Interview with Alexander Stoeckel

We continue our “International Spotlight” series with Switzerland, where we have interviewed Alexander Stoeckel, who is also an accredited faculty member at the Business Angel Institute.

First, please tell us a little bit about yourself so that our readers get to know you better.

My name is Alexander Stoeckel and I am one of the Partners at b-to-v Partners AG, a Swiss-based venture capital firm that works very closely with a dedicated network of private investors, the b-to-v Circle of Investors.

At b-to-v, entrepreneurs invest privately in companies of other entrepreneurs. That is our mission, our philosophy, and the basis of our investment strategy. Each b-to-v member pays an annual membership fee to get access to b-to-v’s investor network, to see b-to-v’s deal-flow of about 2’000 investment opportunities per year, and to invest alongside other entrepreneurs/members. Each of our members has an entrepreneurial background and career, and therefore each member brings an unique set of management experiences, industry know-how, business acumen, and contacts to the table. Our job at b-to-v is to make these incredibly valuable qualities of the individual investors accessible for all our portfolio companies, our members and our funds.

How well are business angels organized in Switzerland (clubs/networks etc.)?

I think that there are two answers to this question. The first and more general answer is that business angels in Switzerland are well organized. We have several professional and semi-professional business angel organizations in Switzerland. And from what I can see and what I hear in the market, all of them are doing a good job. They have different strategies, preferences, and structures, and they certainly offer different services to their members. But most of them have been active in the market for more than five years – in other words, they are much more stable than most business angel networks in other European countries.

The second answer is that Switzerland is trying to do more in the sector of early-stage financing of companies. Various national organizations are actively and constantly trying to further improve the availability of financial resources for young companies and entrepreneurs. To foster business angel activities is one part of this ongoing effort. b-to-v contributes to this strategy and hosts training events for business angels in Switzerland, in which we explain our investment process. The idea behind these events is to inform people about the opportunities and risks of venture capital investments, and to speak very openly about our experiences, challenges we had to face in former investments, various types of risks that are related to early-stage investments, and learnings from such challenges. Furthermore, we demonstrate how we analyze investment opportunities, how we structure investment terms and conditions, and how we support portfolio companies after the initial investment.

Do individual business angels tend to behave differently in Switzerland than elsewhere?

No, I don’t think so. Generally speaking, there is no such thing as an “average business angel”, is there? Hence, there is no such thing as “average behavior” or “deviations from such behavior”. I do believe, however, that business angel investments have certain characteristics in common. (1) Many business angels prefer to invest in companies in their region because they prefer to be able to meet with the team from time to time without much effort. (2) Many business angels prefer to invest in industries or businesses to which they can relate, e.g. based on their own professional career. (3) Many business angels are ready to take much higher investment risks than, say, venture capitalists. (4) Many business angels do not base their investment decisions just on facts, but also on their personal gut feeling.

Which kind of training for business angels do you have in Switzerland?

I am not sure that I know about all available business angel trainings. There is an event called  Angel Day which is hosted and supported by a number of Swiss business angel organizations. And there is our own b-to-v Private Investment Academy.

What would be your most important advice for future business angels?

I think that a business angel – prior to the first investment! – should define his or her own investment strategy. One aspect of that strategy is to think about quantitative aspects, i.e. what is the total capital that I would like to invest, what will be my investment per deal, what is my capital reserve per deal for follow-on investments, how many deals can I manage and how many deals can I finance. The second aspect concerns qualitative aspects, i.e. what are the characteristics of a suitable investment for me, e.g. in terms of phase, capital need, region, industry, product, service, valuation, form of investment etc. Moreover, I think that a business angel should familiarize himself with the general mechanics of venture capital investments / direct investments in companies, i.e. where to get access to relevant deal-flow of investment opportunities, how to screen, analyze, and select investment opportunities, how to structure investments (e.g. due diligence, term sheet), and how to manage portfolio companies in different stages.

UPDATE: Globaltechbox did a great interview with Alexander Stoeckel, offering some new insights.

#83: Digging into Venture Capital and b-to-v Investing with Al…

Welcome to the latest #StartupShow – Episode No.83!GlobalTechBox visited btov Partners offices in St. Gallen, where we had the pleasure of interviewing Alexander Stoeckel, who is a Partner there. Stoeckel has an MBA from the University of Oxford and previous experience in the world of banking and consulting. Today, he is responsible for the business angel network at b-to-v, which consists of about 220 members.btov Partners was founded back in 2000 by Universität St.Gallen (HSG) alumni who saw the potential behind connecting talented students with successful entrepreneurs and businessmen. Seventeen years later, b-to-v is developing investment solutions for private, corporate and institutional investors, with about 3.000 investment opportunities per year!“The interesting thing about venture capital is that you get to work with intelligent and driven people every day”Stoeckel shares with us eight significant aspects of the startups that b-to-v evaluates and a lot more. We discussed topics that will be gripping for both entrepreneurs and investors!Website: the video!

Posted by Global Tech Box – Startups, Tech & Innovation on Sunday, July 30, 2017

“Talk to as many angels as possible before you start investing!”

While the European Business Angel Ecosystem is yet to mature, it is already well established in North America. In our interview, Marianne Hudson, Executive Director of the Angel Capital Association, explains differences and similiarities in the angel ecosystem in Europe an North America.
First, please tell us a little bit about yourself so that our readers get to know you better.
I have led the Angel Capital Association, the professional association of angel investors in North America, for six years and helped in its startup before then. ACA has 200 member angel groups, which is about 8,500 check-writing business angels.  I’m based in the Kansas City, Missouri area – right in the middle of the United States – because our angel education and research work got its start from the Ewing Marion Kauffman Foundation, a philanthropic foundation in Kansas City and I wanted to stay here.  I am an angel investor myself and belong to two angel groups in Kansas City (both ACA members, of course).  It has been great fun to work with angels here and other parts of the world. While no two think the same way, I find they really want to share their experiences and ideas with each other, and are just a lot of fun.

How well are business angels organized in North America?

It’s interesting.  ACA has about 375 American angel groups in our database, which may be the most of any country in the world.  However, about five percent of all American angels belong to angel groups.  Instead they invest individually or through informal groups of friends.  I believe the groups are very important as the hubs of deal flow in their communities, often connecting with other smart investors in their social networks.  They also syndicate with “unaffiliated” angels, family offices, VCs, and other private equity investors.

Many American and Canadian angel groups are very active and sophisticated, and importantly they have become very good at co-investing with each other in order to provide the amount of capital that innovative entrepreneurs need while diversifying their investments.  About 70 percent of these groups are networks, in which each investor decides whether they want to invest in a particular company.  Another 22 percent are funds, where members pool their capital up front and then take a majority vote on investment opportunities, and the remainder are networks with sidecar funds, kind of a cross between networks and funds.  In North America, all angel group members must meet specific requirements for wealth or income because of our securities regulations, and many groups set guidelines for total investment and participation in the group, such as serving on a due diligence team.

Do individual business angels tend to behave differently in North America than elsewhere?

That’s a good question, and I don’t completely know the answer.  From the people I’ve met, I would say there are often similarities in how angel investors throughout the world make investment decisions.  It may be that North Americans are not quite as conservative or risk averse as investors in other continents, but I always need to point out that much of America is very different than Silicon Valley or Boston – there is plenty of fear of failure in large parts of the US and Canada.  Another difference might be that American angels are more privately based than many other countries, meaning that there is less connection to government support programs and policies.

In the US and other countries that have been involved in formal angel investing for a longer period, there is likely a larger percentage of the business angel community focused on what happens after an investment is made.  How do we as angels make sure the entrepreneurial company successfully grows and exits?  There is considerable focus on mentoring, being a good board member, connecting companies to follow-on investors and partners, and helping portfolio companies through the corporate acquisition process.  This is good for the entrepreneur and the investor.

What kind of training for business angels do you have in North America?

ACA’s education and research partner, the Angel Resource Institute, is a global leader in educating angel investors, entrepreneurs, and other key parts of the startup support community.  ARI conducts 60 to 70 in-person seminars and workshops every year, mostly in the US but increasingly in other countries.  The focus is on practical best practices in angel investment, from thinking through portfolio strategies, to finding deals, screening and due diligence, term sheets, valuation, and supporting the companies post-investment.  ARI also has courses on how to start an angel group, trends and statistics in raising equity capital, and pitching to investors.  ACA supports these workshops with two professional development conferences each year – 660 investors attended our 2013 ACA Summit in April.

These one-day or half-day courses are a great way to build investment skills and activity.  Many long-time angels have said they wished they had taken the seminars earlier, as it would have saved them lots of money they lost.  We know, however, that many angels need shorter, on-going training via the Internet or through monthly angel group meetings.  So ACA, ARI, and other organizations put on Webinars and provide quick background for quick education sessions.

What would be your most important advice for future business angels?

There are so many things, but I think it is important to talk to as many angels as possible before you start investing and read up on best practices and experiences of good angel investors.  This can help you set expectations, understand some basic terminology and practices, and help begin your personal strategy for angel investment.  It may also help you understand the value of angel groups and getting some education in the practice of angel investment.