Ludwig Schulze, CEO of Waterman Ventures, a venture capital provider, spoke to EDC’s Samee Zafar.
As a venture capitalist, what things you want to see in a pitch before you consider an investment?
Team, market opportunity, traction; roughly in that order of importance. Venture is inherently a bet on a few individuals. Their ability to execute an idea, to overcome inevitable challenges, to bring other great people with them and to convince customers/partners/investors and to not self-destruct in the process...a terribly hard combination of things that I've experienced first hand as an entrepreneur. It's hard to appreciate the many opportunities for failure and the perseverance required to make it through the good, bad and ugly of being an entrepreneur. The best idea, solution or market opportunity will all fail without a team capable of making it through.
Market opportunity is next. Is this attacking a known opportunity space or creating something new? Is it 10x better/cheaper/faster than the current options? Is there enough space to build a big, successful company? Fact is, venture is about big bets. We want to see great potential for a company to scale rapidly into a large market space (or create a new one---even if more difficult).
Traction is the generic term we use to describe what has been accomplished. This will vary widely by industry but naturally profits are the ultimate (but exceedingly rare in venture until later stage), revenue the early proxy, users a start and industry expert validation a sort of bare minimum. The more proof of market interest you have, and quickly, the better. Traction is equally the best way to judge the product. It is otherwise too easy to get enamored by technology for its own sake or distracted by bright, shiny things rather than actual value creating products.
Where are your current areas of focus and opportunity?
Venture is an incredible area to work in. We get to look at the 'next' everyday. In a context where Schumpeter's waves are only accelerating, venture is at the forefront of so much of how our world will evolve in the coming years. And I have the great benefit of leading a fund with a wide mandate; allowing me to look at a variety of opportunities across industries. While fintech is near and dear, my job is to find the experts in any given field to help me put an investment into context. But at the end of the day, being an entrepreneur in any industry has many of the same challenges to overcome.
What are your hobbies? What do you do in your spare time?
Beyond family, of course, eating and travel are my passions. I think of any given meal as a potential wasted opportunity to try something new, to be wowed with a new flavor or combination or preparation. I thank my French grandmother who had me eating sea urchin at age 5 (hated it then, my favorite now) for opening me to the artistic potential of food and Bourdain for combining it with my love of exploring the world. I think it's a wonderful way to understand a culture and heritage.
Your personal goals for 2019?
No wasted meals, explore another few countries and discover a few more shockingly great companies that will positively impact our future!