Why has Verve Ventures started to do more investments outside Switzerland?
Our mission is to become a European platform and we’ve always been open to non-Swiss investments. But in the early days, when Verve Ventures lacked the strong international network it has today, we weren’t systematic about it. We did some investments in Germany, Austria, Belgium, and Spain because they were presented to us on a silver plate, so to speak, by a strong lead investor. Today we are the most active VC investor in Switzerland and we have developed an international network over the years. The natural next step is systematic internationalization in order to continue presenting the best investment opportunities to our investors.

How do you go about internationalization?
First, we become active as an investor in a new region. This is how we establish a name and how other venture capitalists, private investors, and corporate VCs from that region hear about Verve Ventures. We started out in Zurich and did our first investments in the German speaking part of Switzerland. We used the same playbook to expand into the French-speaking part of Switzerland, where we started to invest in spin-offs from EPFL, which then attracted investors from Romandie.

What countries do you focus on right now?
UK, France, Germany, Benelux and the Nordics. Since we started systematic internationalization in mid-2018 I have traveled regularly to France to visit startups, venture capital funds, incubators, and universities. Going forward, we’ll grow our international team substantially. We have Michael Lütolf, a former Verve Ventures analyst who joined us again after working for a German VC fund. He represents Verve Ventures in Berlin.

How do you find and choose startups in France?
Outside Switzerland, we’re looking for startups in the growth phase who wanted to expand internationally. In France, we sought startups where a financing round is already in place, backed by strong French VC funds. These startups saw the benefit of including Verve Ventures in a financing round instead of adding another local VC, because Verve Ventures is an international investor with strong networks Switzerland and Germany. We can open doors for them.

How much did the local VCs like that?
They were quite welcoming, intrigued by our model and curious to know more about it. This is because they didn’t see us as a threat. They understood that working with us has positive side effects.

Is France interesting as a startup nation?
It has really developed a lot of momentum in the past few years. The invested volume has caught up with other places. France now ranks second in Europe after the UK. France has an ecosystem with all the necessary ingredients to produce high-quality startups: Strong research coming out of engineering and business schools, universities and research centers, a vast consumer market with 70 million inhabitants and startup success stories such as Blablacar that motivate a new generation of founders. We have invested alongside highly relevant investors such as Partech, idInvest, Demeter, Kurma Partners, Quantonation, Daphni, ViaID, Capagro, and Airbus Ventures.

What about interesting startups that are just far from the European startup hubs? Will you be able to spot the next, say, Romanian unicorn such as UiPath?
We will get to know more promising startups by traveling to pan-European startup events and talking to relevant co-investors. We already have deal-sharing in place with many of them and this deal pipeline will get stronger in the future. And of course, we’re also open for opportunities coming from other countries and cities where we don’t have dedicated resources yet, no matter if it is Lisbon, Milan, Krakow, Bucharest or any other European city.

Finding interesting startup is one thing, but since Verve Ventures is a network-based VC, you also need to develop the international investor base. How do you go about that?
As our experience from the French part of Switzerland and from France shows, local business angels will join Verve Ventures once we do attractive investments there. There is nothing that prevents people from, say, Stockholm, joining Verve Ventures today and investing in the best European high-tech startups. But usually investors start investing with us when they are motivated by local connections.

What is a typical constellation why someone from, say, Paris, invests in a startup from Paris via Verve Ventures?
They might be friends or colleagues with the entrepreneurs or one of the VCs involved and they choose Verve Ventures because they can invest a small sum. Or a financing round might simply not be open for private investors, which was the case for the rounds we did in Trusk and Zenpark. This is the advantage of Verve Ventures, that it gives you access to rounds which you couldn’t participate in, even as a local business angel. But our goal is not just to facilitate local investments, but to give investors an easy way to diversify internationally. This is something almost no business angel does, but it absolutely makes sense.

What about the Swiss investor base. Are they interested in international diversification?
Yes. In most cases, the investment volumes in international financing rounds are comparable to our average investment volume per deal in Switzerland of currently about CHF 1 million.

What about investors outside Switzerland, can they invest on the same terms as Swiss investors?
Yes, all of our investors have access to the same deal flow no matter where they live. Our digital approach makes it easy to invest even from remote locations, as long as you have an internet connection. When we will have built a truly pan-European investor base and a deal flow from all European countries, then the mission of Verve Ventures will be accomplished.

What do you mean by that?
If European investors are able to invest easily all over Europe in startups, this will make the venture capital sector on the continent stronger and more resilient. Our high-tech startups can compete with those from the US and Asia. But in the past, the really successful startups that needed large amounts of money had to fly to San Francisco or opt for an early exit. Often, this was much too early. They couldn’t realize their full potential and large corporations from the US bought cutting-edge technology for ridiculously small sums. Had the funding been available in Europe, these startups would have created tons of jobs in Europe.

How much do you have to explain this vision and Verve Ventures business model?
There isn’t any competition with the same business model. People usually compare Verve Ventures to the closest thing they know, for example, AngelList. Then I start to point out the differences. We do our own due diligence and we also take the lead in some financing rounds. And even though our investors can choose to invest on a case-by-case basis, we consistently do financing rounds of EUR 1 million or more. We can connect startups to quite a unique constellation of private, institutional and corporate investors. I think this is quite an achievement, and other people see this as well, but our mission of being the startup investment platform for all European investors is still much bigger than that.