The story behind our Lilium Aviation investment
How we financed and helped build the world’s first electric vertical take-off and landing jet
How I got into startup investments
I started my career in 1991 as a freelance software developer, creating a framework for publishing multimedia CD-ROMs. In 1998, I launched the German social network hallo.de. After this, a CMS with the unfortunate name, Loom, a router (hard and software), and many more failures and small successes. My first financially successful company was a SaaS photo service platform, which reached over 100M consumers. After selling this company, I stumbled into the investing business with my COO/CFO, Marc Sieberger, and CTO, Alex Koch. We wanted to support other founders and started investing our own money under the e42 brand, which we recently changed to Freigeist https://freigeist.com/
Our first era of investments
In our first 10 years, we focussed on software technology and apps like Wunderlist, myTaxi, kaufDA and Scanbot. While we will continue to make pure software investments, we felt like we needed to explore further areas of disruptive technologies. In the end, this was our core motivation when we started to invest: support outstanding founders and keep challenging ourselves.
Why we can make “crazy” investments
We invest our own money. That’s a big difference. We don’t have constraints on specific industry sectors, stages, ticket-sizes or generic investment hypotheses. Today, we are four partners at Freigeist: Marc Sieberger, Alex Koch, Christian Reber and myself. We are all deeply involved in the day to day operations of our startups. We are never coming from a pure market perspective. We rather focus on product, technology and design — and we must believe that the founders can deliver and stay with us through challenging times.
The Lilium investment
In a first step Alex gained a solid understanding of the technology and design of the jet. Then we had several meetings with the founder team, Daniel Wiegand, Matthias Meiner, Patrick Nathen and Sebastian Born. After intense discussions about why and how they wanted to build the first electric VTOL jet, we knew:
- Daniel had the perfect founder team for the mission
- Lilium would be an entirely new market and long term challenge for us
- Even if we wrote our biggest check ever, it would only last for 6–9 months
- There was a significant probability we would loose our money
On December 23rd 2015 we wrote an email to the Lilium founders starting with “The heart says YES - but the mind says NO!”
We openly explained what we could effectively support and where we would have to learn and grow with the founders along the way. And YES, we offered to join their bold mission!
The market view
After announcing our investment I received calls and emails from other investors and even friends asking if this was a joke or if I wanted to experience failure again. Some sent me articles about failed aircraft projects, while others (seriously) offered me a bed and food for a year.
The progress and achievements in aerodynamics, the propulsion, the power train, and aeroacoustics in the first couple of months after our seed investment went beyond our expectations. For example, the math behind the flight control was a very challenging area where the team amazed us with smart concepts. The result: the team developed and delivered a flying, half-scale prototype sooner than expected.
Serious funding and support
Most VCs have a clearly defined investment strategy and rules which their LPs expect them to follow. It’s often challenging to take on the technology- or product risk of seed stage companies. Fortunately, we have a few entrepreneurial VCs in Europe who invest in outstanding founders and new markets. Niklas Zennström trusted that we and the founders would deliver the Jet, and Atomico invested 10 million euros in 2016.
Today we are celebrating the successful flight of the world’s first electric VTOL jet, built in Germany.
Enjoy our brand new website: https://lilium.com