The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

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

Nov 27, 2024

Klaus Hommels, founder of Lakestar and a key player in European venture capital, shares his radical insights on investing. He argues that price sensitivity and portfolio strategies are outdated concepts. The discussion explores Europe's innovation challenges, highlighting its underfunding and the need for a shift in investment culture. Klaus recounts personal investment stories, including pivotal moments that led to significant returns, like his early bet on Spotify. He emphasizes the importance of concentrated investments and critiques Europe's military tech reliance.

01:09:51

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Klaus Hommels

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Quick takeaways

Klaus Hommels challenges traditional investing notions by asserting that price sensitivity and portfolio building are outdated concepts that hinder substantial returns.

He highlights Europe's struggle with innovation financing as a critical barrier to becoming a global superpower, emphasizing the need for systemic change to foster investment growth.

The podcast underscores the importance of investing in transformative companies over diversified portfolios, where exceptional opportunities can yield outstanding results if pursued aggressively.

Deep dives

The Value of Transformative Investments

Transformative investments focus on finding companies that significantly impact society rather than merely building diversified portfolios. The guest believes that having one or two standout companies can make an entire portfolio look impressive. For him, taking substantial risks on exceptional companies is crucial for achieving strong returns. This approach underlines the importance of recognizing unique opportunities and being willing to invest heavily when the right company is identified.

Intro

4min

A Journey From Farming to Finance: The Puma IPO Story

2min

Navigating the Nuances of Young Investing

19min

Rethinking Defense in a Geopolitical Landscape

8min

The Case for Increased Defense Spending in Europe

3min

Investing in Defense Innovation

17min

Investing Beyond Boundaries

13min

Exploring Transformative Ideas and Innovative Solutions for Startups

3min

Klaus Hommels is one of Europe’s leading start investors of the last decade with a portfolio including the likes of Spotify, Airbnb, Facebook, Coinbase, Revolut and more. Among his many responsibilities, Klaus is the Founder of Lakestar, his own venture fund and chairs the board of directors of the NATO Innovation Fund.

In Today’s Episode with Klaus Hommels We Discuss:

1. The Investing Rules that are BS:

Why does Klaus totally reject the idea of price sensitivity?
Why does Klaus hate the idea of “building portfolios”?
Why does Klaus believe the best investments are made when there is not a fundraising round in motion?
Why does Klaus believe that capital concentration limits on a per company basis are BS? How concentrated is Klaus happy to be?

2. Europe: What The F*** is Going On:

Why is Europe underfinancing innovation by a factor of eight?
Why is Europe unable to send satellites into space for six years?
What should Europe do to become a global superpower once again? What needs to change?
Why should European pension funds be forced to invest in venture capital?

3. The Stories Behind the $BN Returns:

How did a dinner with Klaus’ son lead to his investing in Revolut?
How did Klaus analysis of Friendster and MySpace lead to his buying Matt Cohler @ Benchmark’s Facebook shares?
How did a small investment in a Swedish company, Stardoll, lead to Klaus investing in the seed round of Spotify?
How did a conversation with Madonna’s manager lead to Klaus investing in Airbnb?

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