HV: our commitment to Seed Funding
Reworked seed program is fast, simple and founder friendly — from €100k
The early stages of a startup can be a difficult and stressful time for founders. Securing investment is often one of the most challenging parts. At my first company, Hitmeister, we were regularly just weeks away from insolvency.
This week, HV Holtzbrinck Ventures announced a newly restructured seed program that will give entrepreneurs fast and flexible access to between €100,000 to €500,000 to start their companies and bring ideas to life.
HV has a long history of doing seed investments. The first investment in Zalando was just €250,000 (that worked out nicely). More recently HV funded Michael Brehm’s new venture, i2x, just on the basis of a vision. Or take Upvest, our first foray into the wonderful world of crypto, which was (literally) three guys in an attic above the Factory in Berlin.
In the past, HV’s seed program has never been codified and rules were applied ad-hoc. In the new, more formalized, structure, the seed program will become an integral part of HV’s investment strategy. It will allow the HV team to discover exciting projects in the early stages of development. We sense a growing opportunity to back inspirational projects from day one and provide support to early stage entrepreneurs. As part of the program, funds have been allocated to support about 10 seed investment rounds every year.
What is new about the investment framework:
- HV has developed a legally-compliant SAFE (Simple Agreement for Future Equity) structure for Germany. This is a legal form already common in the US (e.g. YCombinator uses it) — I haven’t seen it being used in Germany yet! It effectively reduces the paperwork around a financing round to 2 pages. In most cases it completely removing the need for lawyers and notaries! This means more of the round goes towards building the business. Equity and convertible debt deals are of course also still possible, if desired.
- HV doesn’t need to lead these rounds (something we normally like doing). This means we are open to being part of an already setup financing round, adopting other parties’ terms etc.
- As well as being simple, seed investments need to be really fast. We pride ourselves on our execution speed. The HV commitment: the time frame from first meeting to receiving the investment funds should be below four weeks. Not more than two weeks for reaching a decision after meeting the founder, and a further two weeks for the money to arrive (obviously depending on the legal structure used). The founder should be able to start putting that money to use fast.
Angels and smaller VC funds have always been excellent partners for HV. Not only as a source of new deals, but also for the value-add they can bring to help companies develop. One of the goals of our seed program is to provide a tool for us to work together with our partners even earlier. For example an angel could use our seed program to “top up” an existing round they are leading, bringing HV’s portfolio, network and experience into the mix. We are always happy to talk!
The Seed Program is part of the current Fund VII, which has a volume of €306m. HV has a wide focus, with investments all across Internet, Mobile, Software, Health, Finance and Digital Media.
To discuss your seed idea with us please send an email to businessplan@hvventures.com. Or get a qualified introduction (always better).
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