Discover more from Data-driven VC
How to find new LP investors for your fund at scale (+ list of top 46 LPs in German VC funds)
DDVC #39: Where venture capital and data intersect. Every week.
👋 Hi, I’m Andre and welcome to my weekly newsletter, Data-driven VC. Every Thursday I cover hands-on insights into data-driven innovation in venture capital and connect the dots between the latest research, reviews of novel tools and datasets, deep dives into various VC tech stacks, interviews with experts, and the implications for all stakeholders. Follow along to understand how data-driven approaches change the game, why it matters, and what it means for you.
Current subscribers: 10,185, +176 since last week
Brought to you by Synaptic - The alternative data & intelligence platform for data-driven investors!
Synaptic is an indispensable tool for leading VCs, PEs, hedge funds, and sovereign funds to unlock the power of alternative data – like app downloads and website traffic, employee and hiring data, product reviews, open-source projects, and more. Our no-code platform unifies 100+ real-time performance metrics on companies around the globe layered with a rich analytics toolkit.
Learn how Synaptic can benefit your sourcing, tracking, and due diligence efforts!
Avid readers of this newsletter know that in the past I focused most of my attention on the sourcing, screening, and portfolio value creation parts of the value chain - just like most other Data-driven VCs out there (check out the “Data-driven VC Landscape 2023” report here to understand more about the leading firms and their focus). Yet, data-driven innovation does not stop here but gradually changes the remaining parts of the value chain too.
Today, I’m incredibly excited to have Arnas Bräutigam share how his team leverages public register entries to identify potential LP investors for fund managers. He does not only explain his approach in full detail but also reveals the final result, his secret list of the top 46 most active LPs in German VC funds.
Arnas is a co-founder of startupdetector (a data provider for the German startup and investor ecosystem) and AddedVal.io (a platform connecting 1,000+ business angels with suitable pre-seed / seed startups in Germany). Thank you for sharing your valuable insights below, Arnas! 🙏🏻
Raising a venture capital fund is hard. Well, not that I would know anything about it personally, having neither worked in VC let alone raised a fund myself. But at least, that’s what I hear a lot.
Before you finish your thought “Well, why is this guy then talking about fundraising for VCs?” - let me explain.
startupdetector is a specialist in German commercial register data. Initially, we only provided data on newly incorporated startups (hence the name), but later expanded into startup investors and very recently into fund investor data.
As part of this push, we identified more than 3,800 LPs from more than 320 German VC funds which we compiled into a top 46 list of the most active LPs in Germany (full list at the end of this article - but don’t scroll down, yet!).
In this guest post, I will reveal the exact process that we used for you to replicate and apply across public registers. Strap in.
Join 10,000+ thought leaders from VCs like a16z, Accel, Index, Sequoia, and more.
Two ways of leveraging commercial register data for VC fundraising
There are two distinct approaches for finding LPs for your fund through public data from the company register, direct and indirect.
1) Direct: “Stealing” LPs from your competitor funds
This approach is based on the assumption that anyone who invested in a VC fund, might do so again with your fund.
Thankfully, the German commercial register makes it easy to find out who those LPs are. This is because every LP in a German GmbH & Co. KG (the legal form of choice for German VCs) is meticulously listed there.
In order to find your future LP candidates, all you need is the name of the fund you want to “steal” them from. Let’s take “468 Capital GmbH & Co. KG” for example.
Step 1) Search for the fund’s exact name on www.handelsregister.de
Step 2) Click “CD” to download a PDF or “SI” for an XML file.
Voilà, you receive the full list of this fund’s 60+ LPs - ranging from individuals and angel holdings to German and international family offices.
Aiming for a comprehensive cross-fund list, we obviously did not want to manually copy & paste all the LP names from the PDFs. So we opted for automatically downloading the XML files with a script.
Next, we needed to know which VCs to actually look at. Searching our startupdetector database, we identified more than 320 German VCs that are structured as a GmbH & Co. KG - both current and older vintages - and fed them into our script. Even strictly adhering to the official download limit of max. 1 XML file per minute, this did not take very long (well, if you agree that <6 hours is not long).
The result? A list of slightly over 6,000 LP <> VC Fund tuples. Hereof, we did some extensive manual data cleaning. I will spare you the details. Suffice it to say that it is surprising, how in a system run by notaries and an official register, spelling mistakes/differences are still quite normal. So this step took a while and was not the most exciting task..
Based on the cleaned dataset of tuples, we created a pivot table to reveal which LPs are the most active ones in German VC funds. Hereof, we assembled the 46 LPs with 7 or more German fund investments (results at the end of the article below).
2) Indirect: Converting active angels into first-time LP investors
To my understanding, legally, LP investors in German VC funds have to commit at least € 200k. While it is possible to set up feeder Special Purpose Vehicles (SPVs) to pool multiple smaller investors into one entity, I’d like to start with individual angels that might be wealthy enough to consider fund investments as part of their investment strategy.
The assumption for this indirect approach is: Someone who directly invested in one or more startup(s) might be open to also investing in your new fund. Ideally, you would know in advance, if said investment(s) were in the 6-digit Euro range (or at least not much below) so you don’t waste time contacting the weaker leads.
With the assistance of our beloved commercial register, this is child’s play again. Let’s go through it step by step - starting with any recent BIG funding news in your favorite startup media outlet.
Download the startup’s latest shareholder list from the commercial register (as described in approach 1 above, but by following the “DK” link)
Identify the shares that were newly created by looking at the “changes” column.
Sum up these shares and calculate the price per share using the total amount raised from the press release.
Multiply the price per share with the number of shares of each new investor in the list (obviously ignoring other VCs, duh) to get their individual investment amounts.
Next, you need to decide which of these more or less affluent shareholders would be a good fit for your fund, look up their managing directors and reach out!
By the way, if this seems easy for one startup, but seems like a lot of work for all 2,100+ startups with funding rounds each year in Germany… well it kinda is.
Luckily for you, we have already done all that work. Not only for this year but for all fundings since mid-2019. And we’ve added regression-model derived € estimates for all those fundings, bridge rounds etc. that were not publicly disclosed (or too small to make it onto your news site).
We’ve thus compiled a database of all direct startup investors with € 200k+ tickets (or whatever other threshold you deem suitable) that looks like this when e.g. filtered for Family Offices:
Man, that was fun 😎 ! But let’s wrap this up now.
How can you not love the (German) commercial register?!
From seeing newly incorporated (stealth) startups and startups with first angel rounds for your deal flow to identifying high-value startups and fund investors for your own fundraising. Knowing your way around the (German) commercial register gives you a real edge as a VC. Especially since the register is open, free and it’s legally binding for every startup, fund, and investor to publish all their important documents there.
46 most active LPs (out of 3,800) in Germany
But now, finally, enjoy this list of the 46 most active LPs (out of 3,800) in Germany with their individual fund investments.
This is it for today. Hopefully, you found some value in this post and can use it as a blueprint to create your LP target list for your next fundraise. If you have equally insightful things to share with our community, feel free to reach out via email@example.com.
Thank you for reading. If you liked it, share it with your friends, colleagues, and everyone interested in data-driven innovation. Subscribe below and follow me on LinkedIn or Twitter to never miss data-driven VC updates again.
If you have any suggestions, want me to feature an article, research, your tech stack or list a job, hit me up! I would love to include it in my next edition😎