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Over the past 10 years we have learned a lot about early stage investing, both good and bad. That's how we have learned to become better partners for our entrepreneurs, teams, as well as for our colleagues.
Stonefund has been around since 2000. Since then we have learned a lot about investing in early stage companies. In the early days our focus was very broad, in terms of:
- Sector (medtech, ICT, Energy & Environment, traditional sector);
- Geography (Benelux vers wider European Region versus North-America);
- Stage of maturity (seed versus expansion stage);
- Involvement (passive versus active investor or sole versus co-investor);
- Exits (bad versus happy)
In 2004 we listed all our lessons learnt and evaluated ourselves, and questioned ourselves on who we like to as an investor in order to be meaningful as a partner for entrepreneurs. Some key lessons learnt:
- Sector: Energy & Environment. From all sectors addressed before, only the Energy & Environment related deals really stole the hearts of our investors.
- Focus leads to specialisation, which in turn leads to better investment selection, as well as increased knowledge or added value for our investment companies.
- Geography: despite the attractiveness of certain businesses overseas, or the fun we had while working together with certain teams, availability is key when you really want to understand one's business challenges, and more importantly to understand the DNA of a team.
- Stage: we have learned that we're no experts in R&D oriented organisations. We love to get involved when the first pilot is ready, and the team needs to be geared up for commercialisation. That's our sweetspot where we can make a difference.
- Involvement: we like syndicates with a limited group of complementary investors, but we are not afraid of being alone. Indeed, given our more industrial backgrounds we prefer to have a more active role rather than playing the silent financial shareholder.
- Exit: It's not a mechanical process to it. Who the target should or has to be is something we don't really focus on. The only element we have in our power is to keep the entrepreneur and his management team motivated to help us exit. This provides a breeding ground for a sustainable and in the end profitable growth strategy.
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