How to find an investor. Carolin Wais on principles of startup investing and finding unicorns

Carolin Wais, city — Munich, a partner Plug & Play Ventures, LinkedIn

About me

I started my career at Siemens before joining their $1 billion investment vehicle, Next47, in 2015. This was my first role in venture capital, and I immediately loved the dynamic environment, meeting founders with a bold vision and the ability to have an impact on the success stories that shape our world for tomorrow. After three years in growth investing, I joined Plug & Play in 2019 to expand our early-stage investment activities in our Munich office. Fast forward to today, we have invested in nearly 200 startups from our EMEA Investment Committee, I have helped to launch multiple programs around the globe, and I joined our partner board last year.

The work of an investor requires intellectual curiosity, openness to new ideas, and strong skills in both numbers and people management. Especially in early-stage investing, pattern recognition is important for judging how big the vision and ambition of a founder are. We always recommend our analysts have at least 100 startup calls in their first month to really understand what makes a great team and company.

About investments

Investing in startups comes with inherent risks, as unexpected challenges can always arise. One of the most common challenges is cap table issues, for instance, if founders give away too much equity too early. This can be solved through restructuring the cap table by buying back some of the shares. On top of that, fundraising in the current environment can be a challenge so filling up a round can take more than 12 months. 

As we invest in the early stages, we have been lucky to be part of 34 unicorns and have invested in over 2000 founders since inception. Over time we have been lucky to expand our investments to different stages through multiple projects:

1. We launched a very early-stage investment program called Startup Camp, where we invest in the best teams right from the start.
2. From our Plug & Play family office, we still invest $50 000 — $150 000 in up to 250 startups every year.
3. We have also been raising external funds with governments, corporations, family offices, and our founders as LPs, allowing us to invest larger amounts in Series A and B.

At our investment stage, the team is often the most important factor. Then we look for large markets that are ready for a disruption. Generally, we really like to see what value proposition founders can create for their future clients and if it’s a pain killer or just a vitamin. As we are going through turbulent market times, nice to haves most likely won’t succeed. So, in a nutshell, we are looking for incredibly ambitious founders who want to create a game-changing company that we believe can generate a 100x return on our investment

We have more than 65 offices and are constantly expanding. We want to find and fund the best startups everywhere. 

Over time we have built a worldwide leading ecosystem for founders:

1. We can create actual business impact for them by connecting them to our 550+ corporate partners — we always want to create a win-win so if the founders pilot and implement with the corporations everyone wins. 
2. IT perks: we have built an ecosystem of IT perks that allows our founders to save up to $1M annually
3. Office & knowledge access to 65 offices.
4. More than 700 PnP professionals that can support at every stage on the way — our founders do not just get an investor onboard, they become part of the PnP family.

We invest from our different vehicles: the family office does around 250 checks a year between $50 000-$100 000. In total, we manage over $1 billion in assets under management and also allocate funds through our Growth Funds. The ticket sizes here range from $250 000 to $3 000 000 and are typically a bit more later stage.

For runway planning, I recommend a minimum of 18 months to ensure the startup has enough money to grow into the next funding event. 

We will be with the founders until the exit and support in the good and the bad times. For instance, our CEO was there when FiscalNote went public. We will be there at every step of the way.

Investors’ advice

Understand your audience — investors review more than 10 deals per day, usually spend three minutes on a pitch deck, and receive emails from hundreds of founders each month.