Visionaries Club is a Berlin-based early-stage VC fund, backed by leading European digital founders and family business entrepreneurs.
They recently raised 400 million Euros of fresh capital across 3 funds. A seed fund, a growth fund, and a science-driven focused fund.
They have an excellent track record, having previously invested in Personio, Miro, Choco, Xentral, TrueLayer, Pigment, just to name a few, and they invested alongside top-tier VCs such as Sequoia, Accel, Index, Lightspeed and Bessemer.
Previously, Sebastian was the co-founder and co-CEO of AMORELIE, which he exited to ProSiebenSat.1 Media in 2018.
During this episode, we discuss why Europe has to wake up to compete in the global arena, how he asses founders, and why it’s all about the people.
Please enjoy this excellent conversation with Sebastian Pollok founding Partner at Visionaries Club. Listen on your fav channels —> https://anchor.fm/ventureeurope
Sebastian, so happy to finally do this. Since we first spoke in March, you got married, raised a 400 million Euro fund, and hosted the Visionaries Unpluged with guests like Ursula von der Leyen, President of the European Commission, Danny from Index, Luciana from Sequoia, Harry Stebbings from 20 Minute VC. I mean, wow, what a year you had, and is not even over.
[00:02:04] Sebastian: That's true.
Thanks. I'm I'm super happy to be here. And yeah, some things that have happened over the course of the past months, but also years.
[00:02:12] Calin: And tell me how did you get Ursula to come to the event? I emailed her a couple of times, but I think she blocked me.
[00:02:18] Sebastian: I don't know what you emailed her. I think our request and our idea are exactly in line with her agenda since she is massively pushing tech investing and she's also pushing investing in green topics with the European green deal. So yeah, I think that all of that helped. And then there are also some network connections that helped.
Calin: For a very well functioning tech ecosystem in Europe, you also probably need the policy makers to be aligned in some of the conversations that happening. In your opinion, what do you think is missing from a policy standpoint of view?
[00:02:57] Sebastian: It's a good question. So I think that is, And now I'm thinking both in terms of domestic German, but definitely also the European level. I think, there is still room, lots of room for improvement when it comes to ESOP and, how do you. Make sure that there's actually no dry income problems arising for early employees who, where oftentimes there is a little bit of salary, but not a lot.
I think you're really trying to incentivize early employees of startups with something like a virtual share program. And in many countries within Europe there is still an issue where you are taxed, although there hasn't been an exit when you're granted those options.
So I think that's actually one major difference. For example, also to the US where Europe just needs to make sure that we're super competitive and ideally that we're also aligned on a national level within Europe. Second. There's always the talent question. How can we make sure that there is not just sufficient talent, but that, talent is really flocking to Europe, that it's not just expert talent, but also entrepreneurial talent.
People who wanna start companies. And I spent a bit of time in San Francisco and Silicon Valley from 2010 to 2012, and I think back. Most people, entrepreneurial talent actually moved to San Francisco. Me as a European, I'm actually very happy to see that over the course of the past years, there's lots of talent that actually because of too high costs and low salaries talent has also started coming to Europe, and I think we just need to see more of that and to frame it a bit more actively really, try to push for them to come here. Make legislation easy and give extra incentives for entrepreneurs to come to Europe.
[00:04:44] Calin: I totally agree and I think we, we have a very good case to make for Europe ; it’s a beautiful continent, you are one hour away from Schweinshaxe (pork knuckle traditional in Germany), one hour away from Amsterdam, one hour away from London. So it's just like you have all this diversity, in cultures, in food, in different scenes.
[00:05:05] Sebastian: It's amazing, you are within an hour of Easy jet flight, you can more or less get anywhere. Maybe you have to make it two hours or three, but it's crazy. It's such a cultural diversity and different modes of working and also different problems.
So I think it's great for funds too, to spend more time in Europe. So US and UK funds to spend more time in continental Europe and founders to also exploit those differences in a very positive way. And I think you can, as a B2C founder obviously that's more difficult as you have to cater to lots of different languages, which is a challenge but I think it's easier probably for B2B founders where we mainly invest with our B2B funds, where English is okay as a first language. But yeah, it's an amazing place.
[00:05:50] Calin: And for the Visionaries Unplugged the tagline is:
Why do you think Europe needs to wake up?
[00:06:02] Sebastian: If you look at the complete macro picture of how the world has and is developing, then there is a case to be made that it will be a bipolar world. On one hand the US and on the other hand, China and Europe risk being bit crushed in the middle.
And I think we need to make sure that there is a very, substantial economic, but also security power that is coming out of Europe. That there is actually a third player, Europe involved in that global chess play quote on quote.
[00:06:43] Calin: What do you think is missing?
[00:07:22] Sebastian: On the bright side, I think there has actually been lots of collaboration and also caused by the recent Ukraine crisis. I think there has been a much more unified push for a joint answer to this, both on the economic front, but also on the security / military front.
So I think within all that misery and this atrocity that's one thing that's been a positive take away from this. And I think that's one part of waking up to this new world reality and that this world reality may also compound itself in the future.
And you then also add China to the mix. So that, I think that's one part of waking up. So just being a lot more unified and a lot more together. On those different areas, be it the economic area, be it the political slash diplomatic area, be it the security area. And then, yeah, I think that's also the societal movement of feeling as a European and having that as a core part of our identity.
I think that's, I definitely feel like a European and I love it. We were joking let's go to the ATM and get some pessos. Oh, actually, no, we don't need to. And we can still use our phones and it doesn't cost you any extra. And it's just I think that it just amazing what we talked about a couple of minutes ago that everything is so enriched and it has that diversity and it's so much to learn and to gain from it.
That's why we said we do need to wake up on all different levels. And it's very important to bring all those stakeholders together and to develop a very positive vision of the future, which has the components of entrepreneurship and mutual respect.
On another dimension, we are all on this one planet together. And then it suddenly doesn't matter which, where a specific border is or which kind, which language you speak, but it only matters that we're on this planet together. And that there are big problems out there like climate and that we as humans actually need to find a joint reaction.
Within that reaction, Europe and the research and innovation capacities that we have and that a large part of our European industry is actual industry, lots of manufacturing, lots of construction lots of family business driven sectors and I think that's a great chance to be at the forefront of redesigning, rethinking, rebuilding those world's, largest industries and actually come out on top of it.
[00:09:39] Calin: Talking about just being on one planet. You mentioned during the launch of Visionaries to the Tomorrow Fund, so how did you structure the 400 million Euro fresh capital?
[00:09:51] Sebastian: So it's actually three funds. One seed fund and one early growth fund. With those, we invest primarily in B2B SaaS. So we're doubling down on that strategy and a large part of the Eur 400MM, Eur 350MM to be precise are going into those B2B SaaS funds. And then yeah, there's this 50 million very entrepreneurial Tomorrow Fund. And the Tomorrow Fund, which is also built on Visionaries Club base of amazing LPs or limited partners investors who are investing into visionaries.
In our case, they are not the large pension funds, large institutional funds, but these are just entrepreneurs. 40 plus unicorn founders, and then lots of family business owners. And with a Tomorrow Fund, we have the vision of investing in frontier tech. So really in science driven moonshot ideas that may cause actual breakthrough in the universe and changes the world. And especially looking at climate, looking at pollution, looking at health crises looking at the future of food, future of material. How do we actually build things? How do we Manufacture things? How's our transportation in the future gonna look like?
These are the topics that the Tomorrow fund will focus on, and it's focused on it in a way that pretty much always takes the view of our, let's say, not even children, but maybe even grandchildren, and is trying to look back at today from a hundred years into the future. So trying to identify those technologies, like what the steam engine did to the industrial revolution. Becouse in 1800 it essentially caused the industrial revolution. Or when you take a look at Thomas Edison with the first light bulb and we are still using light bulbs today, or Karl Benz in 1885 with the first car.
When you take a look around, cars are still driving, they look a bit different, but technical innovations and breakthroughs cause big paradigm shifts and they change how people live, how they move, how they transport, how they transact, how they manufacture, et cetera.
And with the Tomorrow Fund, we really believe that we need those breakthrough technologies to completely redesign the largest industries in the world to pretty much react to the big challenges that we see around us.
[00:12:20] Calin: Usually when you try to look so far into the future, let's say 100 years, it's just very hard to use any type of mental models because it's just very hard to predict. What are the exercises that you do to try to predict this?
[00:12:44] Sebastian: So it is definitely lots of science fiction. It's lots of imagining, not what the work would look like in three years on five years, but how it is gonna look like in say, 50 years or a hundred years, and what the components are that you need for that.
And then specifically looking for them, it is lots of cutting-edge research. So being very very close to research institutions, universities and having a foot on the ground there and helping them with their greatest problems, which are actually going from invention to innovation, to actual commercial breakthrough and then global rollout.
And in most cases, the problems they lie both on the scientific end, but they also lie very much on the commercial end. Then partnering with LPs or fund investors at Visionaries, that's exactly where they spend all their time thinking about and have been, many of those companies hundreds of years old and have amazing knowledge about their specific domain areas. At the same time, they're looking for those type of solutions. And there we bridge the gap. This is where we come in with visionaries and the Tomorrow Fund trying to actually solve those problems on both sides, both on the founder's side, looking for those commercial partners and also on the side of our fund investors looking for the next breakthrough technologies that they can benefit.
[00:14:11] Calin: Got it. And going a bit more granular, how do you assess teams? You started your VC career more than 10 years ago. How did your assessment of teams changed?
[00:14:41] Sebastian: it's always evolving , so that's one. it has changed and it keeps on changing. it also changes because of mistakes that you make. And we regularly, every quarter, and we do our we do a team offsite and we always review the decisions that we made and not just the good ones.
I think we spend less time on the good ones, but even more time on the decisions where we, from what it looks like may have been a wrong decision. Obviously, we still don't know at this point in time. But we definitely review that and we try to derive our learnings from it. And I think one learning, just to give you an example, is in the beginning we tried to have a perfect score, we always called it like a 10 out of 10 for both team, but also market and product and everything, and realizing that, this is a very rare case and it might not actually be the optimal case because there's always stuff changing and you don't know how product and the market is evolving.
So we are actually, by now, we are not just looking for best possible team with the best possible idea within the best possible market, but we're also looking for a subset of that like a great team with Okay-Ish idea, but in a market that we like and which is big enough. And then also great market, great idea with a less experienced team.
[00:16:02] Calin: So you give like a weighted average across let's say, team market, timing, product?
[00:16:08] Sebastian: So the weighted average doesn't really help us. We need, in some of those dimensions to see alpha, we need to see an absolute up performance potential, and we need to be jumping up and downand sleepless at night.
And ideally it's about most of those dimensions, but even if it's a subset of those dimensions and the rest is also good enough then we'll go for it.
[00:16:32] Calin: So what are usually the characteristics of a team when you see Alpha and do you have a favorite question that's usually asked to try to determine that?
[00:16:40] Sebastian: I wish it was as simple as that, but it's a long process. It's us spending lots of time. Together with the teams, it's less of a pitch, a one-sided pitch, but it's more of a conversation, a long multi-part conversation where we essentially try to distill what other hypotheses that the team, but also ourselves have for this upcoming round that we would wanna lead.
And we talk to many customers, potential customers within the LP base. And outside of it, we do many personal references. Ultimately we just try to spend lots of time together. And then I think at some point you have a feeling that you have no questions left. There are no questions left on either side. You have a feeling you know all about each other, and this goes in both directions. And you've gotten to a very granular level on the product side. And we've listened to our fund investors from those specific industry domains, speaking with the founders, and we've collected learnings from that.
Then internally one of us needs to be a hard yes. It could be different opinions within the team, but we need one person to be Yes. So we need one person to be jumping up and down and it could be a very contrarian decision within the team.
So we purposely said we wanna be contrarian. We need to be as a venture capital fund, we don't want a perfect agreement on all decisions, but looking for high conviction.
[00:18:30] Calin: Got it. so let's change gears a bit and let's get personal. I was wondering what was the most challenging period in your career, and how did you overcame it?
[00:18:57] Sebastian: Starting out in San Francisco without knowing a single person getting off the plane, not having gone to Stanford University, Stanford elementary 🙂, I don't know if that exists, Stanford kindergarten, whatever. I think that was definitely a challenge.
But I just jumped right in and it's actually, it is something that I love to do. Just getting to know people and I actually, I started from the ground up and I've just worked my way through, through the different networks and at some point yeah, I think I, I had a very good grasp of what was going on and saw amazing deals like Pinterest at series A or Instagram in the very early days.
And then fast forward a couple of years to then in 2012 I knew I wanted to start something. I'd gone back from Silicon Valley to Berlin, wanted to start something, didn't know exactly what I wanted to start, and then had a very miserable, a very depressing time, actually nine months of looking for ideas, trying out ideas and failing over and over again in generating an idea that, that actually stuck with me and that passed my test.
That was also very tough. I think that the solution was to just actually keep with it and don't stop and actually giving myself a deadline of, okay, I'll just be doing this for 12 months. I won't take a job, I won't earn any money for the next 12 months, and either it has worked out until then, or I can go back being an employed person again, but I didn't want to, I was hoping, I would manage. And then I think out of those 12 months, it took me nine and then, I was there with the idea together with Leah. Maybe if you look at it from the outside, it looks good, but if you zoom in, then its this crazy up and down right that everybody who is an entrepreneur knows and which is completely normal and it will keep on happening.
I think as long as the slope at some point points in the right direction then you're good.
Calin: And what is a person that had an impact on your life?
Sebastian: Going back to the early days, I think childhood is actually, it is a very important time, for most people and my dad and my mom, they got divorced when I was 12 and I grew up with my mom and my sister, and that was actually, it was a super great time for me because I learned so much from those two.
How to talk about your feelings very openly and be very cognizant of your feelings and be very people driven, people first, and very curious. I think those are some things that I learned in a very elementary way. And I would say that still to this day, just taking a look at those two role models when it comes to those dimensions is just amazing and helped me.
[00:21:13] Calin: If Sebastian from now would meet Sebastian from 10 years ago, what would you tell him?
[00:21:47] Sebastian: Good question. “Keep on being yourself” I think that's actually most important. Define success by your own rules. It's something I read somewhere and I love it because I think that's the ultimate key, not just to happiness, but also to success actually. if you just do the things that, that make you happy and that where you feel, Okay, this is my personal success definition. And I think the rest will come. And that's definitely one of my key learnings.
And the other one is ultimately it's all about the people. So I would always tell my back-then self to surround himself with the coolest, most, most knowledgeable people where you feel like the dumbest kid in the room.
I think that's the right company. And just, people who give you energy and who don't drain energy. I think that those are some things. When you boil it down to the very fundamentals of your life and when you take a look back at it many decades from now, then I think it will be around the things that you do and why you do them.
And if they speak to your core purpose and if they make you happy. And on the other hand, it will be around the people that surround you.