Angel investing insights with Eva Spannagl, co-founder & Managing Director of Climatos | E296

0:00Welcome to the Super Angel Podcast. we're super excited to have you all with us and especially excited to have Eva joining us on the podcast today thank you so much for the invitation delighted to be here today is this a dream? no it's not a dream, I'm an angel why would God send me an angel? because God knows that everyone needs a little coaching now and then I'm loving angels I saw an angel all angels say for a long day When you say it's me an angel The smile on her face Be in it to get back the door Me angel Thanks for an angel, girl

0:45Yeah, thanks for joining us, Eva. I must say that you're one of the most high-energy people I know, so I'm excited to dive in. Let's get started. I mean, do you want to share your story with the listeners and what got you into angel investing in the first place? I actually started my career in consulting, quite boring. So I spent a few years at McKinsey in tech, really liked it, learned a lot. But honestly, from day one, I recognized that this is probably not going to be the place where I'm going to be forever. Because I learned that I'm a builder. I love building things. I want to see the outcome.

1:17I really love to work with people building something. And then you should definitely not be at McKinsey. so I left the company after a few years to join back then very early stage Moss a fintech from Berlin which some of you might know and I was very lucky because I was there one of the first ones responsible for the commercial areas sales partnerships customer success internationalization and more and I remember back then it was really crazy we were like pre-seed seat literally like a few people in a room building the product. We were every Friday still celebrating our customers. So today, this is very different as we're now a Series B.

2:01But I was very lucky to build the company together with the founders from Precise to Series B. And at some point, I decided to leave because I wanted to build something new. I started Klimatos together with a very good friend of mine just a few months ago and maybe just to yeah say quickly climatos is basically building an energy provider solar energy provider for urban tenants and apartment owners so we are selling high quality mini solar panel kits batteries we have a climate os energy management app and more and long term we aim to be the partner of choice for every european citizen out there on their renewables journey.

2:44And yeah, so currently I'm a full-time founder, I always say, and on the side angel investor. And I started angel investing about three years ago. In the beginning, I did my own tickets. I'm happy to also explain a little bit more in depth how I did that and then joined the Sequoia Scout program a few months ago. And yeah, we love doing it. that's cool I mean do you remember your first foray there what got you there I mean was there was it completely organic did you wake up one day and be like oh my friends are angel investing that's cool was it just 2021 or 20 and that was the thing to do I mean no not at all um I reflected on that also recently how I became actually an angel and to be honest in the beginning the topic was quite far away from me a few years ago because I think I had this like typical stereotype thinking on angel investing so I thought I had to be a founder to be an angel investor firstly secondly I thought that I need to have a lot of money to actually do it and honestly I also just didn't know that many other angels I was also saying like role models that I could look up to and thought I can also be an angel investor.

4:00But then at some point, I remember when I was at Moss, I kind of had more and more advisory call with startups and helped them along their journey. And when I then kind of was close already to the startups and the pivotal moment for me was I saw or read an article where it said that only 11 % of angel investors in Europe are female, I honestly thought, oh my God, I need to change this. Yeah. Because this is just unacceptable for me. And Anthony, you know me exactly. I'm really an activist. So I want to change things. And then I decided, okay, I'm going to be an angel investor. And I remember that I literally told my boyfriend back then, I was like, okay, I'm going to be an angel investor.

4:45And six weeks afterwards, I already did my first investment. It's a quite funny story. Also happy to share how that happened and I started with doing very small tickets so I started with doing 5k angel tickets and now I'm doing a little bit bigger ones but I started with literally my savings so I looked into my bank accounts and I was okay this is the money that I have on my bank account that I've saved how much of this money am I willing to never see again and this is how I how I started my first angel investor investment, became an angel investor. And yeah, today, here we are now in the Sequoia's Gold Program and the rest is history.

5:30And we're going to dive in deeper into kind of your strategy and the portfolio and all of that with Tom in a second. Just before that, maybe if you wanted to talk about a memorable deal, a memorable or two that you would like to share with the listeners. So my first deal was definitely one of the most memorable ones. It was special in that way that I had no clue, but I wanted to pretend that I know a lot because I was afraid that the founder is going to find out and it's going to be, that's my first investment. And so it was a lot of fun because I committed due to that also super, super early.

6:05So finally, I was actually the first angel to commit. And because I thought, oh, I really want to be on this deal. So I'm just committing now. and the founder I think was also overwhelmed and so he was like oh Eva that's really cool that you were on board and so yeah that's definitely was very memorable to me because as I said I didn't want to show off as an experience so um yeah I kind of like backed it off but it worked quite well and yeah I'm very still very happy with this company and very happy that I'm an angel in there so this was definitely my most memorable deal. I love that kind of you know you recapping going from big company to scale up company now now obviously founding your own business it sounds like on that journey you've got so much out of those different moves um what what would you say from angel investing what has angel investing specifically given you you mentioned there about you know leading the charge on more like diversity around cap tables i'd love to like dig into what you've got kind of more personally out of i guess angel investing as you start on that journey On the professional side, I would say that I'm learning really every day to become a better investor.

7:13And believe me, I'm still at the very beginning, also in comparison to the two of you. I'm learning every day, but it's my goal that I really want to become a great investor. And professionally, it has given me this opportunity to learn from people like you every day on how you look onto deals, what views, your insights. So this is professionally what I'm enjoying a lot. And personally, it really feeds my curiosity. So I would say that definitely curiosity is something that describes me best. And it feels great to give something back. I love working with the founders super early on, share with them some of my insights from Moss, also from my founder journey to make them intros to other agencies and more.

8:03And honestly, I also just really love seeing other people succeed. So that's also why I'm always running around. And yeah, I always say I'm the biggest cheerleader for my portfolio company. So when I'm somewhere and I see kind of a synergy or something that I can help my portfolio companies with, I do it. And the biggest cheerleaders, I help them also if it's not going well. and this is what gives me professionally and personally a lot. Perfect. That makes it ton of sense to make it see everyone who I'm sure you're investing in getting a massive amount of value out of that from the founder side.

8:45Oh, no. Not about the thesis. Whoa!

8:53That was the sound of the investment thesis segment. So we're going to move into talking about your investment thesis, the strategy the approach that you have to investing i'd love to just you know i think we've touched upon it a little bit and heard from you know some of your early investments and some stories there but i'd love to just kind of like take a step back and expand a little bit on you know where you are today in terms of like you know the number of investments you've made you know maybe pick out a couple of portfolio companies what countries you've even invested in so just so that the listeners can have a bit of a an overview of where you are in your angel investing journey so far you've been so currently i've done a little bit like more than 10 investments and currently they're all over europe but i plan to do another five to six investments uh in this year so anyone out there uh yeah ping me so just to share a few deals that i've done last year um i've invested for example in cardino in december really great company in the inductive vehicle market uh rionic together with point nine deploy big shout out there by the way to the team from deploy because they've just raised two weeks ago an amazing rod from atomico so you're doing a great job out there um yeah so these are some of the deals that i've done last year overall i invest mostly pre-seed and seed in fintech sustainability b2b sass and honestly in everything we're I believe I'm a good angel for and I can be helpful.

10:29So this is also something on, let's say, like investment thesis or strategy. I really only invest in companies where I can bring value because otherwise I tell the founders, I'm just not a good angel for you. I know other angels who are great for you, who will bring you more value on the cap table than I do. But overall, I would say I'm still at the beginning of investing. to just a few years in and many more to come. And many co-investments to come, you mean. This is very self-serving of me, but I would love that. So, you know, you're just about to, like you said, increase the amounts of investments you're making, right?

11:07And I think something that, you know, speaks a lot to some of the other angel investors we've talked with and is a question I always have is, you know, how do you think about that kind of dilemma between kind of portfolio diversification versus kind of like having capacity to support the founders, right? Like you're a founder by day or full time and you're an angel part-time or by night. And so how do you think about that trade-off, if at all? That's a tricky one, Anthony. I don't try to think about that too much, to be honest, because honestly, you're totally right. My 100 % job, I already say, is already being a founder 150 and then I'm mostly doing angel stuff on the weekend.

11:49I think I don't think about it too much. I just do it very naturally, as I told you, right? I'm already supporting my portfolio companies on the go with stuff that I see or interests that I do very naturally. So it's not like I have to think on the weekend, oh, now I'm spending one hour on this company or one hour on this company. So it's something that I really love doing and that's why I do it naturally. And currently I am still in this position that I've only done a little bit more than 10 investments. It's not like I have 80 and could basically only do portfolio work the whole day. So how I think about it is that I invest in companies where I believe in, where I really love working with the founders.

12:33And yeah, I will see probably also in the next year's then if it takes too much time, if I reduce the number of investments I do or find maybe, I don't know, someone supporting me or something like that. um so uh yeah but long story short currently i don't try to think too much about it um i i do it naturally and i really love it yeah and i would argue by the way that you know it's so much more the kind of value proposition you offer and the value you can bring than the quantity right it's the quality and so like you know by being a founder having had like the whole journey of almost like a founder from d0 at moss and what you're doing now with climate os whether it's a fintech company a climate company or any company like there's so many horizontal things you can bring right i mean there's a lot of investors have never been operators and founders and you know they might have many hours a day to support and they will i'm sure with many things but then maybe you bring something very complementary to the table right um which i think that's what matters mainly yeah and maybe adding to that i always tell my founders hey i know how you feel i'm a founder i know it's very bumpy so you can be very honest with me you can be rather be honest with me, then I can help you.

13:44You don't have to tell me everything is great. Let her tell me what's not working. And then I know that this is normal and I'm going to help you. So you're totally right. I know both sides and I'm trying to empathize a lot with them and telling them that they can be honest with me and I know their position as well. Yeah, I think that's a really powerful kind of approach to have and to be able to build that bond really, really quickly. When I guess taking, looking a bit more kind of when you're making that evaluation on which founders to potentially partner with are there you know specific or like one element that you must see or is there anything which also for you is is a bit of a flag when you're when you're evaluating companies at the kind of team stage something i look for is a lot is drive and coachability um for me a founder really needs to show me that she or he wants to achieve this and this is their number one goal and whatever it takes they're gonna they're gonna get there and then I want to see that they are coachable right so when I tell them hey think about this think about this um that they are coachable and try to take the feedback seriously um so this is something that I I would I'm really looking into and maybe if I'm talking about that I would say that also So humbleness is something that I look for a lot because I know that it's very important to be humble in a founder life because, yeah, you get a lot of shit as well.

15:11And so you need to be humble on that side. What is the flag for me? Maybe then also on the other side is definitely if someone is arrogant, if someone is not treating people well, if I do a reference call. and then someone is saying, I don't know, this person is treating interns badly. Sorry, that's for me like a red flag because, as I said, you need to be humble. You need to really think that this is one team and your intern is adding a lot of value also early on in the startup. So if someone is arrogant or not down to earth, then this is definitely a red flag for me. No, it makes a ton of sense and couldn't agree more.

15:55I think it's sometimes from my own experience, sometimes it's hard to get to get that kind of data point every single time from those early conversations. So, as you said, if you can speak to people they've worked with, if you can try and like reference or even, you know, find someone from your network that knows them well, then you can start to get those kind of data points because I couldn't agree more. you know this is such it's such a long journey the journey they're going to go on that obviously you know exceptionally well having been on that scale up and having been on now your own kind of journey that you need to be humble you need to be able to kind of like you know ride with the punches as they say because it's it's not all going to be up into the right um maybe and i know you touched on that a bit on the previous section but like some passion areas i mean maybe even going more detailed into things that you recently have seen or things that you're particularly passionate about these days that you'd want to kind of discuss a bit more about?

16:50The first one is definitely anything around climate tech, energy, heat. I mean, it's just crazy what is going on out there. If we are thinking about what will climate change lead to and how we can also fight against this. And looking into the numbers and the predictions, we now still have the opportunity to fight against it. This was definitely also one of the reasons why I founded an energy company, even though I was not in the space before, really. But I was like, I really want to do something against it. Because if I don't, I'm going to wake up one day and think like, Eva, why did you do not nothing?

17:30Like, why did you, what happened? So this is something, firstly, I'm looking a lot into and also, as I said, already invested in a few companies in that way. Secondly, I still am in big love with FinTech. I think, Anthony, you can relate to that. I really love FinTech. Probably it's also because I spent a few years in a FinTech company and it's just so, so amazing how complex it is, how many things you can do. And to any founder out there, FinTech is still super hot. if anybody tells you it's not I thought there are so many things that are still to be solved and what we will see in the future and thirdly I still believe into B2B SaaS a lot because especially in the SMB sector I have actually some friends also here in Germany now working in SMB's companies and if you look deeper into it how unorganized, how under-digitized it is, I still believe that B2B SaaS, there is still a lot more to come.

18:35And I find it's still very interesting as well. Amazing. No, I couldn't agree more. Definitely lots of crossover with, I think, how we're investing at Seacamp. And I know how obviously Anthony's investing as well. So I'm sure many opportunities to continue to co-invest in the future. On that kind of theme, it would be great to just learn a little bit about how you think about collaborating with VCs. Also, you know, the angel community that you've built up and the network that you've started to really lean on. It would be great for the listeners or people who are curious about getting into angel investing, how you've gone about building those networks.

19:10There are definitely different views on that. I know some angels who work very independent. There are angels who work very close to VCs. I strongly believe everybody needs to find his own, let's say, approach to this. For me, I really enjoy working with VCs, with micro VCs, big VCs, angels, etc. Because I strongly believe in the power of collaboration. I like sharing deals, exchanging knowledge, exchanging thoughts. So I often invest along VCs. And I like this because I always see this, as I said, as a synergy. So we see a bunch of money, me rather bringing like smaller money, but smart money.

19:57And I just believe in the synergy between the two of them but I would say I'm not an angel who's just jumping on the train because a top tier VC invests yeah just sharing that I think and this is also something that we see from time to time and no I'm I'm talking to the founders I want to understand what they do as I said I want to understand can I bring value on the table and honestly I've passed deals from top VCs, even so it could have been an easy way to get in because I am always listening to my gut feeling. And if my gut feeling tells me this is not the team where I can bring the most value, then I just don't do it no matter which VC is investing.

20:39To build on that also from a micro fund perspective, if I may to bring that perspective, it's a hard thing sometimes, but you got to develop your own conviction, right? It's hard to say X, Y, Z top tier fund is going to invest in that, but I'm not sure I want to. And sometimes it just doesn't play into your model, right? Maybe they have a higher kind of, you know, binary risk perspective. A good example is like social networks. I don't know if I will ever invest in social networks. I mean, me specifically, I invest in fintech, but on average social networks, you see kind of some sort of crowding effect for the best of talent for something which is a flip of a coin on average, right?

21:17And a lot of the multistage funds or even other funds that have been very active in the space and rightly so might want to put bets there. But I think the type of risk is very different. I just wanted to kind of like express some of the dilemmas we've had also in the past with Kukawa as well on how to think about this. and how important it is to work very closely with those funds, factor in the fact that a fund that you work with and you respect is investing in that company because it does influence success in some respects, but it is a factor, a parameter to the conviction building, right? And in the end, you're kind of optimizing for your own model, your own angel investing approach and the likes.

21:57Anyways, let's go into the next section. You're out here learning more about them angels, are you?

22:09So if you heard that sound, we've just got into the core learning segment. Let's dive in. So if you had to share three core learnings, Eva, from your time Angel Investing, of course, what would those be? The first learning is definitely that the team, the drive, the attitude, the humbleness, as I said, the performance level is the most, most, most critical factor for the startups. success. I've learned it in the past. Honestly, when I invested in a team where I was not 100 % sure, also I can see now that the company is actually not performing that well. And why is that? I strongly believe that great people are going to do great things.

22:54So also when they see that their business is not working, they're going to pivot, they're going to iterate because the people are great so they don't want to spend time on something that doesn't add value so this is something that i see in my portfolio that i see also in other other companies and this is why now i believe even more than i did in the beginning when i talk to pre-cc founders i look a lot into yeah their drive also how they approach problems how reflective they are on on how they work on their team on their company um this is something i i really really look into um i mean this is probably like what i've heard also from other angels a lot but the more i'm now into the game since a few years i believe in this more and more and more and this is also why maybe as a tip for someone outside um in angel investing or starting to angel invest i'm now even sometimes following people early on supporting them early on even if they don't have an idea yet or i still an ideation that I always support them because I just believe that this team, this great person is going to do something great afterwards.

24:04This is my first learning. My second one is a hard one. I decided also to share a hard one. That honestly, angel investing or the investment is very illiquid. If you have a return, the if is important to stress out here, it will mostly come after five to ten years. And this is something that I have underestimated, just sharing very honestly here in the beginning, because I started angel investing in this super hype time, right? So 2021, you even as an angel could maybe already say at the series A, oh, I want to now sell my shares. These times have changed for real. Now it takes much more time raising a series A, raising a series B, and also the valuations have changed.

24:56So now it's also not the time anymore where you as an angel super quickly after one half years already, basically jump ship and take your first share sale and end it. So this is something that I also often tell people who ask me, hey, should I become an angel investor? I have this amount of money. What should I do with it? Then I tell them it's very illiquid. You need to be OK with that slog for a few years and also might never come back. I mean, you need to do at least as an angel, definitely 15 to 20 investments that you make money with that and not just end up with a zero. So this is also a big learning that I had.

25:36And the third big learning, I already touched on that quickly, is really trust your gut feeling in angel investing because it's usually quite right. so in the beginning I looked much more into macroeconomic views and the idea can it be big how much big is the market and stuff like that yes this is this is important and but in the end of the day honestly when I'm in a call with a founder and yes then the idea has to be also fit for sure but when I have a good gut feeling or even a really really really good gut feeling and then usually the performance is also very well. And yeah, honestly, the companies where I didn't have a good gut feeling, I'm also now a little bit more worried about.

26:26So also as a tip for everyone out there, I have the feeling that usually gut feeling is something that can be really listened to. Just to kind of follow up on the team one, which I think is 100 % aligned with often how I think in early stage investing, it's so, so important in those ideas of like drive, kind of attitude, like performance level. When you're meeting founders, how do you test for that? I mean, are there questions you ask? Are there things that you have learned over those 10 or so investments where you can now more confidently go in and have a way of getting that information back, which gives you the idea that you're going to move forward?

27:01So two things I do here. Firstly, I really try to get to know the founders in a more personal way and also try to understand what they've done before and what they've learned with that from that so I also asked them hey what was their big fuck up maybe in your like previous uh job and how did you deal with it or also when they're a little bit more advanced already see it I asked them hey what were your biggest challenges um that you had in the last 12 to 18 months um and how did you deal with that because I really try to understand how do they deal with pressure how do they deal with stress um are they adaptable um and things like this so i really tried to rather focus on what has not worked well and how did you how did you deal with it because and this is super super important and on that one i also really yeah i really try to look into yeah their personality and understand um how as i said how humble they are and also how they treat the team.

28:02I would say definitely looking into the fuck-ups and I love asking the founders at the end of the call, hey, okay, now we've talked about your idea, now we've talked about your vision, but what do you believe are going to be the biggest challenges in the next 12 months? And then you can see who is honest enough and telling you what's really difficult and And who is also reflective enough in saying, look, okay, this is really, really difficult, but I believe I can solve it like that. I really like when people are honest or when founders are honest on that and tell me what's going on versus just saying super high level, super fluffy.

28:43I don't know. There is obviously competition. Yeah, obviously there's competition. But we need to understand that they know their problems, that they know their challenges and know how to tackle this. So basically know their challenges as well. So this is firstly something that I do a lot. And secondly, I'm a big fan of reference calls just because I believe it's important to understand also from maybe an author or someone else perspective on how has this person behaved in their previous company overall. what maybe hasn't. I also like to talk to interns a lot because it's just interesting sometimes to hear from like people who are not there for longer understand how did it work.

29:31So overall I just like reference calls the second point of view. I really like what you said about the you know what are your biggest challenges. I think that what I've found is with that you can very quickly reveal whether there's you know they can remove their facade like are we really having okay yeah we had the great pitch we had the great questions and answers let's go like a layer deeper now right and the more manufactured the answer the more they're either like not the type of a character you want to bet or maybe for some reason they still have that facade and so I really try to kind of break that facade to go a bit deeper to go into kind of okay this journey is going to be full of challenges so let's really talk about like how we go through that so that really resonates needed in some ways.

30:15And we just want to pitch in with that. Great. So Yvette, we'd love to end each of these episodes with a bit of a kind of quick fire round.

30:30Quick answer questions around 30 to 60 seconds each. How does that sound? Sounds great. First question coming up. What is the most counterintuitive thing you've learned since you've started angel investing? Honest truth. that the information transparency is usually quite low between angels. Everybody says that all angels are talking to each other, but no. And honestly, from a founder perspective, I think this is great because sometimes it's also good if you don't know all the challenges and people don't interchange between or exchange with each other too much. So I believe, as I said, that the transparency is not that high and it's good for the founders.