«Swiss VCs don’t act differently than in other countries»

Is what et al. Peter Pfister answered when questioned on the readiness of Swiss venture capitalists to take risks. In the following interview, the venture kick jury member and Business Angel of the Year 2009, answers further questions on his understanding of risk and the kind of companies he prefers to invest in.

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«Swiss Business Angel of the Year 2009» and venture kick jury member Peter Pfister

«Switzerland is expecting a start-up boom this year. What could be the driving factors behind it?»
Peter Pfister: «It is not obvious to me why there should be a start-up boom this year. Innovation and scientific achievements cannot be timed. The only thing a country can do is to provide a supportive environment and the resources that foster innovation. Switzerland with its high quality universities, foundations and initiatives such as CTI, >>venture>> and venture kick does an excellent job.»

«Leaders in innovation, award winners, etc. How does Switzerland fare in your opinion in the international start-up and entrepreneurial scene?»
Peter Pfister: «Given the size of the country, Switzerland compares very well with the rest of the world with respect to innovation and start-ups. We are one of the world leaders in number of patents issued. In Switzerland successful businesses often exit trough a trade sale versus an IPO. Therefore, once they are part of a larger corporation nobody hears about them anymore. To some extent this is due to the fact that a relatively large percentage of successful companies are in the life sciences. IPO’s in the life sciences are very rare – in any country. We possibly lack enough young people who want to be entrepreneurs.»

«What are your thoughts on the first-time publication of the TOP 100 Startups?»
Peter Pfister: «Very few people have a complete overview of the Swiss start-up scene. Therefore I assume that many have chosen from the few companies they knew. Having said that, I believe the winners are all well deserved. In the future the organization could possibly prepare a review of the potential start-ups.»

«Hugo Wyss, an honorary member of SECA addressed those present at the TOP 100 event. He emphasized the paramount importance for Swiss start-ups to take on a global perspective, this being the only way to create the new Logitech. What do Swiss start-ups need to do differently in order achieve this?»
Peter Pfister: «Mr. Wyss is correct. For most businesses the Swiss market is simply too small. However, I believe most start-ups recognize the need to have an international focus. Two of the companies where I am actively involved have over 90% of their revenues outside of Switzerland. One observation I have made is that Swiss start-ups are often reluctant or slow to set up a sales office or a subsidiary in a foreign target market. A foreign market (especially in a different time zone) can often only be penetrated by establishing a physical presence and acquiring in depth market knowledge that only locals can provide.»

«One often hears voices criticizing Swiss venture capitalists – in particular when compared to their American but also to some of their European counterparts – saying that sometimes they just aren't ready to take the necessary risks. Your thoughts?»
Peter Pfister: «I don’t think that Swiss VCs act differently than in other countries – it’s a global business. However in the USA Business Angels and VCs work better together than in Switzerland. We both need each other. The VCs need the Business Angels to provide seed financing and the Business Angels need the VCs for follow-on financing. I’m convinced that with some effort on both sides the cooperation could improve and be mutually beneficial.»

«What are the areas you prefer to invest in – and why?»
Peter Pfister: «I mainly invest in Life Sciences, but I avoid drug development because it requires too much capital for Business Angels. In Life Sciences Switzerland plays in the Champions League.»

«Which start-up supported by Starangels is your personal favorite? Are there some venture kick start-ups that you consider to be promising investment opportunities?»
Peter Pfister: «Of course my favorites are those where I am invested, e.g. Selexis and Viroblock. Many other companies that found financing through StartAngels Network look promising, they are just not in a sector of my investment focus. I have discussed investments with several venture kick companies. Unfortunately we never got to a deal or they found financing elsewhere.»

«There are some fundamental tips which are often given to start-ups on the lookout for investors. Which principle is  the most important one for you personally – do you have any particular tip for newcomers?»
Peter Pfister: «I always look at 4 risks: Product Risk, People Risk, Financing Risk and Market Risk. Every investor has to decide for him/herself if the risks of a specific investment opportunity are acceptable. Market Risk is often underestimated.»

«Which idea, which to your regret hasn't be presented to you yet, would entice you to invest all the money of the world in it?»
Peter Pfister: «There is no idea which would entice me to put all of my eggs in one basket. Diversification is a cornerstone of successful Business Angel investing.»

About Peter Pfister
Peter Pfister was born in 1951 in Roslyn, New York. After completing his doctoral studies in economics at the University of Basel, obtaining his Dr. Rer. Pol in 1983, he started out his career in marketing before switching to the financial sector and finally directing several division of Kraft Foods in Zürich, Chicago and Paris. After completing different mandates as a CFO resp. as a CEO for various companies in the San Francisco area, he has since July 2001 been active as an independent Private Equity Investor and Business Angel. Moreover, he is not only on the board of CTI Invest but also a board member resp. chairman of the board for several Swiss companies. In 2009 he was awarded «Swiss Business Angel of the Year 2009» by SECA.

Weiterführende Links

annual report 2013

Mehr als 11 Mio. an Startkapital, über 298 finanzierte Startups, mehr als 464 Mio. an Folgefinanzierungen und 2433 neue Jobs - dies ist der Erfolgsausweis von venture kick seit die private Initiative im Herbst 2007 ins Leben gerufen wurde (Konsortium).

annual report 2013

Eine philanthropische Initiative eines privaten Konsortiums

Wissenschaftliche Innovationen in die Marktwirtschaft zu transferieren und damit nachhaltige Arbeitsplätze zu schaffen ist der Schlüssel für sozialen und wirtschaftlichen Wohlstand. Startups sind besonders in den Anfängen hohen wirtschaftlichen Risiken ausgesetzt, die weder von öffentlichen Geldern, noch von privaten Investoren abgefedert werden. Diese Lücke zu schliessen und Startups in einer sehr frühen Phase zu unterstützen ist wichtig und eine philantropische Aufgabe.