Arno Held on investing in AM start-ups from Scandinavia

Arno Held on investing in AM start-ups

AM Ventures Holding GmbH (AMV) is an independent, strategic investor based in Munich, Germany. The company has established an ecosystem consisting of sustainable strategic investments and a strong partner network to utilize additive manufacturing technologies for serial production.

Initially established with support from additive manufacturing market leader EOS, AMV has a portfolio of investments focused on disruptive technologies and applications. Investments include software with 3YOURMIND, post-processing from DyeMansion and Swedish Exmet AB – a company using additive manufacturing to work with amorphous metal alloys.

On February 19th, 3DVerkstan is hosting the Nordic AM Startup Day 2020, an AM Ventures pitch event in Stockholm.
Here, entrepreneurs, industry experts and investors come together to pitch, showcase and network around new industrial AM innovations from all of Scandinavia and the Baltics.

Daniel Ljungstig, CEO of 3DVerkstan has caught up with Arno Held, Chief Venture Officer at AMV, to learn more about how to get your 3D printing start-up financed, what venture capital firms are looking for in the additive manufacturing industry and where opportunities for innovation still needs to be filled.

How would you describe AMV and what is the purpose of the fund?

- AM Ventures is a globally active early stage venture firm focusing on additive manufacturing hardware, software, materials and applications. We are a team of 10 highly passionate and very experienced tech professionals of diverse backgrounds supporting inspiring entrepreneurs with a super synergetic ecosystem of various AM start-ups and corporations.

Arno Held, Chief Venture Officer at AMV.

What differs AMV from other funds / companies investing in AM?

- Our main USP is most certainly the incredibly fruitful ecosystem that we have built over the past 5 years. More than a dozen companies supporting each other with engineering and business knowhow within the AM industry. This environment not only gives us access to great competencies, it also provides us with an unrivalled overview of the AM industry when it comes to new technological trends or the rise of new killer applications.

"The potential volumes beyond imagination and design possibilities are thanks to AM technologies almost limitless."

Can you tell me more about how you evaluate which start-ups to invest in? Are you doing short-term or long-term investments?

- In early stage investments, it is the people who make the difference. Therefore, we are putting a high effort into evaluating the team of founders. We want to understand their motivation for building a business, how well they know their technology, the market and their specific customers. After this comes the product: what is the underlying business model, and are there any proof points that validate the chosen go to market strategy? Whether we invest long-term or short-term strongly depends on the nature of the product and also on the founder’s intention. We are willing to support any kinds of plans if they make sense and are feasible. Generally speaking, as experienced hardware entrepreneurs, we are probably more patient and long-term focused than classic software investors.

What applications and areas of AM are most interesting to you right now? Where are the big challenges and opportunities?

- Currently, we have a few highly promising metal applications in the making which have the potential to disrupt gigantic industries. Take heat exchangers as an example: Every phone has at least one, every laptop at least two, every car far more than a dozen. The potential volumes beyond imagination and design possibilities are thanks to AM technologies almost limitless. Here, the big challenges for small start-ups are most certainly the scale and required ramp-up speed. This needs very skilled and reliable partners all along the value chain. Another challenge would be the focus. If I have endless opportunities in all directions, where do I go first? Thanks to our wide network and manifold experience in different verticals, AMV can help with many of these challenges.

In what phase should a startup approach you and what is the typical investment size?

- As we understand ourselves as the most experienced investors in AM, we are happy to evaluate start-up as early as possible in its lifecycle. In fact, there has been more than a handful of individuals who asked for our help to establish a legal entity and provide seed funding the very first steps of their entrepreneurial life. And – by the way – all of them are still successful today.
Typically, we invest something between 300k€ and 1.5M€ in the early rounds and allocate up to 8 Million € of total investment for a single company.

"One of the most common misstakes, for example, is picking the wrong business angel and giving them too many shares"

Do you offer advice on business models and market segmentation or is that something that entrepreneurs need to be clear about from the beginning?

- Of course, we are happy to share our experiences and give advice regarding all aspects of entrepreneurship. It is, however, not our intention to do other people’s jobs and design their businesses. We certainly expect a high level of own research and scenarios which we then critically evaluate in cooperation with the entrepreneurs.

How important is it to have a patent? What about other types of Intellectual Property protection?

- A patent is certainly a very good thing to have. However, it is only really powerful if you have the will and the funds to enforce a patent in order to protect your market position. This is the really expensive part in this game, but it also allows you to test very interesting business models. Some of our start-ups also decide to not file patents and keep the magic ingredient a secret. This might work but puts you at risk in case someone else patents your process.

You review a lot of startups. What is the most common oversight a new startup does?

- There is quite a wide range of mistakes that can be made by inexperienced founders. One of the most common ones, for example, is picking the wrong business angel and giving them too many shares. We have seen start-ups fail just because of this mistake and even in the mildest cases, the effort to resolve this conflict was very painful. And this is not against business angels in general, we ourselves have worked very successful with angel-backed start-ups.

What is the quality you look for the most in a startup and the team of entrepreneurs?

- Clearly the ability to listen to customers and sensing market trends and business opportunities. In our past, not a single start-up has become successful with their original idea. All good founders have always had the ability to adapt their business model or products in order to give the market what it demands.

Have you seen any notable differences between Scandinavian startups compared to others? Any particular strengths or weaknesses?

- So far, our database provides too little information about Scandinavian start-ups in order to be very precise in our analysis. However, what we can certainly say is that start-ups from Nordic countries are always staffed with impressively high levels of technical competencies and even hard-core engineers have a pretty good understanding of the business world. A combination which cannot be found easily everywhere.

You have been tracking startups from all over the world. What are the key factors to long term success?

- Three main factors:
The team is everything in early stages!
A sound business model with a strong lock-in effect and good streams of recurring revenues
A powerful and well-connected network of advisors and investors like AM Ventures that can help open doors to top-customers and strategic partners.

3DVerkstan is very excited to host Nordic AM startup day on February 19th 2020, where Arno Held will welcome registered startups to pitch their ideas, and also inspire and present success-stories from DyeMansion and others.

Welcome with your registration via the form below, or contact Daniel Ljungstig direct with your questions.

Daniel Ljungstig, CEO at 3DVerkstan

ABOUT AM VENTURES

The unique ecosystem consists of hardware, software, material and application ventures around the world besides various partnerships with large corporations focusing on the production of disruptive applications. The market leaders in additive manufacturing (EOS Group) and laser scanning technology (Scanlab) are sister companies of AMV. Furthermore, the ecosystem includes a network of long-term focused and relationship oriented investors and a pool of industry experts with decades of experience in engineering, production and executive management.

AMV’s unique approaches include the funding of ventures with customized investments and advanced production technologies, the design of advanced value chains for the serial production of specific applications and the acceleration of businesses by providing unique know-how.

ABOUT 3DVERKSTAN

3DVerkstan Nordic AB is a driving force for additive manufacturing in Sweden and Scandinavia. With a knowledge-focused team of 20 people, we continuously use, challenge and develop the current 3d printing technologies and applications together with our customers.

We host AM conferences and events in our meetup center in central Stockholm. With a global network of technology and business partners, we display current AM technologies and applications in our showroom. Our vision is to make Additive Manufacturing / 3D Printing the most value-adding manufacturing technology of this century.

We are pleased to be able to present AM Ventures as our partner for this exciting event, with an extensive and unique AM experience.