An important step in growing a business is getting an investment for your startup. So we had a chat on this topic with two great guys from eVenture Capital Partners, an Internet focused early stage venture capital firm, currently investing both in the North America and in Europe. We had the pleasure of talking to Christian Leybold, Partner at eVenture Capital Partners, and with Stephan Wirries, Summer Associate.

How to Web: Will you please shortly describe the process of placing an investment? Do start-ups usually reach out to you or do you also hear of interesting projects and make the first move?
Stephan Wirries: It happens both ways. While getting about 300 proposals monthly via E-Mail, we are also looking actively for “raw diamonds”. But there is a third way that is very recommendable: Often we receive introductions through our network. We appreciate it if someone takes the effort and comes to us through someone we know. Sure, it takes more time and effort but it can give the proposal a “social proof”. In the next step we schedule a call or first meeting with the founders. Later we present it in our weekly partner call, and maybe Christian should jump in here.
Christian Leybold: We always try to reach out to exciting startups. Sometimes it’s hard to identify the founders and we try things like looking up their domain “whois” entry to get in contact. But let me get back to our process. After discussing the business internally we meet again with the founders. One of the next steps is signing a term sheet that describes the basics of the deal. Then there is a due diligence, kicking the tires of the startup. We usually invest at an early stage, so it’s not the kind of due diligence you would expect from an M&A process with big corporations. If everything goes well and when the lawyers did their part: Welcome to the eVenture family!

How to Web: What do you look for in a start-up? Is it the idea, the business plan, maybe the founder’s profile?
Stephan Wirries: eVenture primary focus is early stage consumer Internet business models. The right mindset of the founders is so important.
Christian Leybold: Right, first we invest in people, second in market, and thirdly in business models. I think we generally require the right fit of founder, idea, and plan. Ideally the people are great, the plan is thought through and broken into clear steps, and the idea is groundbreaking or a proven model is applied to a new market. To be honest, this is not the norm. Finding a working business model often requires much iteration close to the customer. Our expectations generally depend on the development stage of the firm.

How to Web: How has your interaction with the Eastern-European market been so far? Does it feel different than the rest of Europe and the other markets?
Christian Leybold: We have been active with investments in Russia and the Ukraine since 2008. More recent investments include for example Sapato in Russia, an online shoe and fashion store. With no doubt there is a lot of talent and exciting market opportunities in the region.
Stephan Wirries: I actually think Eastern Europe is getting hot right now. There seems to be more and more coverage, many startups from the region at seed camp etc. But I’m probably biased – I am usually based in Vienna and feel like being a part of CEE anyway.

How to Web: What are some common mistakes entrepreneurs seeking investments should avoid?
Christian Leybold: Size matters when thinking about markets, but in Europe there is a strong segmentation. “We will capture Europe” is an ambitious statement. Make it believable. It is probably smart to first validate your business model in one economy and then scale it internationally. This is in line with our own strategy and international set up. We are glad to help entrepreneurs with global ambitions through our network.
Stephan Wirries: Try to get in contact with investors early on. eVenture is primarily investing in the founders, so it’s a great idea to get to know each other first. Also, we might not fall in love with the entrepreneur’s current idea, but the next one could be an awesome fit. It’s the same reason we like investing in serial entrepreneurs.

How to Web: Could you name a few of your favorite investments so far?
Christian Leybold: We have been investing in consumer Internet for about 15 years now and there have been a lot of exciting stories along the way. We backed many great entrepreneurs around the world and many of them are well known. It’s probably best to have a look at our portfolio on evcpartners.com.