10 Years Startup Support - by Venture Kick
16.10.2017
Venture Kick has distributed over CHF 21 million in seed capital and is now celebrating its 10th anniversary. Two women play a key role in the private startup initiative. Learn more in the full interview with Jost Dubacher, Handelszeitung.
 Pascale Vonmont is one of the initiators of Venture Kick and is in charge of the program’s Strategy Council. The ETH chemist has worked for the Gebert Rüf Stiftung since 1999 and was appointed director of the foundation at the GRS.
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 Suzanne Avedik is deputy managing director of the Ernst Göhner Stiftung and is responsible for the foundation’s social affairs and science/education divisions. The qualified lawyer has worked at the Ernst Göhner Stiftung since 2001 and joined Venture Kick’s Strategic Council in 2015.
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In the last few years, well over half of the TOP 100 startups have also won grants from Venture Kick. How many companies scored both accolades this year?
Suzanne Avedik [SS]: We haven’t counted, but it’s sure to be about 50% or 60% again. We’re particularly pleased that there are eight Venture Kick alumni in this year’s TOP 10! Pascale Vonmont [PV]: I think it’s really significant that Venture Kick has become such an established part of the Swiss startup ecosystem. The program provides a viable bridge between seed financing provided by the founders themselves and the subsequent in-volvement of business angels and venture capitalists.
Ms Vonmont, you represent the Gebert Rüf Stiftung (GRS), which kick-started the program 10 years ago. What was the story there?
Suzanne Avedik [SS]: We haven’t counted, but it’s sure to be about 50% or 60% again. We’re particularly pleased that there are eight Venture Kick alumni in this year’s TOP 10! Pascale Vonmont [PV]: I think it’s really significant that Venture Kick has become such an established part of the Swiss startup ecosystem. The program provides a viable bridge between seed financing provided by the founders themselves and the subsequent in-volvement of business angels and venture capitalists.
Ms Vonmont, you represent the Gebert Rüf Stiftung (GRS), which kick-started the program 10 years ago. What was the story there?
PV: Between 1999 and 2005, the GRS ran a program called New Entrepreneurs in Technology and Science (NETS), which was an entrepreneurship training program for early-career scientists. After Venture Lab began managing the initiative, we started looking for new areas in which to get involved. We talked to founders, investors and university representatives and came to the conclusion that we wanted to make a contribution towards early phase financing.
The GRS has CHF 220 million in endowment funds, making it one of the heavyweights among the Swiss charitable foundations. How much of your time do you spend working on Venture Kick?
PV: A lot. Venture Kick is a central part of our strategy. It is related directly to the founder of our foundation. Heinrich Gebert transformed his small plumbing business in Rapperswil into a company worth billions of francs. The key to his success was deciding to branch out into the manufacture of plastic components for toilets and bathrooms. Today it seems completely logical. But it was different back then. When he was young, Heinrich Gebert travelled all over Europe, from door to door – and he always had a plastic toilet cistern in the boot of his car. That experience influenced him greatly, which is why he dedicated his foundation specifically to the promotion of groundbreaking innovations.
The Ernst Göhner Stiftung (EGS) is also one of the 10 largest foundations in Switzerland. What do innovation and entrepreneurship mean to the EGS?
SS: The foundation administers the inheritance of the construction and industrial pioneer Ernst Göhner from an entrepreneurial perspective and through organisation of en-trepreneurial initiatives. Our not-for-profit activities are very diverse. Since it was established, the foundation has distributed about half a billion francs. About 15% percent of our activities are dedicated to education and science, and within that segment, our involvement in Venture Kick plays a prominent role.
After the Gebert Rüf Stiftung contacted you about Venture Kick, did you have to think it over for long before becoming involved?
SS: No, the concept and the need for this kind of sponsorship immediately made sense to our board of trustees. PV: I still remember it well. Everything happened incredibly fast. We contacted the EGS in January 2007 and by the start of June we were launching Venture Kick. It was announced on Tuesday 12 June, in the last episode of Startup on Swiss television. The jury met for the first time the following September. SS: The Venture Kick concept is impressive, because it combines financial support with a professional coaching process. It fosters and challenges startups in equal measure.
After the Gebert Rüf Stiftung contacted you about Venture Kick, did you have to think it over for long before becoming involved?
SS: No, the concept and the need for this kind of sponsorship immediately made sense to our board of trustees. PV: I still remember it well. Everything happened incredibly fast. We contacted the EGS in January 2007 and by the start of June we were launching Venture Kick. It was announced on Tuesday 12 June, in the last episode of Startup on Swiss television. The jury met for the first time the following September. SS: The Venture Kick concept is impressive, because it combines financial support with a professional coaching process. It fosters and challenges startups in equal measure.
How does it work exactly?
PV: Venture Kick is set up like a multi-stage competition. At every stage of the three-stage selection process (see box: 10 years of Venture Kick), the successful teams receive money: CHF 10,000 after the first stage, CHF 20,000 after the second and CHF 100,000 francs after the third. During their pitches, the applicants are well and truly grilled. The jury is sourced from a pool of more than 100 professionals; their industry experience means they are able to ask the right questions about all aspects of starting and running a business.
How do you recruit jury members?
SS: They all come from the startup and innovation ecosystem. They are active business angels, professional investors, investment managers from the industry and - most im-portantly - entrepreneurs who have founded high-tech startups themselves. We are particularly pleased that Venture Kick alumni who have successfully sold their companies are now investing in the next generation.
The Kickers Camps are a special part of Venture Kick. What do they involve?
PV: It's a really interesting initiative: after the first round of selection, each of the three to four successful teams is invited to attend a two-day camp. During the camp, the Venture Kick representatives really grill the prospective startup founders. They identify each project’s weak points – from the pitch through to the revenue model – and set the initiators specific tasks that they have to complete within three months, before their next meeting with the jury. And then after the second jury meeting, the whole procedure is repeated. SS: It’s absolutely fascinating to see how quickly young scientists and engineers learn. It’s like watching rough diamonds being cut and polished. I remember this one young software engineer from ETH Lausanne. His first presentation in front of the jury was – there’s no other way to put it – a catastrophe. But because his project had potential, he was invited to the next round and he absolutely blossomed during the Kickers Camps. These days his pitches are fantastic.
In 2013, you introduced the equity model at Venture Kick. What’s it all about?
PV: Until that point, the winners of all three rounds received a total of CHF 130,000 in out-right grants. Now the third round also involves an equity participation by Venture Kick.
That of course raises the question of the valuation of the company...
SS: Venture Kick basically takes over the valuation of the next financing round and it is in effect comparable to a convertible loan, but with no interest or discount. That’s why it’s particularly beneficial for startups. PV: Companies that are not planning any fi-nancing rounds are handled differently. In such cases, the Venture Kick foundation receives 10% of the stock, which results in a very generous valuation of CHF 1.3 million.
How do you recruit jury members?
SS: They all come from the startup and innovation ecosystem. They are active business angels, professional investors, investment managers from the industry and - most im-portantly - entrepreneurs who have founded high-tech startups themselves. We are particularly pleased that Venture Kick alumni who have successfully sold their companies are now investing in the next generation.
The Kickers Camps are a special part of Venture Kick. What do they involve?
PV: It's a really interesting initiative: after the first round of selection, each of the three to four successful teams is invited to attend a two-day camp. During the camp, the Venture Kick representatives really grill the prospective startup founders. They identify each project’s weak points – from the pitch through to the revenue model – and set the initiators specific tasks that they have to complete within three months, before their next meeting with the jury. And then after the second jury meeting, the whole procedure is repeated. SS: It’s absolutely fascinating to see how quickly young scientists and engineers learn. It’s like watching rough diamonds being cut and polished. I remember this one young software engineer from ETH Lausanne. His first presentation in front of the jury was – there’s no other way to put it – a catastrophe. But because his project had potential, he was invited to the next round and he absolutely blossomed during the Kickers Camps. These days his pitches are fantastic.
In 2013, you introduced the equity model at Venture Kick. What’s it all about?
PV: Until that point, the winners of all three rounds received a total of CHF 130,000 in out-right grants. Now the third round also involves an equity participation by Venture Kick.
That of course raises the question of the valuation of the company...
SS: Venture Kick basically takes over the valuation of the next financing round and it is in effect comparable to a convertible loan, but with no interest or discount. That’s why it’s particularly beneficial for startups. PV: Companies that are not planning any fi-nancing rounds are handled differently. In such cases, the Venture Kick foundation receives 10% of the stock, which results in a very generous valuation of CHF 1.3 million.
What does Venture Kick's ownership strategy look like? In other words, what happens to the startup shares held by the foundation?
PV: Let me just say first that the equity model is not primarily about achieving a return on investment. We're much more focused on the idea that a successful entrepreneur is morally obliged to give something back to the community - which is also how Heinrich Gebert saw it. We want to maintain this approach and encourage today's startups to adopt it. SS: Actually, the University of St. Gallen just published a study about this. It shows that philanthropic capital used to promote science, innovation and entrepreneurship gen-erates great returns for society as a whole. But back to your question: all the money from exits naturally flows back into the programme. The rapidly growing demand for support through Venture Kick is crying out for addi-tional funding. We have a lot planned for the next 10 years.
Such as?
SS: To start with, we need to broaden Venture Kick’s support base. Until now it has been sponsored primarily by foundations and private individuals. We want to expand this group, so that we can cover the growing demand for capital; for instance, through partnerships with large companies. In 2016, Migros and Swisscom came on board. It’s a good start, but we believe this approach could be taken much further. After all, a dynamic startup and innovation ecosystem strengthens Switzerland as a whole. PV: To broaden our base, we also receive active support from the Swiss Entrepreneurs Foundation (SEF). As you know, under the patronage of the Minister for Economic Affairs Johann Schneider-Ammann, the SEF fund has already received financial support in the order of CHF 300 million. SS: This new Swiss fund is committed to financing companies that have a marketable product, professional organisational structures and which are ready to expand internationally. With its focus on growth capital, it is the logical continuation of Venture Kick that we have been dreaming of for a long time.
PV: Let me just say first that the equity model is not primarily about achieving a return on investment. We're much more focused on the idea that a successful entrepreneur is morally obliged to give something back to the community - which is also how Heinrich Gebert saw it. We want to maintain this approach and encourage today's startups to adopt it. SS: Actually, the University of St. Gallen just published a study about this. It shows that philanthropic capital used to promote science, innovation and entrepreneurship gen-erates great returns for society as a whole. But back to your question: all the money from exits naturally flows back into the programme. The rapidly growing demand for support through Venture Kick is crying out for addi-tional funding. We have a lot planned for the next 10 years.
Such as?
SS: To start with, we need to broaden Venture Kick’s support base. Until now it has been sponsored primarily by foundations and private individuals. We want to expand this group, so that we can cover the growing demand for capital; for instance, through partnerships with large companies. In 2016, Migros and Swisscom came on board. It’s a good start, but we believe this approach could be taken much further. After all, a dynamic startup and innovation ecosystem strengthens Switzerland as a whole. PV: To broaden our base, we also receive active support from the Swiss Entrepreneurs Foundation (SEF). As you know, under the patronage of the Minister for Economic Affairs Johann Schneider-Ammann, the SEF fund has already received financial support in the order of CHF 300 million. SS: This new Swiss fund is committed to financing companies that have a marketable product, professional organisational structures and which are ready to expand internationally. With its focus on growth capital, it is the logical continuation of Venture Kick that we have been dreaming of for a long time.