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Klaus Hommels

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2024-11-27
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2024-11-27
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  1. “The same for basically every category. So there is a huge shift and the Ministry of Defense need to see where do I allocate. And deep tech can make a big difference in these kind of mechanics. And so that's why we are very committed at NATO level to investing technologies and enhance the defense capacity of the NATO member states.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Look, so there's a variety of things here. So, first of all, I would not necessarily categorize it as defense investing. At the end, it is all deep tech and one customer emerges, and that are the MODs. There's a very good reason for that because suddenly you are forced to think a little bit more about the technical sovereignty, about a capacity to defend yourself. And the limitations are in the classical equipment, you cannot build it or buy it so quickly because there are limitations in that. And secondly, the efficiency works on the different technology versus established equipment is very, very different. You have a thousand euro drone that takes us a 10 million tank. You have a 500,000 submarine unmanned, which can take out a 500 million submarine, the classical one.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “I don't know if I should pride myself for that, but at least I am regularly asking my very understanding investment advisory boards to be a little bit more generous on these rules. So I do believe that if you see the right company, you should take a lot of risk and overproportional risk in those.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “It is a mean to an end. You have to build portfolios in order to get money from institutional investors. But on the way there, you make a lot of concessions. So you have to think about how much do I reserve per company? Am I at some point shot out? Or can I reuse proceeds to get to a pretty high investment grade? Because if you do three times the money, but if you have 100 minus 20% over 10 years management fee, that's 80 times three, it's 240. But if you have a 100% investment grade because you can use proceeds, then it's three times is 300. So you see this has nothing to do with any company that's just trying to please the framework around the rules of deployment, so to say. I think this is something we need to obey to because we do need this money, but this is for me something that has nothing to do with investing. So, and if you find the cool companies.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “No, I don't. It's not it is. It will become anyways. So my famous quote always is when Uber started in San Francisco people said, but the taxi market is only 250 million. And today Uber's revenue in San Francisco is 600 million. So, and if you do the math on defense, which we can do a little bit later, you will see.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “No, so it's always better if we have it, but it will come back at some point. And good companies are always worth something and there are always a lot of people be willing to engage with them. There's always an exit market for them. I'm relaxed because at the end everything burns down to the qualities of the assets. And then you mitigate a lot of these risks.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “I think he has said no, but there's still a luxury problem because we're coming from a world where the life insurers are discussing that they could not even provide the 2-3% minimum yield for the pensioners. So, I mean, even if you're a mediocre fund and do 2x, this is on a logarithmic scale in a different orbit to what we currently have”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Being unlocked from the pension schemes would solve the entire problem of financing innovation. And the best, you would solve two problems and nobody had to pay for that. Except one politician needed to tackle this problem and they all are very afraid to touch anything that has to do with retirement.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “It's not that the risk has risen, it is that also the return has overproportionally risen. And if you think about it in a different way, if you forced, I'm very careful with the word forced, you have to force pension funds to do it. Because then A, you would get a way higher return, which makes a huge difference for the pension on the buying power a pensioner has. So, for example, if you have a normal worker that pays in a thousand euro a month at the age of 20, 20 something, and when he here is 64 with a German pension fund here, 750,000 bucks in an American one, 3.5 million, just because of compounding of higher yielding assets. So meaning, we all say we have problems with the retirement system. So this is a very easy fix. We are just in two conservative asset classes. But at the same time, this money...”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Yes, we should. So there was an attempt, but it was blocked by politicians. It's still a little bit like a regional egoism, so which is part of the problem. So the second one is we do not have deep capital pools. So, I mean, when you think about a huge step was in 1974 when you had the Erisa Act, so that pension funds in the US were to invest in inventure funds. So, and this made a big difference. And we don't do this in Europe. So I think the most pension funds invest according to the endowment model in the US, meaning you get basically a venture allocation of 10 to 13% plus. And the European pension funds invest 0.02% in venture. First of all, it's already shocking because the numbers in the US”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “First of all, we do suffer the different aspects of the heterogeneity of our continent. So there is no point in having a three-stock exchanges, because at the end liquidity is everything and we should basically say.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “400,000 euros just for the photo, and what we did, we did a CGI of the interior of the Deutsche Berse and put it on a tapestry in our office, and then we stood there, had our own ball and rang it, and it looked 100% authentically, but we did really not pay one to pay the 400,000 bucks. And I spoke to the Deutsche Bell. I said, guys, you can find to have a business model. So it's also fine to take a certain margin over the lifetime of a quotation, but don't tax people at the highest emotional moment when they are so proud to go to the stock exchange. So this is what I mean with culture.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “You can answer it in a little broader scope. How much is especially continental Europe the financial illiteracy a problem? So basically you see that politicians, you see it in a lot of instances, we are not thinking how the same way what can you do with money that the US does it? And also my weirdest moment, it's a funny anecdote also, is when we had the spec and we listed it in Frankfurt. And then we were speaking, I was speaking to the CEO of Frankfurt Stock Exchange, who said, look, this is cool. Can we have this photo? Because the founders are really, really proud and this is the culmination of their journey so far. He said, yeah, yeah, we can do that, but there's a price list for that. And I said, what do you mean there's a price list? We are doing sort of an advertisement that this IPO is happening at the Frankfurt Stock Exchange. He said, no, no, no, the price list is...”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Found us so that, and I thought lengthly about the fact why is that? Because we had the Copic nations where the Zamba brothers So, and if you see the first German value added tax declaration that you need to do as an entrepreneur that can be pretty intimidating, so basically I even have sympathy for that. So this has thankfully all changed. If you now look at ETH or the Technical University Munich or the KTH in Stockholm, the quality of the founders is very, very different. You barely have any copycats anymore. You really have genuine technological innovation and ideas.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “Yeah, look, that's not how I look at it. So this is what you're describing is a cyclical element to it. And there is no doubt that we do need to finance innovation. And there will always be phases of more liquidity, of exuberated pricing, and the pendulum always swings between the left and the right. If you think about the fact that from a start where we accompany a company until we exit, it is easy eight to ten years if you really want to make sure you get all the value creation. All of the phenomenons that you would be describing will happen at least once. In the lifetime of that company. So this is something where I'm not concerned. Structurally, there is a lot of science that the world has changed a lot. If you think about early 2010s, there were no technical”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Look at the earlier stages, that doesn't work. So, if you discuss with banks, this is a Rajah, there are complex discussion always there. So I think they have not been trained and experienced in this kind of financing. And the banking side is the wrong one, but we should get our equations straight, meaning we cannot expect to create wealth in the way we have created if we are underfinancing the reasons why we created that wealth by factor eight. So this will probably not work.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “It's pretty simple. For me, the progress of a society is the way how they can handle risk. And entire Europe has had societal and economical progress, especially in the 50s, 60s, and 70s. And we were basically very good at financing innovation, at the magnitude of 4% of GDP. So the banks financed it because they were in a regulatory framework where they were allowed to do these kind of investments. And the innovation at that time was Bosch, Siemens, Porsche, you name it. So today the regulation has changed. Banks do not finance innovation and startups anymore. And today the only regulator compliant way of financing innovation is venture. And in Europe we are at 0.5% of GDP. So we are underfinancing innovation by factor eight in comparison to The levels that made us well see in the 50s 60 70s.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “There are several questions. So, if you have a certain mission and the mission requires you to be a little bit more outspoken or to reach a broader audience, then I think this is a perfect methodology to do this. Because you cannot achieve that aim in a different way. But what you are alluding to and what I'm despising is the self-promotion stuff. So thinking, oh, look, I'm a cool entrepreneur. And for them, entrepreneur means sitting in Sohouse in Berlin with an avocado toast and a cappuccino and thinking we rule the world. And then just in the afternoon thinking of some random entrepreneur say, hey, great, thankful to be part of the journey. So this is something where I say, look, geez, there's so much more urgent things to do for VC than doing those kind of things.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “So, first of all, I do not get involved in a lot of companies. And I'm totally fine if a founder rejects it for some reason because there's young, in most cases young, and there are a lot of new things coming to him at the same time. And it's very difficult to get them into a certain chronology. At the end, I might have also made a bad job in promoting what I can contribute. So on the flip side, for me, there's way more satisfying to see that those top entrepreneurs that I've backed, I've always, when they did the second business, I was always allowed to be one of the leading investors, be it with the sum up, I was always with Nico or with other businesses.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “Good question. I don't know. It is always very different. So, what I really, really despise is vanity. So there is a high correlation between people that pose a lot or treat a lot or whatever. Using social media a lot and efficiency. Always being, I think this for VCs similar than for entrepreneurs themselves. But it's implicit sometimes. So it's also mistakes aren't bad by design. You just need to understand and find a rule that you can avoid the same mistakes. So if I wasn't set up to have certain mistakes, I would also not get into the companies that finally make it.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “Because that's what venture is. Venture is not sitting in a nice office with borrowed power of LPs and playing like in old Caesar's times, thumbs up, thumbs down. So no, I think the entrepreneur is the star because he has a single asset risk and he is super passionate for one idea and for with this idea, advancing society. And I'm just a feature to increase the odds that he succeeds”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “Well, not sure. So I think there's a difference between a lot of different genre of investors. So there are people that have a lot of money that if they have successes and think there's a momentum mark, they pour a lot of money in the market, but for very different reasons. I'm always intrigued by the technology or by the founder. And this doesn't scale with money so much.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “Well, yes, I think that was the other purpose. Of course, I lost the money afterwards. And that was probably her real mission with it, so that you lose the money and make the lessons when you don't have a lot of money. Because when you're young and lose a little bit, which is still everything you have, is as painful as if you lose a lot when you are older. So this has been a very, very thoughtful lesson for me. So I had a rule for long that when I had an exceptional hit, I would stop investing for three months because success makes you fear that you can walk over water. And you needed to force yourself to have this humbling moments to say, oh no, no, no, no, that was luck, keep cool and don't make silly mistakes now.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “So she obviously was delighted also for the wrong reason, so to say. I still did a banking apprenticeship so that she probably disliked, but she thankfully lived long enough to be able to see how part of the story develops.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “Thought I go to the local saving and loan bank, get a bad stock recommendation, lose the money, and I'm mad at the bank. As it turns out, my affinity to for football was that they played in Puma shoes and Puma did the IPO and I said, look, Grandma takes the losses so I can go in fully leveraged. And at the time I was making $10 pocket money a month, I made $100,000 with Puma in three months. So I said, look, two phone calls, 100 years of pocket money. I become an investor. So, and at that moment, the sale was set for what I wanted to be in the future.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “Well, so you obviously did your homework. This is a very crucial question. So, not in terms of the sport shoes, obviously. And as a Swiss German, I should say that is on, but as a life lesson. Puma made a very big impact. And I guess the you always have like two or three of those in your life. And Puma was the halo moment for me. So as you know, I grew up in the German countryside, hence my crazy accent here. It was close to Menching Gladbach, and I was the son of a farmer. So at 16, 17, 18, I knew a lot about how to work in the fields and do all this nasty work that nobody ever wants to do in that age. But I was lucky that my grandma wanted me to hate banks. And the way she thought about it was, look, I give you 20,000 bucks and you buy stocks. If you gain something, it's yours. If you lose it, I cover it.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “Thank you very much. It's a pleasure. After that long years, the wait was worth it because you have become an icon. So now I'm the underdog here.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source

  28. “Venture is not sitting in a nice office with borrowed power of LPs and playing like in old Caesar's times, thumbs up, thumbs down. I'm not so keen of building portfolios. If I find cool companies that make a difference, that is where the beef is. If you have one or two of them, every portfolio looks great. I do believe that if you see the right company, you should take a lot of risk and overproportional risk in those.”

    2024-11-27 · The Twenty Minute VC · 20VC: Why Price Sensitivity is BS | Why "Portfolios" are Merely a Construct to Make LPs Happy | Why the Best Investment Never Happen in "Fundraising Rounds" | What Europe Needs to do to Become a Superpower Again | Klaus Hommels, Lakestar · IDENTIFIED FROM THE TRANSCRIPT · source