Nicolas Gabrysch of Osborne Clarke talked about his thoughts and his rich experience regarding the "Myths of Venture Capital" in last week’s MAN 632 Advanced Entrepreneurship lecture. We were extremely happy to have him here.
Nicolas nicely integrated the audience into his talk by asking for a general opinion on VC trends and mechanics. It became obvious that the lecturer’s findings based on many years of experience were surprising to a majority of attendants: For example, the fact that the average return on investment of a VC amounts to only 1% was quite unexpected. Most of the students anticipated values of around 5% and more, as there is the myth that VCs generate high returns, which turned out to be quite overestimated regarding the German market.
Other myths Mr. Gabrysch addressed were the presumption that successful start-ups have to be in the valley or (in case of Germany) in Berlin, and that it costs less to build a small high-tech company. Both of these myths turned out to be wrong. First of all the founding location of a venture is not a prerequisite to get started successfully as many famous examples like tumblr or Groupon show. There is, however, a large probability that entrepreneurial companies end up in these hot spots as this specific location enhances the possibility for networking with likely-minded people and identifying opportunities. Regarding the costs to found a business, Mr. Gabrysch outlined that start-ups usually need a large amount of funding at the beginning and many additional funding rounds in order to grow appropriately. For example, in the case of Facebook, > 2.34 billion Euros were invested.
The lecture offered a great opportunity for discussing the different probing hypotheses and enabled students to link the content of the MAN 632 lectures to his experience from accompanying about 50 deals a year. Especially the issue whether the idea or the execution of the idea matters more for the performance of a start-up was a highly debated topic.
We thank Mr. Gabrysch for sharing highly intriguing and surprising insights and taking so much time to support us. This guest lecture was an ideal addition to the lectures of the course and also attracted many guests beyond MAN632 being interested in entrepreneurship. What is more, Nicolas provided two of our Student Startups, Sponsorun and KLM Mobile Solutions, with dedicated individual advice subsequent to the lecture.
Osborne Clarke has, among other influential startups such as DailyDeal and lieferando.de, also worked with the Mannheim Startups simfy and Stocard. Osborne Clarke is an international law firm that employs over 550 lawyers that are working in 13 offices in the UK, Germany, Italy, Spain and North America. To obtain further information, please refer to:
http://www.osborneclarke.co.uk/about-us/osborne-clarke-at-a-glance.aspx
