E101 [AI-Translated] EU Mega-Runden | SFF Studio | Nicole Herzog | VC vs. PE | SPV-Risiken | SOPHiA | Hydromea | Range

00:00:00: The original podcast

00:00:01: was recorded in German.

00:00:03: This podcast

00:00:12: Hello and welcome to Burn Rate, the VC Insider podcast.

00:00:16: I'm here talking with Guy Gjufredi about The Startup Scene With a Focus on Venture Capital.

00:00:20: Episode one hundred-one is coming up!

00:00:23: We're recording on Thursday June twenty fifth at nine p.m.. This podcast is sponsored by our partners umniumandupscaler.ch.

00:00:32: Guy good evening.

00:00:33: are you warm?

00:00:34: Yes it's nice and warm.

00:00:36: in my studio It's currently twenty four and a half degrees and outside it's over thirty.

00:00:42: Not bad!

00:00:43: Beautiful

00:00:44: sunshine, everyone should be happy about that.

00:00:46: We've been waiting for it after all.

00:00:48: Exactly exactly.

00:00:49: And you?

00:00:49: Exactly All good It is a bit hot here at almost thirty-one degrees

00:00:54: but

00:00:55: well I'll survive Guy.

00:00:57: what are todays topics?

00:00:58: Well besides the sweat marks we will setting in on us over next fifty minutes In news have European mega rounds.

00:01:05: Eight start ups has already done raises above billion in funding.

00:01:09: Then we have a new AI Venture Studio from Swiss Founders Fund that will take a closer look at.

00:01:14: And Nicole Herzog was named Business Angel of the Year, then in The Focus topic We'll go into a pitchbook study on the development of VC and private equity AUM That is Assets Under Management In Europe!

00:01:28: The Study looks ahead to twenty thirty.

00:01:30: so very exciting... ...and then the listener question which is about SPVs and the pre-IPO hype whether that's a sensible way to access top tech deals or rather dangerous lack of transparency.

00:01:43: We're happy to put that into perspective and finally we'll get the transaction off the week

00:01:48: very good.

00:01:50: thank you very much guy for the tour d'horizon.

00:01:52: let start with news sifted, that is trade.

00:01:55: publication of financial times published an exciting analysis this week.

00:02:03: European startups, raised funding rounds of over a billion US dollars each in just the first half this year alone.

00:02:12: Together these mega-rounds make up almost a quarter total European startup fundings in that period.

00:02:19: What's striking is no longer the old twenty-twenty one logic with fast consumer scaleups delivery models or growth at all costs.

00:02:29: This time, it's mainly about AI-native companies.

00:02:32: It is very much deep tech defense compute infrastructure and generally very capital intensive models.

00:02:40: names like Isomorphic Labs N scale wave Helsing Amelabs or ineffable intelligence stand for a new category of European champions.

00:02:51: but this exactly where the tension lies Or I'd say The Point Of Criticism.

00:02:57: Europe has celebrated very large rounds before, for example with gorillas or Northvolt and seen that billion-dollar financings don't automatically create sustainable companies.

00:03:08: So the question is are we currently seeing beginning of a genuine European deep tech scaling phase?

00:03:15: or another overheating, this time just with an AI label on it.

00:03:18: Yes guy when you look at the sifted analysis is that for you a sign that Europe has finally learned to really finance large technology companies?

00:03:27: Or does this speed make you more

00:03:28: nervous?"?

00:03:29: Well first the positive again... On one hand European companies in strategic areas like AI, defense biotech and compute are now getting capital at a scale that used to be reserved mainly for US companies.

00:03:45: If you're playing in foundation models robotics autonomous driving an infrastructure classic series A and Series B financing sizes simply aren't enough anymore to really compete the very top accordingly.

00:03:58: thats of course great achievement Also a confirmation that people believe in the European ecosystem.

00:04:06: On the other hand, you also shouldn't forget large rounds shift to risk.

00:04:10: they don't remove it actually just make it bigger.

00:04:13: we've already discussed this several times on burn rate.

00:04:16: for many of these companies the technical regulatory and commercial risks are simply enormous especially when so much capital flows Like, for example with the seed round of AMI Labs or ineffable intelligence here.

00:04:33: The investors are basically buying a vision they're investing in a team They really believe in and then they bring along A really big dose Of hope that they'll achieve strategic relevance And that there will be able to grow into the Deca corn or Centicorn valuations.

00:04:46: That can work but it also massively increases the drop from a billion down to zero or more than one million down.

00:04:54: Yes, Max what does that mean for founders who aren't currently working in AI defense?

00:04:59: Or capital intensive deep tech?

00:05:01: do they need to worry?

00:05:02: all the European funding is now flowing into a few mega deals.

00:05:07: well I've thought about this carefully.

00:05:09: i think so.

00:05:10: if eight companies attract almost quarter of all european funding then automatically means The rest of the market has to compete harder for the remaining capital.

00:05:21: That's the logic, so for classic SaaS marketplace or consumer startups it certainly won't get easier and the air will definitely get thinner.

00:05:29: but I don't think that is only negative.

00:05:31: It also shows Europe willing to think more ambitiously.

00:05:34: again The decisive question whether these mega rounds pull an ecosystem along with them.

00:05:41: That means more talent, more infrastructure spinoffs specialized investors from overseas and above all better and clearer.

00:05:48: More efficient exit paths.

00:05:50: if that happens more founders ultimately benefit.

00:05:54: but it's only about equipping a few national champions with a lot of money.

00:05:59: without real market discipline then we're repeating old mistakes just this time in more expensive categories.

00:06:10: I'm very curious how this develops with Europe.

00:06:13: It's actually something to wish for Europe, that alongside the US and China it can build a third strong ecosystem.

00:06:21: Let's stay curious.

00:06:22: let's move on to the second piece of news namely Swiss Founders Fund has launched a venture studio For AI first companies in Zurich called SFF Studio.

00:06:33: The idea behind is that AI Is currently massively lowering the barriers To founding a company But what many founders still lack are co-founders, capital structure operational experience and access to a strong network.

00:06:49: That's exactly where SFF Studio wants to step in.

00:06:53: out of five hundred applications seven venture builders or cases were selected who will now build new AI first startups In a fourteen week program in Zurich.

00:07:03: What particularly interesting we think is the ambition SFF Studio wants to accomplish in significantly less time what traditionally takes twelve-to eighteen months through fast iteration cycles, intensive execution and also senior operator support.

00:07:20: At the end there should be a standalone company in each case with the builder as CEO –the person who already helped build the whole thing in The Incubator–and is then immediately ready for our first financing round!

00:07:35: And very importantly, AI shouldn't just be a feature or a convenience layer.

00:07:39: Every team has to show where AI creates a structural competitive advantage so real AI mode as it's commonly called in the jargon.

00:07:49: yes guy is this a logical next step for The Swiss Ecosystem For You?

00:07:55: Or Is There A Risk That Too Many Artificially Constructed Startups Will Emerge From This?

00:08:02: Well if you look at framing we've built here Also in the intro, then it's of course fundamentally logical especially with AI where we see that speed is extremely high.

00:08:12: What you try?

00:08:13: what do build and throw onto market?

00:08:16: And a single founder today can build prototypes much faster With right tools.

00:08:21: test markets also win first customers.

00:08:24: We had Vibe VC as guest Olivier.

00:08:26: That was very exciting.

00:08:28: They actually tried to invest exactly on such startups.

00:08:31: But speed alone...that not enough.

00:08:34: You also need a really good problem, strong team.

00:08:37: A very clear go-to market hypothesis and real defensible moat or advantage that you build for yourself.

00:08:44: Adventure Studio can certainly help here because it brings structure and creates pressure to create something.

00:08:50: It forces the teams validate quickly to discard things if they don't work not spend months quietly building on one idea in isolation but going out And especially when experienced operators, investors and founders are involved that can massively shorten the learning curve.

00:09:08: The danger exists too of course.

00:09:11: it's real if you rely to much on studio process.

00:09:14: so one size fits all approach then in end a company can emerge looks really good paper has early traction but maybe wasn't born out.

00:09:24: genuine founder market fit.

00:09:26: We know it well, we look at an extreme number of startups and the real success stories.

00:09:31: The good start-ups.

00:09:32: they don't feel like a project but often if I want to put it a bit pointedly... ...like in Obsession Of The Founders who really want give everything to become successful.. ..in certain area with their own idea And they're all in mentally, financially for the next ten years.

00:09:47: That's just not so easy to industrialize.

00:09:50: and with the founders-in-residence as their often called Inventure Studios there can also be a Not Invented Here syndrome even if they are involved from start.

00:10:00: or we've seen this when we looked at Venture Studio cases that behave more like employees than real entrepreneurs who want build company.

00:10:09: And if that's not the case, That of course really poisoned for a venture.

00:10:15: It might scale well for few months but then at some point The fan gets hit and unfortunately it doesn't keep growing.

00:10:21: Yes Max!

00:10:22: What would an AI first start-up from such studio need to prove in your opinion so they don't just look like and become another AI rapper?

00:10:32: Well, I think first it has to solve a real customer problem.

00:10:36: So not just show that you can cleverly use a new model or a new agent.

00:10:41: so AI isn't actually a business model but rather in this case more of an unfair advantage That helps To Actually Solve A Customer Problem.

00:10:50: Second the team should ideally Show Very Early That It Has Access To Proprietary Data Or To Workflows Or Distribution.

00:10:58: If everyone can build something similar with the same tools in two weeks, then there's no moat.

00:11:03: No defensibility anymore.

00:11:05: so the mode comes either from proprietary data From depth of integration or speed regulatory know-how for example Or very specific industry expertise.

00:11:15: and last but not least I'd look at willingness to pay especially In The AI hype.

00:11:20: There are many demos that impress But few products That customers Are truly willing To Pay For long term.

00:11:26: A good studio should therefore not just produce nice prototypes, but force hard market signals very early.

00:11:34: Pilot customers you name it, LOIs paid tests or already real retention?

00:11:40: Yes let's get to the third and last piece of news today.

00:11:43: Nicole Herzog has been named Business Angel Of The Year.

00:11:45: twenty-twenty six by SECA.

00:11:48: Congratulations Nicole really well done.

00:11:50: we're off course happy for The award honours her long-standing commitment as an investor, mentor and bridge builder in the Swiss startup ecosystem.

00:12:01: Nicole was a co-founder at Humantis – the provider of web based talent & performance management.

00:12:08: since the exit of Humantis in two thousand twelve she's been investing in Swiss international startups especially very early stage.

00:12:15: In doing so, she often accompanies founding teams across multiple financing rounds.

00:12:20: also takes on a very active role as lead investor supporting with capital strategic sparring governance know-how and access to her quite substantial network.

00:12:31: And her current investments include among others paves space stellar alpina get more brain cases scribble in Sphero and several other.

00:12:41: And in addition, she's also active on several boards and board mandates.

00:12:45: Not only at startups for example at Vue the iWare manufacturer and Inova... ...and before that She was also the chairwoman of Sharpenny and accompanied The Company through to the exit-to data site.

00:12:57: What I find exciting about this award is it shows how important business angels are our ecosystems too especially in very early phase when its not just about capital but trust Experience, first customers governance and sometimes simply about working with someone who believes in the team before it's obvious.

00:13:18: That is often where business angels come-in.

00:13:20: yes Max when you look at Nicole's award now what makes a really good business angel for you?

00:13:25: Is it mainly capital network operational experience or ability to recognize talent of founders early on?

00:13:33: Yes difficult question I think its combination but for me most important point timing.

00:13:40: A good angel is there when a startup still seems too early or too unfinished, Or to risky for institutional investors like VCs.

00:13:50: In this phase capital matters alot but even more important of course Is the credibility that an Angel brings When someone like Nicole invests.

00:13:59: That's not just ticket thats signal to market.

00:14:02: This team has been taken seriously Especially in early rounds, such a signal can help to win over further angels and maybe also early VCs customers or board members.

00:14:14: And then comes of course the quality of the sparring.

00:14:17: good Angels don't push themselves into operations too much but they helped with the important and right questions.

00:14:24: so how do you build the Board?

00:14:26: How do structure next round?

00:14:28: where do governance issues arise?

00:14:30: when Do You have to focus?

00:14:32: These are things founders often only learn through mistakes, and a good angel can't prevent those mistakes but they can certainly shorten them considerably.

00:14:40: What does this award mean for the Swiss ecosystem guy?

00:14:43: Is it more of personal recognition or is there bigger signal behind that?

00:14:48: Yes!

00:14:48: Of course its a personal recognition to Nicole and her commitment over more than decade.

00:14:53: But the bigger signal is also that the Swiss ecosystem is maturing when experienced founders give capital and experience back into the network after their exit.

00:15:04: I briefly opened a list of who's been business angel over the last ten years, David Studer was on it Thomas Dubendorfer Christian Wenger.

00:15:13: they've all done a lot for The Startup Ecosystem and actively contributed there know-how as business angels to companies they invested in.

00:15:23: For me, that's a decisive cycle when capital gets reinvested.

00:15:27: First the companies emerge then come the exits and new angels with the exits And then hopefully also leads to better generation of next founders.

00:15:35: That is how the ecosystem grows organically Especially in Switzerland where there are actually a lot of capital available but early stage risk isn't always automatically financed Exactly.

00:15:45: these kinds of angels are extremely important.

00:15:48: I also find it notable that Nicole especially supports founding teams and women founders themselves, and is active as a mentor.

00:15:55: Because access to capital and networks you have say isn't equally distributed And when an experienced investor here can build bridges That can improve the quality and diversity of deal flow in the long run.

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00:17:21: today's focus topic And namely, it's about the development of private capital assets under management in Europe through twenty thirty and what that says about state-of-the-capital market here.

00:17:35: Yes pitch book!

00:17:35: That is a study sent to us paints divided picture so venture capital and private equity are no longer moving in lockstep.

00:17:46: on one side stands venture capitol where outlook significantly more cautious Pitchbook expects that European VC assets under management will fall from around US dollars last year to about US dollars in.

00:18:04: That would be a clear reversal of the growth story that has characterized European FICI for many years.

00:18:10: The main reason is weak fund raising since twenty-twenty three combined with fewer exits so less DPI, fewer distributions back to LPs and ongoing uncertainty around valuations.

00:18:24: On the other side stands private equity.

00:18:27: There, the picture looks robust.

00:18:29: European Private Equity Assets under management are expected according to Pitchbook To rise from around US dollar in.

00:18:45: That's not a boom, but it is a stable growth path you have to say.

00:18:50: PE thus appears more mature and resilient even though interest rates inflation and geopolitical risks continue to weigh on it.

00:18:58: Yes for us this divergence especially exciting.

00:19:01: Is European venture capital only temporarily under pressure or are we seeing deeper structural correction?

00:19:08: And why can private equity keep growing while VC has to fight for renewed trust?

00:19:13: Yes, guy.

00:19:13: Why is the outlook of European venture capital assets under management currently so weak in your opinion?

00:19:19: Well, I'd say the most important factor here is fundraising.

00:19:22: Venture capital depends very heavily on LPs so LPs being the investors in the funds regularly putting new capital into the funds.

00:19:32: and that's exactly what has become significantly harder since twenty-twenty three.

00:19:36: after the boom year of twenty twenty one The market cooled down sharply.

00:19:40: there were massively fewer exits Fewer major liquidity events And accordingly much less money flowing back to investors.

00:19:47: And when LPs barely get capital back from old funds, then they become much more cautious with new commitments.

00:19:55: We're seeing that right now.

00:19:56: too many investors we talk to say hey I'm still waiting for one liquidity event or another before i make a new commitment to fund and especially two new funds where there not already traditionally invested across various vintages.

00:20:11: And accordingly, it hits smaller and also younger VC managers especially hard.

00:20:17: In addition to less liquidity coming back many startup valuations are still under heavy pressure.

00:20:24: as a result many VCs have only been able show up rounds in their books and NAV calculations over the past few years some companies growing more slowly than expected.

00:20:34: others even had to accept down rounds or they're simply avoiding disclosing new valuation altogether And that of course makes it very difficult for investors to assess how much the existing underlying portfolios are actually worth.

00:20:49: Yes, uncertainty and lack transparency is not at all beneficial because if you don't know what your investing in or an entire sector functioning right now why would make allocation since completely unsure?

00:21:04: That's exactly why Pitchbook assumes European... VCAUM will decline significantly by twenty thirty in the base scenario they calculated and what I find particularly striking, i have to emphasize is that even in the optimistic scenario VCAUm in twenty thirty still slightly below the level of twenty twenty five.

00:21:25: That's last year actually shows at the market first has to deliver renewed trust exits an real capital flows before more capital flows back into asset class.

00:21:37: Yes, the question we also have to address right now with a whole AI boom or other topics that are super hot in Europe.

00:21:45: Can't this negative VC outlook be turned around?

00:21:49: Isn't the momentum actually quite positive?

00:22:06: Those are probably the most important sources of hope for European VCs right now.

00:22:11: AI is, of course, the most prominent right now and it's also significantly anchored a bit in all these sectors and a lot of capital is flowing in there too.

00:22:21: without this trend you really have to say that VC statistics would look much weaker than they do.

00:22:27: AI is bringing dynamism back into a market that otherwise still seems very subdued.

00:22:33: We just talked at the start about, um... The news regarding the eight billion dollar financing rounds in Europe That's already-that it somehow a quarter of investments?

00:22:43: That's all ready massive concentrated in few rounds and the risk Of course Is that investment activity is concentrating Very heavily on A few large companies And a few large financing rounds And as a result, the headline numbers can look okay or even good.

00:22:58: Even though the breadth of the VC market remains under pressure many startups outside of AI still have extremely great difficulty getting access to capital.

00:23:07: so what will be decisive is whether real exits emerge from this AI wave.

00:23:12: Europe is still strongly in the deployment phase.

00:23:15: Money has been invested, but the big liquidity events are still pending and if AI companies in Europe achieve large exits then that can bring back trust and reactivate LPs more strongly.

00:23:26: And If not Then AI remains a more isolated bright spot But Not Really A Solution For The Structural Problems We Currently Have In The VC Market.

00:23:34: Yes Let's Take A Quick Look At Private Equity Max.

00:23:36: Why Is Outlook For Private Equity In Europe Significantly More Stable Than For VC?

00:23:42: I think private equity has grown significantly more stably in Europe over the past few years than VC.

00:23:48: PE has by now become a core strategy for many institutional investors.

00:23:53: I actually had a meeting today with the pension fund manager and he talked about PE like it's completely normal, so you have a portion in alternatives and within that alternative portion PE is completely standard.

00:24:07: but VC then is a bit like Swiss youth research amateur hour quite something and a lot of pension funds see it that way.

00:24:17: There are, by the clearly communicated that they're no longer investing in private markets, and especially not in VC because simply the TER is too high.

00:24:32: The costs are too high And also returns don't match risk being taken on.

00:24:37: You have to say so.

00:24:38: But still those pension funds that are open to it invest in PE without any ifs or buts.

00:24:45: Basically leave VC aside.

00:24:47: And yes, you also have to say the decline after twenty-twenty one was less severe in the PE market than in the VC market.

00:24:56: So PE companies are more mature and have cash flows can be operationally optimized.

00:25:02: that makes asset class less dependent on individual large exit windows or extreme valuation cycles.

00:25:09: Yes of course PE remains vulnerable interest rates and financing costs.

00:25:14: We're seeing that right now too with Partners Group and the Partners Group share price because many transactions work with debt.

00:25:21: with so-called leverage.

00:25:22: But Pitchbook still expects European private equity assets under management to grow from around USUSD one point five trillion to one point seven trillion U.S dollars from twenty, twenty five to twenty thirty and that shows the market isn't risk free but is much better supported than venture capital.

00:25:40: good let's get to listen.

00:25:42: a question we received And it fits quite precisely with a debate that's currently heating up in the venture and tech market.

00:25:49: It is about so-called SPVs, special purpose vehicles.

00:25:53: These are so called Special Purpose Entities through which multiple investors can pool together to invest.

00:26:01: That sounds quite technical at first, but it's actually a fairly simple matter.

00:26:06: You might not get directly into the financing round of a hot tech company like say SpaceX But through an SPV you can still get A piece-of-the-pie.

00:26:16: and that's exactly what we're seeing right now very strongly with potential IPO candidates or particularly hyped startups scale ups that is companies that many investors believe could go public At some point.

00:26:29: Above all, people really want to get in.

00:26:33: In the US you immediately think of names like Anthropic SpaceX or Stripe.

00:26:39: In Europe we see similar dynamics with very hot AI startups.

00:26:43: Most recently for example there's been reporting on Lugora, Eleven Labs Or Loveable.

00:26:49: The current trigger is a Financial Times report about Lugore.

00:26:52: That's Swedish legal AI startup.

00:26:55: Apparently shares...or rather stakes turned up on a secondary platform even though the company itself said, we have not approved such transactions.

00:27:05: And that's exactly where it gets interesting because with these SPV structures its' not always immediately clear are you really buying shares of Or are you just buying an economic claim to something, for example and exit bonus or something like an IPO bonus?

00:27:25: And that's then several levels removed from the pot.

00:27:28: That is also why some investors roll their eyes at SPVs.

00:27:32: They can be very useful because they create access and bundle smaller tickets but become extremely opaque especially in a secondary market.

00:27:42: This is when existing shareholders resell their stakes.

00:27:45: chains quickly form Fund sells to SPV, SPV resells stakes further.

00:27:52: Maybe there's another vehicle stacked on top.

00:27:54: then.

00:27:54: in the end you don't simply have a piece of SpaceX or apiece of Anthropic anymore but apiece for structure that somehow hanging off Another structure.

00:28:04: so apiece over peace and on top These deals play very, very strongly on FOMO.

00:28:11: It sounds like the last chance at an IPO getting quick before everyone else can.

00:28:15: but exactly in such moments you have to stay especially level-headed and realistic because a good company isn't automatically a good investment Especially not when the entry price is very high The fees are high The rights are weak You don't know whether you'll even be able sell your position later.

00:28:34: Levin therefore asks Does it make sense to invest in potential tech IPO candidates through an SPV?

00:28:41: And I think that's a good question because it doesn't just concern SPVs, but generally this dream many investors have of getting in early enough on the really big tech wins.

00:28:52: Yes guy fundamentally Why are SPVs so attractive to investors in the first place?

00:28:58: I mean, you can clearly say they offer investor's access to deals.

00:29:01: They otherwise simply would never have access too.

00:29:04: as an individual or non-professional market participant.

00:29:08: many private investors or small family offices don't simply get directly into a round from Stripe Space X Anthropic Or The European Unicorn And that partly already applies To Small Firms From The ETH and EPFL Environment.

00:29:22: Too Many private investors can no longer get access to top deals at all.

00:29:27: So SPVs aren't just a good access point for the pre-IPO hype today, but actually also for hidden champions of the startup world who don't want to dilute their cap table too much with pre-ipo SPV's.

00:29:41: The message in the foreground is hey we're pooling capital buying shares or economic rights through structure.

00:29:48: Then you have the exposure that you really want in a company.

00:29:51: And yes, two to three years it will go public and then there's clean return!

00:29:56: And that's, of course, emotionally already very powerful.

00:30:00: You have the feeling you're getting in before the IPO and that's exactly where The Danger lies.

00:30:05: as you said... what type of share do I have?

00:30:27: Do we have founder shares here or do we have shares with a liquidation preference.

00:30:32: What exactly are the rights behind that and these shares in fund it's invested there, that exists too sometimes.

00:30:38: so you simply have small stake in anthropic plus few other positions but just to claim on proceeds that exist.

00:30:46: two other transfer restrictions mentioned.

00:30:49: Sometimes the transactions can't even be carried out because the company ultimately hasn't approved them.

00:30:54: And maybe also, lastly if it's now... If its invested in shares do I count as a beneficial owner?

00:31:01: and what tax consequences do i have?

00:31:05: Do I suddenly have to pay capital gains tax in the country, In US or wherever that deal takes place which then eats into return again?

00:31:13: Yes.

00:31:14: Where would you see biggest risks?

00:31:15: so more with startup itself Or valuation and SPV structure.

00:31:20: where do we focus when it comes to risk?

00:31:23: Good question!

00:31:24: All three are of course very big risks.

00:31:28: The start-up can be great Still... You cannot pay any price.

00:31:32: Maybe the price is far too high, especially with a pre-IPO hype.

00:31:36: You're basically already paying for the perfect IPO story and you're paying a premium on The Last Valuation.

00:31:43: sometimes it's even two times Premium On The Last valuation.

00:31:46: that was set by VC's and strategic investors only few months ago And That Already Feels Enormously High Relative To The Whole Market liquidity, it's deceptive.

00:31:59: just because someone claims there is a secondary market.

00:32:01: That doesn't mean for long time that I can simply sell the shares again later if company still private after two or three years and thing does not go public.

00:32:10: And third you already heard this earlier structure is extremely critical Not in terms of what exactly am i buying but also hey!

00:32:19: What fees are my actually paying?

00:32:21: Am I paying manager or carry who offered me deal?

00:32:25: Do I even get information rights, voting rights?

00:32:28: How long does this SPV last?

00:32:31: is it two years.

00:32:32: Is it three years or ten years where the capital could be locked up?

00:32:36: do i also have anti-dilution protection if there's a down round and transfer rights?

00:32:42: all of that massively influences what ultimately comes back to investor in positive outcome.

00:32:50: If say between me now set an SPV There are several SPVs and funds underneath, then it quickly becomes confusing who's taking what out now at the exit.

00:33:02: And then you're maybe not really investing in the company anymore but in a chain of claims which in the positive case can eat up a lot of their return or almost the entire return and actually in a good or neutral case that you'd hoped for.

00:33:17: all these fees can lead to your having very little profit

00:33:20: and sometimes almost no money retained at all, if it wasn't a good IPO.

00:33:25: And that's of course then extremely

00:33:27: unfortunate.".

00:33:28: Yes!

00:33:29: If you carry the discussion forward like this Max would you now rather say stay away from SPVs?

00:33:35: or are there also cases where it can definitely make sense to participate in an SPV?

00:33:40: Yes, definitely so.

00:33:41: an SP V can very well makes sense if its structured cleanly... ...if the sponsor is trustworthy.

00:33:48: That I think very important.

00:33:50: The fees should be fair and it should also be clear what you actually get.

00:33:54: Especially for professional investors that can be a legitimate way to get access to otherwise closed

00:33:59: deals.".

00:34:00: Yes, but for many private investors the red line is if I cant explain in two minutes what i actually own how i get back out?

00:34:08: And What rights do i have?

00:34:09: then i shouldn't invest!

00:34:12: My rule of thumb here would be don't get dazzled by the name.

00:34:16: especially with potential tech IPO candidates, it always sounds like the last chance before the IPO.

00:34:23: In reality you're then often buying at a very late and high price and a lot of structural complexity.

00:34:34: So SPVs can be a tool, but they're not a cheat code to get into the next SpaceX or Anthropic or Eleven Labs risk-free.

00:34:43: quite the opposite actually.

00:34:44: The more exclusive and hot the access sounds ,the more closely you should look.

00:34:48: yes And maybe one more point that just comes to mind at the end.

00:34:55: An investor called me and asked for my opinion, so he had invested in an American SPV.

00:35:01: And then the sponsor called him and said hey do you want to join in again?

00:35:05: We need you to put another fifty percent of the

00:35:07: capital.".

00:35:09: I said well y'know i can't really tell you much it depends on structure.

00:35:14: everything we discussed In the end He did because It has a pay-to play clause.

00:35:21: His share would have simply been brutally diluted, and he basically had to write off the investment.

00:35:27: So pay attention to these things too!

00:35:29: Right at start.

00:35:30: do you have a Pay-to-Play clause?

00:35:32: If new round comes then invest in order even save your investments.

00:35:37: so Levin our short answer is yes.

00:35:40: it can make sense to invest in an SPV but only if structure rights fees valuation are clear.

00:35:47: investors and they really understand them, can explain to someone else.

00:35:52: So if you could explain it with your wife or girlfriend then that would be good!

00:35:56: For everyone else the rule is If the pitch is mainly trying to trigger FOMO Then thats usually already alarm bells for the power of five.

00:36:04: Let's get into the Transactions Of The Week.

00:36:06: Some transactions were also announced last week That we'd like a closer look at today.

00:36:11: Yes, let's start with Sofia Genetics.

00:36:13: That is a Swiss health tech and precision medicine company with roots in Romandy and today listed on the NASDAQ.

00:36:21: The company has now completed an oversubscribed public offering of fifty-seven point five million.

00:36:27: Importantly this isn't a classic startup financing round but a capital increase.

00:36:37: With Sophia DDM, they're building a cloud-native platform for data driven medicine.

00:36:42: The platform analyzes complex genomic and increasingly also multimodal health data And is meant to help doctors labs and biopharma companies make better decisions on cancer and rare diseases.

00:36:54: At its core it's about connecting clinical data Genomics & AI so that precision medicine becomes more broadly accessible.

00:37:07: that's diagnostic labs or academic centers, but also biopharma partners.

00:37:12: According to the company almost a thousand healthcare institutions use the platform.

00:37:17: That is important because SOFIA genetics isn't just selling software But connects data analysis and clinical workflows together through global network.

00:37:27: So The more institutions are connected The stronger the platform becomes as infrastructure for precision medicine.

00:37:34: Yes, so you have to say the capital increase is interesting and also the timing.

00:37:39: I mean, Sophia Genetics has been listed on The Nasdaq since twenty-twenty one And back then their IPO price was eighteen US dollars per share and the new offering Is now at four dollars seventy five per share.

00:37:51: So that shows the valuation Has come down significantly Since the IPO.

00:37:55: we definitely wanted To highlight and mention That too.

00:37:58: At the same time the company has Also Been able to generate more momentum.

00:38:02: again.

00:38:05: The

00:38:18: capital is meant to flow into platform expansion, new applications and partnerships.

00:38:25: Particularly relevant here is the planned collaboration with Memorial Sloan Kettering, one of world's leading cancer centres.

00:38:33: The two companies want to build a precision medicine hub that combines clinical data with Sophia AI platform.

00:38:41: Yes I'd say an exciting company with Swiss roots.

00:38:44: That also shows well after IPO journey doesn't simply get easier.

00:38:50: As second transaction today we're including non-standard transactions.

00:38:54: Hydromia is a deep-tech company from Romandy in the field of underwater robotics and subsea communication.

00:39:01: Together with Florida Atlantic University, Hydromya has now won a million dollar award as part.

00:39:09: Importantly, as mentioned this isn't a classic financing round but a defence grant from a trilateral initiative between the

00:39:17: U.S.,

00:39:17: UK and Australia with Swiss start-up at the centre.

00:39:20: Yes, hydromia is developing optical underwater communication so kind of wireless broadband under water.

00:39:26: their so called Luma platform uses light instead.

00:39:30: acoustic signals enables high data rates for underwater vehicles sensors also for stationary systems on seafloor.

00:39:39: In this project, Hydromia's optical technology is combined with the acoustic networking expertise of Florida Atlantic University.

00:39:48: You could expect target customers to be defence and maritime security companies Navy Autonomous underwater vehicles Sensor networks Monitoring sea areas Critical infrastructure on seafloor Those are main themes for hydromia.

00:40:03: At same time The technology a clear dual use case.

00:40:06: The same architecture can be used for offshore energy, environmental monitoring, subsea inspection floating wind cable infrastructure and also in many other areas.

00:40:16: Yes

00:40:17: what's exciting is the technical trade-off that hydromia addresses.

00:40:21: acoustic communication works over longer distances but it very slow.

00:40:25: optical communication is significantly faster And more energy efficient But has shorter ranges and needs different operating conditions.

00:40:34: The combination of both approaches can make underwater operations significantly more capable, acoustics for robust control over distance, optics

00:40:51: underwater communication and networking system that's also meant to function under heavy load or in contested environments.

00:40:57: Strategically, it is already a strong signal.

00:40:59: Swiss deep tech is becoming part of an international defence and dual use infrastructure here And hydromia is positioning itself as the provider for possible data infrastructure.

00:41:09: Let's get to the last transaction of today.

00:41:12: Range is a fintech and stablecoin infrastructure startup with Swiss roots in Crypto Valley, ZUG, and a distributed team in London, New York, Munich & Lisbon.

00:41:23: The company has now closed an over-subscribed Series A round of USUSD eight point three million dollars.

00:41:32: The round was carried by fintech and crypto-native investors including TX Ventures, Sixthirty and Maven Eleven Capital.

00:41:41: Yes!

00:41:41: Range is building a platform for companies that work simultaneously with stable coins and traditional currencies.

00:41:47: the product consists of two core modules.

00:41:50: one module acts as system record across bank accounts wallets custodians exchanges as a control layer that checks transactions for risk, compliance and internal policies before execution.

00:42:04: The central point is stablecoin.

00:42:06: payments are very fast but also irreversible And that's why controls actually have to take effect Before the payment not only afterward.

00:42:27: According to the company range protects more than thirty billion US dollars in customer assets, monitors over two hundred networks and more then a hundred stablecoins.

00:42:37: What I find exciting is who's investing?

00:42:40: The fact that classic FinTech investors like TX Ventures and Sixthirty are joining here shows that stablecoin infrastructure is increasingly seen as part of normal financial architecture not just simply as crypto.

00:42:53: specific topic The capital is meant to go into further expanding the existing products, into engineering, go-to market and additional integrations.

00:43:02: Strategically, the goal now is to establish range as the operating system for treasury risk & compliance across fiat and stablecoin rails.

00:43:12: If stablecoins keep growing in B-to-B payments And in on-chain financial applications, exactly these kinds of tools are needed.

00:43:21: Ones that enable speed without losing control

00:43:36: and

00:43:37: auditability.".