live for 100 years, eat once a month, and milk themselves.

AN ITALIAN CORPORATION
You have two cows, but you don’t know where they are.
You decide to have lunch.

A RUSSIAN CORPORATION
You have two cows.
You count them and learn you have five cows.
You count them again and learn you have 42 cows.
You count them again and learn you have 2 cows.
You stop counting cows and open another bottle of vodka.

A SWISS CORPORATION
You have 5000 cows. None of them belong to you.
You charge the owners for storing them.

A CHINESE CORPORATION
You have two cows.
You have 300 people milking them.
You claim that you have full employment, and high bovine productivity.
You arrest the newsman who reported the real situation.

AN INDIAN CORPORATION
You have two cows.
You worship them.

A BRITISH CORPORATION
You have two cows.
Both are mad.

AN IRAQI CORPORATION
Everyone thinks you have lots of cows.
You tell them that you have none.
No-one believes you, so they bomb the **** out of you and invade your country.
You still have no cows, but at least now you are part of Democracy….

AN AUSTRALIAN CORPORATION
You have two cows.
Business seems pretty good.
You close the office and go for a few beers to celebrate.