Why I invested in Doctorly

As a venture capitalist, it's my job to identify and invest in the most promising startups. Then at some point, they raise a huge follow-on round and all of a sudden all the blog posts pop up everywhere on “Why we invested in…” Too often, I find myself reading these posts that simply state the obvious: the market is big, the founder is great, the timing is right…

While these kinds of posts might be helpful for some for their social marketing reach, they do little to explain the process that goes into investing in the earliest stages. So if you are a founder who is interested in why someone gets funding and someone else doesn’t, read on.

When it comes to investing in startups in the early stage, it is generally believed, that there are only two approaches: The first is to invest in a company that has already shown some degree of success, we call that “traction”. These companies typically have a product on the market, might generate some recurring revenue, operate in a more or less defined market, and have a strong executive team in place. The second approach is to invest at the beginning - before there's anything there except for a founder (team). Everything else is “in-between” those two cases, the question is only what amount of “traction” is enough for you. Simple, right?

Investing at the beginning, I call that “super-early-stage” is, however, more difficult. And not for everyone. You need three things to make it happen:

• Access - to (the best) deals that normally aren’t on deal room, crunchbase or pitchbook
• Insights - about the market and the founder and
• Courage - to invest when there is little to no traction

Ahh, wait a moment, one more crucial ingredient is missing:

the power to follow your intuition

Most VCs - I truly believe that - try to follow their intuition. But it is impossible if your partners don’t believe in you / your gut feeling. If you have to pitch an investment at the “deal meeting”, to your partners or investment committee members, it is very difficult to get a YES if the startup is at the beginning. It is so much easier to get a YES if the startup has already enough (!) traction. A decision on numbers, revenue and users is much easier than a decision based on the “gut feeling” of someone else.

In my career, I've often found myself trying to back founders at the earliest stages but wasn’t always successful. Today, I'm so excited to be able to share one of these success stories: Doctorly just announced its Series A. Why I invested in Samir and Niklas? Because of my intuition. In fact, I did so twice. Once with my previous firm (Speedinvest) and then again with Calm/Storm. My first attempt, however, nearly failed. The deal got rejected first, but then, thankfully, Oliver overruled the decision and I was allowed to do the investment.

I want to stress one thing: This happens to every VC out there, every single day. It’s simply part of our job. It happened to me several times. Another example? I’m happy to share that my proposed investment in Resourcify got rejected, the group couldn't follow my gut feeling at a stage where there was not much more to follow than my gut feeling. I’m super happy, however, that Garry got a lot (!) of funding from this group a few years later.

Both, Samir and Garry were extraordinary founders when I first met them. If you think you are like them, have a big idea and you're looking for investment, don't get discouraged if you get rejected. Just because one firm doesn't invest, doesn’t mean there is no potential in you and your idea. It simply means that someone in a meeting did not trust someone else's gut feeling.

And if you're a VC who's looking to invest in startups in what I call the “super-early-stage”, don't be afraid to trust your intuition. It's often those gut feelings from the first meetings that lead to the biggest successes.