Navigating the Storms - Sailing to Success

Every year, for 2 or 3 days after Christmas Eve, I try to disengage from the world as much as possible. No computer, no reading emails, not even answering messages on my phone - a "digital detox" as some call it. I focus on my family, take walks through the city, and, of course, have time to reflect on the past year. Currently, sipping on tea in one of my favorite coffee shops in Vienna, I'm content to scribble down my thoughts, writing in my little book while observing the world through the window.

I am filled with gratitude for the unwavering support and resilience that has defined our journey at Calm/Storm Ventures. In a world that has turned upside down several times due to unforeseen challenges, the strength of our team and portfolio founders has shone through.

Navigating Uncharted Waters

The past year has been a testament to the resilience of our founders. Like skilled sailors at sea, they have weathered unexpected storms, reducing burn rates, extending runways, and tirelessly pursuing growth. In the face of canceled meetings, postponed funding rounds, ghosting, and rejection, as well as the impact of conflicts in Ukraine and the Middle East, our entrepreneurs have displayed commendable resolve.

The Super Early Stage: Where Skill Meets Challenge

Just as winds can change direction suddenly on a lake, the Super Early Stage of venture capital presents unexpected gusts and challenges. "A smooth sea never made a skilled sailor," and our founders are demonstrating their resilience, determination, and strength of character. While not every portfolio company will navigate these waters unscathed, I know that we have invested in sailors who don't easily abandon ship. Calm/Storm made 17 new investments in 2023, reaching a portfolio size of 75 companies. We invested in "superstar" founders (the ones that built the fastest unicorn ever) as well as the "unknown" founder who previously headed the AI engineering department of one of the most prominent companies in our space.

Who's Going To Win?

Honestly, we don't know. How could we? But we strongly believe that the next superstar founder could be from anywhere, especially from Europe. While most of our portfolio companies are located either in the German-speaking world or the UK, an increasing number are coming from everywhere else—from Bulgaria to Canada, from Norway to Brazil. We also believe that the next superstar founder-team might look different from the ones at Google or Facebook. That's why half of our portfolio companies have diverse founder teams, and 30% of our CEOs do not identify as male. Also, the Calm/Storm team reflects the diversity of talent rather than the history of Venture Capital. We don't talk about diversity. We don't have to. We are a diverse team at every level of the company, including the two managing directors.

#1 Investor in HealthTech: A Milestone in Turbulent Times

In the face of adversity, we have not only weathered the storm but emerged again as the #1 Investor in HealthTech in Europe. During the last year, we successfully executed 22 follow-on transactions, and numerous co-investment transactions for our investors. We supported our portfolio founders with expertise and additional finances. While we observed nearly all founders struggling to receive further funding, some have built exceptional, fiercely competitive rounds to the extent that we could not invest” in our own portfolio companies, even if we wanted to.

2023 was truly a turbulent year: LindusHealth.com, GetNelly.de, or ProbablyGenetic.com raised “Series-A” rounds that others dream of building for their “Series-B”. Others like 9am.health, SecondNature.io, or ThinkSono.com used the time (and their already deep pockets) to build enormously strong business cases. And then some silently raised multi-million follow-on rounds like Doctorly.de, Qunomedical.com, or Inne.com, to boost their growth despite the current market conditions.

What's News at Calm/Storm Ventures?

After we closed fund one exactly a year ago, we celebrated the successful "First Closing" of our second fund generation in 2023. We are truly grateful for the support of our investors, many of them have been believing in us from day one. Some of the biggest investors even doubled down on us, increasing their commitment in the second fund.? I’m especially grateful to be able to continue what I love doing in times when others can't even start a fund. Calm/Storm remains actively engaged in fundraising for the Second (final) Closing. We’d extend a warm welcome to potential investors interested in joining our journey!

This past year has been an extraordinary journey, and I am immensely grateful for the exceptional performance and dedication of our team. Each member has played a pivotal role in our success.

I want to express my heartfelt gratitude to each team member for their hard work and tireless efforts, long nights, and canceled dates just to make sure another deal gets signed in time. Together, we have surpassed expectations. It's a testament to the power of collective strength and determination.

A special acknowledgment goes to my co-managing director, Stephanie, whose collaboration is less visible but invaluable. Stephanie's complementary skills, moral support in tough times, and dedication to delivering only high-quality work have made her the perfect partner in steering our ship through both calm and stormy waters. Without her, this journey would not have been as successful and much less fun.

Looking to the Horizon: What Will 2024 Look Like?

Our strategy will stay the same: we'll invest in the best storytellers, fundraisers, big-company builders, and purpose-driven believers. We'll invest in those founders who want to change our lives and health for the better.

And the Venture Capital market? Just as crossing the Atlantic can't be accomplished in a day, the "rebound" won’t come in a week or two. But Venture Capital always came back. I believe we'll see IPOs in the second half of 2024, and with them, we’ll see pre-IPO activity in the private sector. This will come down to earlier stages until it will also hit our space: the super early stage. It's not a question of if it will happen but only when it will happen. We are prepared. We have deep pockets to double down when the opportunities jump in front of us. We are committed to the long-term journey because we have set sail not for the quick win. We want our founders to arrive at the other side of the Ocean not just the first port around the corner. We'll sail our course with determination, gratitude, and an unwavering focus on our core thesis: founders supporting founders.

Happy New Year 2024

Lucanus Polagnoli & the Calm/Storm Team

PS: some personal stats (according to Vimcal):

Meetings: 2.271 (thereof 1.363 on Zoom and 253 in person, the rest on Teams, Google Meet, and other tools)

Hours spent in meetings: 3.053 h

The busiest month: March (might be a co-incidence with our fundraising efforts)

The quietest month: July (two weeks on Island Elba with my kids)

People met: 2.341 (once or several times, online and offline)

Flights: I should count them but knowing it would hurt too much