Getting access to the best deal
I was recently asked by one of my colleagues how to institutionalize dealflow sourcing. I’ve been thinking about this over the last couple of days. In my opinion there is no one way of doing deal sourcing but there are some things that you need to do in a systematic way.
Spending over a decade in Venture I’ve only been part of a couple of investments that has not come from direct network. Let me try to give an example of how this process could look like.
“I met a guy let us for convenience call him Henrik in the beginning of 2017 as I was part of raising a Nordic VC Fund. Henrik is a Danish serial entrepreneur and business angel. I say that I met Henrik in 2017, I actually had met him many years earlier as he was involved in a portfolio company that was a part of a Fund I worked for in 2010. I had not heard from Henrik for many years but in the beginning of 2018 when I started at Maersk Growth there was another touchpoint. I received a message from Henrik saying that he had met an entrepreneur from Berlin that did something within food logistics that could be of interest to me. While scouting through logistics companies in Berlin I also ran into a founder which I’ve been in good dialogue since. We had some good and deep talks about logistics. As part of what I do I of course asked him if he new other start-ups that I should speak to. This question also led to an introduction to the same food logistics company. I now had two touch-points on the same company wherefore my interest increased even more”.
The above is the story of how I got to know Flavio, the CEO of fliit the E2E food logitistics company in Berlin.
The learning from the short story above is that sourcing is about networking. It’s about getting to know people and spend time with them and pay it forward. You always have to be nice and don’t expect to get anything back.
If I then hang on to the story about how Henrik let me to Flavio, then that connection and relationship let to another deal in the trade finance space. I’m responsible for our Berlin ecosystem activities and I spend a good three days meeting VCs and start-ups in early 2019. During those days I planned to invite some of the business angels. Flavio was so kind to make introductions to some business angels and many more. I decided to host a small dinner while inviting some of the people that I thought could help me to understand the Berlin ecosystem. Following the intro to the business angels I further down the line met with Nelson Holtzner, the CEO of MODIFI, our first Maersk Growth investment in the Trade finance space.
Other good skills that you need to acquire as an investor is public speaking and writing. Those two skills are something that will expose you to people you currently do not know, that in the long run will give you access to a new network and hopefully new deals. But remember to pay it forward, do favors for others. They come back tenfold, and you learn at the same time.
The above-mentioned skills are related to individual characteristics. Something you can learn but for me it comes from the eagerness and interest in what the future can become. But it cannot be done without some structure. You need to make sure that you expose yourself to the right environment with-in the desired community. At Maersk Growth we invest in Smart Logistics and the Future of Trade which covers different areas, but it is my primary sourcing background. With those themes I can structure my search for relevant co-investors in the market as well as companies. From this I can make a rough list of where to search for the next deal.
IT also plays a significant part of this exercise. You need software to store and captured information in a structured approach. Saving your contact details is one of the more tedious things that you need to do but it is very important. I’ve worked with Affinity, eFront, Salesforce but I’m still looking for the right software to assist me. The all have positives and downfalls.
The above covers some of the things that I’ve found as a solution and an approach that works for me as an investor.
I’m glad to pay-it forward and is always looking for the next deal, so please reach out if you have a great start-up where Maersk Growth could make a difference.
