After three decades in European venture capital, Sven Lingjaerde, co-founder and managing partner of venture capital firm Endeavour Vision, admits that while luck does play a part, it isn’t the primary reason for achieving success in the industry.
‘You have two ears and one mouth, and you need to use them in proportion to be lucky,’ comments Lingjaerde, who was awarded Outstanding Contribution to European Venture Capital at the Investor AllStars Awards last month.
‘You also need to be curious, you need to listen to people, and if you really listen, things start to add up,’ he continues. ‘Then you have to follow your instinct – which is almost always a brain/heart dilemma – and strive to achieve a good equilibrium with your investments.’
Lingjaerde declares that striving to embody these traits, either as an entrepreneur or investor, are the keys to achieving long-term success. Indeed, these same traits are found in the ten category award winners of the ninth annual Investor AllStars Awards.
The event honours the most innovative and high performing members of the European venture capital industry. Organised by technology investment bank GP Bullhound and Vitesse Media, publisher of Business XL, about 600 people attended the awards at a glittering ceremony held at the Natural History Museum.
Manish Madhvani, founding partner of GP Bullhound, who acts as chairman of the judges, comments, ‘I’d like to be the first to congratulate all the winners of this year’s Investor AllStars Awards.
‘There were some amazing achievements against a backdrop of testing economic conditions. For over $10 billion of value to be created by the shortlist of the Exit of the Year category, it is clear that risk-taking and value-add investment is still very much on the agenda in Europe.’
Judges awarded Lingjaerde the grand prize of the evening for his long-term contribution to the industry through setting up one of Europe’s leading venture firms and establishing an industry benchmark through the European Tech Tour Association, a not-for-profit organisation that aims to develop emerging technology companies from Europe.
Looking back at his time in the industry,Lingjaerde says, ‘I came into venture capital because it is a mixture of several things I like: technology, finance, legal, interpersonal skills, negotiation, and then you also have the ability to be useful to the economy in general. You create things, and even if the companies don’t succeed, your work adds to the learning curve of the ecosystem. This is a job where it is fun everyday to go to work.’
Heiko Hubertz, founder and managing director of German online gaming company Bigpoint, the world’s largest portal for browser games, presented a well-received keynote speech that outlined the future of the gaming industry and detailed the best model for future revenue growth in the market.
Hubertz was also among the winners this year, being named Entrepreneur of the Year for his work in achieving a hugely successful exit for the investors in Bigpoint. In April this year, two private equity firms, TA Associates and Summit Partners, acquired a majority stake in his business for $350 million, a deal valuing the company at more than $600 million.
‘I would like to express my gratitude to the Investor AllStars Awards for recognising Bigpoint’s achievements with such a prestigious accolade,’ Hubertz remarks. ‘We look forward to building on this momentum in 2012 and beyond, as we seek to accelerate our global expansion and provide the optimum multi- platform online gaming experience to our customers the world over.’
There was another German business that was praised in the awards. High-Tech Gründerfonds was named Equity Gap of the Year for the second time after extremely high investment activity and generating impressive exits in a difficult market.
Managing director Dr Alex von Frankenberg says that next year the Bonn-based firm will continue to seed between 40 to 50 high-tech companies, in addition to attempting to realise between ten and 15 exits. Currently, von Frankenberg says he sees both positive and negative elements about the industry.
He explains, ‘What I see as being very positive is the very strong dynamic regarding new start-ups, and that the number of business angels who are actively setting up new companies is further increasing.
A number of regional clusters, such as Berlin, are also providing very good environments for new companies. At the same time, it is still very difficult for VCs to raise enough fresh money.’
Awarded VC Personality of the Year was Niklas Zennström, founding partner of international venture capital firm Atomico and businesses Skype and Kazaa.
Zennström comments, ‘The journey from entrepreneur to venture capitalist has been a fascinating one, and it’s great to receive this award as Atomico celebrates its fifth birthday. Although the award is for Personality of the Year, I know that it also reflects the outstanding teamwork at our firm, which has produced some very exciting investments.
These include well-known ones, such as our investment in Rovio, but also some fascinating, less visible investments that have remarkable potential.’
FROG LEAPS AHEAD
The Buyout/Development Capital Fund of the Year category saw a shortlist of very strong candidates with not much setting them apart, but it was Frog Capital who emerged the winners. After a hugely successful year for Frog, which saw them achieve three exits that together have an aggregate transaction value of €1 billion, the judges felt they deserved to walk away with the prize.
The sale of their stake in agri.capital in March was their third exit within the year, after previously selling BuyVIP to Amazon and Sic Processing to Nordic Capital, which alone is reported to have sold for €500 million.
Partner Mike Reid accredits the successful year to a very strong team. The London-based firm invests in the cleantech and IT and digital media sectors, which Reid remarks are vibrant areas displaying significant growth.
‘An important thing for me is that we fully understand the sub-sectors within them,’ adds Reid, ‘whether it be e-commerce or ID verification, for example. Knowing about them allows you to build excellent relationships.’
Possibly the tightest-fought category was Private Investor Network of the Year, with the judges finding it so hard to pick a winner that they also named a highly-commended nominee – something that was done in no other category.
The amount of new players and high-level of innovation in the category truly impressedthe judges, and while Braveheart Envestors, with their strong deal-making, are deserved winners, another network caught everyone’s eye. It was felt that Belfast-based Halo Business Angel Network had to be publicly acknowledged for their work in encouraging enterprise in Northern Ireland.
Scott Haughton, a founding director of Envestors, comments that there are a number of factors that have led to the success of the business angel network.
‘Over the past couple of years, it has been the case that high-net-worth individuals have realised that if they have wealth, they need it to work for them,’ he explains. ‘They recognise that angel investing, particularly with the recent EIS enhancements, offers a very attractive investment opportunity and where they can also add their weight of experience and knowledge.’
Halo’s network director, Richard Ferguson, remarks of his business, ‘In the last two years we have raised just over £3 million in private investment – before that it was averaging at about £300,000 per year.’
Ferguson acknowledges their decision to start charging for Halo membership last September – a move to help increase revenue in addition to the funding received from regional agencies Invest Northern Ireland and InterTradeIreland – as a key to their success and feels it has been well received and that numbers have grown.
Baring Vostok Capital Partners for the $8 billion Nasdaq float of portfolio company Yandex in March this year. Yandex is a Russian search engine that has more than 38 million unique monthly users.
Other winners on the night included Demeter Partners for Cleantech Investor of the Year, YFM’s British Smaller Companies VCT for Venture Capital Trust of the Year and DFJ Esprit for Venture Capital Fund of the Year.
DFJ Esprit chief executive Simon Cook says receiving the industry accolade marked a point of success for the firm this year, while David Hall, managing director of YFM Equity Partners, adds that the award is ‘testimony to the great performance of our business over the past year’.
For the full list of winners read more.