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Interview German Business Angel of the Year 2020

Updated: 1 day ago

This story was migrated from our old blog, originally published on March 18th, 2021.

What Is This About?

Nikolaus D., named German Business Angel of the Year 2020, shares his approach to early-stage investing in this interview. The conversation explores what makes a great angel investor, how he evaluates founding teams, and what the DACH angel investment landscape looks like from the inside.

Executive Summary

  • This story was migrated from our old blog, originally published on March 18th, 2021.

  • This blog post first appeared first on old medium publication (https://medium.

  • In this interview, we are talking to Nikolaus D.

  • The investments of Nikolaus include our past interview guests Anyblock Analytics (https://www.

  • The Audio Podcast will be published at the same time.

Interview German Business Angel of the Year 2020 Startuprad.io brings you independent coverage of the key developments shaping the startup and venture capital landscape across Germany, Austria, and Switzerland.

This story was migrated from our old blog, originally published on March 18th, 2021.



New Blog

This blog post first appeared first on old medium publication (https://medium.com/startuprad-io), and was moved to this blog with the relaunch of our website in summer 2024.


German Business Angel of the Year 2020

What we have been doing [at IRIS Analytics] was one of the first commercially successful applications of artificial intelligence.Nikolaus D. Bayer, Business Angel on his former company

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The third good way to reach me is LinkedIn, but I ignore requests without any message why I should connect.Nikolaus D. Bayer, Business Angel

The Investor

In this interview, we are talking to Nikolaus D. Bayer (https://www.linkedin.com/in/nikolausbayer/), the recipient of the Business Angel of the Year Award. The award is granted by the German Business Angel Association Business Angel Netzwerk Deutschland BAND (https://www.business-angels.de/). He founded a company focusing on fraud in payments, called IRIS Analytics, which was bought by IBN end of 2015. He uses these proceeds to invest as a business angel. For his investments, he uses the BeAI GmbH.


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The Investment Philosophy

The investments of Nikolaus include our past interview guests Anyblock Analytics (https://www.startuprad.io/blog/anyblock-is-like-google-analytics-for-blockchain/), as well as eleven other startups he lists on his website. They include the ebike company Sigo, node.energy from Rhine-Main, as well as cybersecurity startups like intruder or edtech companies like StudySmarter. You can learn more here: https://beai.eu/de/#portfolio

My first investment started at the wedding of a friend on the bar.Nikolaus D. Bayer, Business Angel

The Video Interview is set to go live on March 18th, 2021 17.00 CET(Frankfurt/Paris/Zurich/Milano)



The Audio Interview

The Audio Podcast will be published at the same time.


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The Interviewer

This interview was conducted by Jörn “Joe” Menninger, startup scout, founder, and host of Startuprad.io. Reach out to him:LinkedInTwitterEmail


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Transcript

Intro


[0:00] Music.


[0:08] That I owe you were podcast and YouTube blog covering the German startups.With News interviews and Live Events hello and welcome everybody this is Joe from celebrated aour.And you to block from Germany I’m bringing you to date another interview in our series with investors this time I have the pleasure to welcome the business Angel of the Year 2020 Nicholas d,Bayer hey how you doing hi Joe hi everyone I’m fine thankswe may tell our audience before that there are many awards for business angels but years is from the German business Angel association called bant if I’m not mistaken.


Nikolaus’ First Exit


[1:00] Yeah that’s correct.And the specialty here is that it’s not a jury granting this award while in the end yes but in order to be nominated you have to be nominated by one of your startups.So it was It’s actually an investor a word where the startups have to recommend the investor.


[1:23] Yeah exactly so that’s some kind of gate that not everyone may get this award and which is something which makes me exceptionally proud because my startups have nominated me.That is really cool but before we get into your,business Angel investment investing and investing philosophy let us first talk a little bit about what you did before I’ve seen you had severalstops along your professional path can you take us like a little bit on the journey to the stage what let you too,starting up your own company because my understanding is you started the company you sold it to IBM and from those proceedings you became a professional investor but first let us take it step-by-step okay.


[2:16] Yeah so basically I studied computer science and then and Knockin.And then because of my diploma thesis I went to to the Frankfurt and into the banking industry and.I was focusing on payments and general and on fraud in payments.


[2:37] And one day that was in 2006–2007 there open the chance to open or to found my own company together with a partner which we did.And yeah the business was about preventing fraud in credit card transactions online bank and so on.As although I said that I study computer science I have never worked as a typical programmer or software developer.I was always at the customer-facing site so selling a product marketing a product project or product management.


[3:16] And solve this was almost happening as it should have that I said okay now let’s build the own business which we did.And then this this went quite well and then in 2015 there was like a strategic discussion internally do we grow further on our own.Because we were addressing a global market.Or do we need external funding to accelerate growth even more and then.Almost all of the Blues there’s something was IBM which was interested in acquiring the business which they then eventually did.


[4:00] And I myself thought well I’ve just gone 40 years.And I I’m sure other young I can start doing other things so I don’t need to stay in the business.Which happily I could because all the other key persons in the in the company state with IBM so it was allowed to leave the company,I would be at first because this is a podcast where I guess like ninety percent more or less of the audience touches entrepreneurship can you tell us a little bit aboutwhat you company was all about because my understanding is thatflood prevention in credit card payments is still desperately needed and there is still today.


[4:59] Small level but still fraud going on.


[5:04] I mean a very basic example is you have you have a credit card and there’s one payment at a gas station at 9:00 a.m. and Frankfort and three hours later,there’s an ATM withdrawal in New York with the same card.And and we as human beings we know that this is not possible because you cannot travel as fast however from a technical perspective.I mean the card was valid the pin has been entered correctly there’s enough money on the account so from a technical perspective perspective both transactions are completely valid and normally.The second transaction they withdrawal in New York would be granted authorized this is the technical term for that and sowe in our business we had a real-time transaction analysis engine which was looking for such special kinds of behavior.In fact what we’ve been doing is.One of the first commercially successful applications of artificial intelligence.


[6:20] That artificial intelligence Advantage is always very interesting I can see why IBM got interested in this as sorry but I interrupted you go ahead.


[6:31] Now that’s that’s fine so I’m in this simple example,his expanding very lucidly how it works you have technically everything is correct and looks fine but still we as human beings immediately no this is not possible.


[6:48] Sitting there in the in the payment stream and and looking for in Dove of abnormal behavior or deviations from from from normal standard Behaviorand of course it gets much more complex than just this single easy example.


His First Step As A Business Angel And The Decision To Build A Portfolio


[7:12] I see and then he decided okay now I now I have sold the company I made some money and,wizard already when he decided to,kind of go your own way after selling the company was it already that you set your heart on becoming a business angel or did you first investment happen by accident.


[7:36] Yeah it didn’t really happen by accident that was a reasonable decision in itself but it happened by chance let’s say actually I wasn’t a wedding of a friend of mine and.I got I literally got drunk with someone else and we were standing at the bar and having a good chat,and a few weeks later he told me of this company which was very interesting and looking for funding and he really got me excited so this was then my first investment,which is.Democrats from Dube they do micro insurance for the third third world so for like blow some insurances which are,in a third world country a big deal but not like here in Germany where the premium would be so low that no insurance has an interest in that so I invested in this company and.But then at the same time I thought I would look this is high-risk business and if you just do one except investment you can almost be sure that you will lose your money so I need to to invest into more startups.


[8:48] And and take it serious this is this is not.Spending money for fun this is serious business I want to have a return on investment so I need to spread my risk.And then this how it started then I started to look at generating my own deal flow and so on.Now it’s at the moment it’s 11 startups and I’m looking to grow further.


[9:21] Because I know in the end 8 out of 10 startups unfortunately will not make it.But with 11 startups you do have the opportunity 11 current Investments to really have a valid business in your portfolio and I really.I think that it’s a very good idea to diversify your risk also as a business angel.I was just smiling because,it appears that in the last few weeks a lot of the interesting startups stories a start on a bar or with a bottle of wine cellar so you’re here all along that line,I would also be curious how you then approached your diversification because my understanding is thatall the startups are looking for investors and investors are looking for good startups but there’s always an issue of information how do you match,dos both and so I would be curious how startups like a lot of startups out there how they are getting the attention of investors of course appearing on startupradio but other channels.


How Startups Get His Attention


[10:40] It’s also the other way around I mean investors are looking forfor for great startups so I do ask the question myself as well how do I get into a how do I get in touch with good startups,what I’ve learned is in the past few years that,from a start-up perspective I mean if you do your initial pitch deck right as boring as it sounds,this is the name important First Step because really I do see so many pitch texts a day and it really comes down to the first impression you make and it’s likescanning the pitch deck for like and you have just three for five minutes when until you say Okay I want to know to learn more or I.Put it into the bin and and then there’s what I like very much is the.The suggested pitch deck approach by Sequoia capital.Because that’s really boiling it down to the key question and investor has and so docraft those ten twelve Pages correctly and then it’s already you’re getting very far in in providing Angel Investors a first good set of information and to answer their immediate questions.


[12:08] Of course we will have them linked it down here in the show notes I was I was just missing one little piece because we entered at the point where you are,getting the pitch decks I was I was curious how you first get the contact of getting the pitch decks how you find the startups is it just your network.I think it’s based on two pillars.First one in really is the network and I know for a start-up it’s difficult to get into a network,and but the second pillar here is like the business Angel associations like the business angels here in Frankfort Ryan mine,you can just drop your pitch deck there or fill out a questionnaire and then you are in the deal flow and will be considered.The info is sent to a we call it screening committee.And this is some angels looking at it screening at it and if you pass through you’re being asked to join a matching event which happens every once a month.This is like 800 to 2000 startups are filing their pitch deck a year.


[13:34] And I would say every month we have like 6 of them presenting.In person at the moment is virtual through through videoconferencing and maybe next year it will be in person again so this is and for me.An important source of deal flow as well because we have the pre-screening there which helps a lot.And this always is then also about co-investing together with other Angels which is necessary orfrom my perspective ways to do so I would recommend to look out for those angels syndicates which are.Asking for your pitch deck down and then I mean of course the third option is like contacting someone on LinkedIn.I do read I personally I do read those what I’m fully ignore is like connection requests which don’t even.Put in some notice why someone is trying to connect but if someone sends me a reasonable note why he’s contacting me I will read it.So I think these are the three sources of of deal flow your network.


[14:58] Angel Syndicate and then the social network,okay I see and now you have the pitch deck in front of you you’re just skimming through it what are the points you are looking for that dear.


[15:22] I would like first of all I mean it’s about the business idea and all the problem they are going to solve so that’s I want to understand that and I want to know that it is a,a reasonable problem now I’m not going to invest into.Acute nice idea which will work but in the end is small I’m looking for for problems.Which have the the opportunity to generate like I haven’t read million euros Revenue a year.And the second question then is is theirs.A vitamin pill or is it a pain killer now nor in other words is it nice to have or is it sorting out serious problem.


[16:08] And then another question of cause is the team looking good.I have invested into single Founders as well.But normally of course it’s easier if you can say look they already have an established team and they’re they’re meeting typical requirements I mean a software company which doesn’t have a CTO is a bad ideaso I think these probably are the three my personal three major point so what about the team is it sorting out a serious problem and.Is the addressable Market big enough mmm I see let’s say you are then,putting out a term sheet meaning writing down your standard terms under which you or The Syndicate would like to invest,what is then the usual reaction of startups do they just accept it or is there like a lot of lot of negotiation going on.


[17:24] I think that’s still a lot of discussion afterwards the.Of course pricing or valuation is one big issue where you can be miles away or never cap,to never get on turns but on the other hand for like that especially for first-time Founders there are some things which are really hard to accept if they read it for the first time for instance like the vesting.Yeah oh I’m getting ill.And I have to give better or a big majority of shares this is hard to accept and you have to explain them what the rationale for this as so there’s lots of discussions around this what has helped hugely,air is the.The standard term sheet and standard contracts which at least here in Germany have been recently been drafted by the German startup Association together with the.Business Angel Association because these two groups have set together and and agreed on like standard terms so we all know that.There’s some in favor of the startup or in the founder and there’s other aspects in favor of the investors so this has.Cut down many discussions recently.


[18:51] Of course we will also link them down here in the show notes but they are in German only let’s say okay we now get a step further you ohno I can correct you they are both in German and in English,and I probably would suggest that even if you’re from another legal system have a look at these because exactly there has been the big discussion between,investors and founders,and their lawyers of course to find a some good leveling between the interest involve both parties I can imagine this will have another jurisdictions as well.


[19:33] Mmm-hmm ICICI was mistaken and corrected thank you now that you guys agreed.On funding whatis because they’re like several types of business angels one that always want to be the backseat driver one that is completely ignoring the startup and asked once a year hey guys how are you doinghi are you somewhere in between those extremes.


[20:14] Business Angel so I’m trying to keep in touch with the founders on a regular basis,to be there when they need me like if they want to discuss a certain issue of the business to challenge them.So chances are high you will see more of me than other Angel Investors typically.


[20:42] Which also means you have a limited amount oflimited number of startups lot for you because you’re getting involved what I understand this deskthat a lot of startups are having something like WhatsApp a telegram group with a regular sent out some type of update some type of what’s going on do you also have that.


[21:09] Now what’s happened telegram personally I have not seen as a Communications Channel but yes we have Slack.Or plain old email or share talks.But I mean it’s always a question also of in which phase a start-up is or how experienced the founders are I mean I mean some.I don’t see for like like two month we only have quarterly meetings but others if there is something going on which where I can help.Then it may need I’m I’m in touch with them several times a week I mean it particularly when it comes to financing rounds.Then there’s always lots of involvement of the existing investors.And or like typical situations what we when the company grows and and approaches the next level and.The founders notice maybe we need to work on our organization or we need some help in and staying focused,yeah or how do I structure my.


[22:18] My HR or how do I structure my development strategy and and stuff like that and that can mean that I that Igo and work with the with the startup for number of days but January I’m not an operational person I’m the coach here.And I’m asking questions from the startup Founders I’m giving advice but I’m not then executing that’s that’s for that.


[22:48] Yes I I’ve noticed that there is like a lot of questions that pop up on a very predictable path for startup Founders asespecially when the startup is growing and at one point they can run it like like a shoeboxin a shoebox mentality money in Money out but at one point when you start to have like two digits of employees like 10 12 25 you cannot keep track of what everything is doing and you need,really take the step and break stuff down and divide it between people which I personally found pretty hard to do a very first time to you also see that.


[23:33] Yeah I mean we have to differentiate between first-time Founders and,people who have been running a company previously I mean and this dominant dominantly applies to the first time phones they are getting into situations where they have never been before and the.Problem can be that they even don’t know that they are in a.


[23:56] In a difficult situations so that now you’ve grown to a certain level that you immediately need to implementsome processes I just had that recently recently like first time founder growing above 10 employees or 10 employees in the development department and then they notice how there’s this.Chaos coming up or is this not working as smooth as it should so and there,I always want to be proactive like challenging my Founders what could be a problem now because I know when they reach a certain size these are typical problems so I’m telling thing challenging them askinghey do you have a problem here but I’m also.Trying to establish an relationship with them where they automatically come and talk to me.


[24:55] About potential issues and room for optimization and so that I can give back some of my previous experience.Yeah that’s also what I found very useful if you have an,a business Angel who does not only give you money but also provides additional,additional benefits I think we got through most of the points we’ve been talking about but let me ask you two questionsfirst what will be your top recommendation for a first-time founder,who just gets his pitch deck together and thinks about approaching business angelswhat will be like your first tip except for get your pitch deck together look for the Sequoia pitch deck look at the German standard setting Institute website the financing contracts and stuff like that what would be likeyour number one tip there I would say be open and try to learn.


Nikolaus’ Top Recommendations For First Time Founders Seeking Funding


[26:02] From the advice all the feedback that people are giving to you I mean of course.


[26:10] Every investor is a bias so he may tell you some things which are in his favor but if you speak to more people you will of course get more feedback so go out and listen.What they are saying and if in the if you make errors.Are not normally in the first instance you will surely have a second chance with the next interested investor and then you can do better.Yes I’ve opened try to dump try to,to propose that the year of the best and most knowledgeable person it’s just natural that you don’t have as much as experience as someone who has twice the age for instance of his of you.


[27:00] Yes that,pretty much goes down the Elia of we’ve been talking about for example Christopher Ulster founder and CEO of clock that we talked to recently he said they talked to something like 300investors in total since they started raising Venture Capital they right now in series Cand the guys from Penta I talked to who they had talked to they had to talk to more than 60 investors before they found an investor so it can quite drag onone last question I would have for somebody who’s out there let’s say for one reason or another they have not been in successful entrepreneur but they do have some,money and are thinking about investing as a business Angel what would be your recommendation for them.


Nikolaus’ Top Recommendations For First Time Business Angels


[27:50] I would say go and go to such an angel investment Club.And and don’t invest alone is lonely wolf so they they can give you some help or advice and you can learn from themthis is one thing you’re not alone I would I personally although I have to have some quite experience now I would neverto an investment alone I always work in a Syndicate and then the second recommendation is as I said before this is high risk.


[28:28] Chances of failure a very high if you do that once you need to do it 10 times on the long run.Otherwise you will just be losing money so.As an in as a as a type of investment one startup is not enough definitely not.So you should have the capability to invest in more than one startup best would be something like 10 and of course you have to have the money to actually carry the losses because,eight of them are most likely not going to succeed right.


[29:09] Yeah so third advice here is don’t invest money which you need somebody needed but.


[29:19] Just consider it will be sitting there for seven or eight years and you have no chance of accessing it and don’t spend that money which you need for your daily life.Or precious and if this this would become bankrupt.Great it was such a pleasure having you here thank you very much there were a few interruptions and a few times you resolution jumped aware had to adjustthe the frame really sorry about that and for a few split seconds your picture with frozen unfortunately that is something due to the internet we cannot reallyum we cannot really influence but I do believe the audio and sound quality in 99% of the interview was pretty greatthank you very much for being a guest and everybody would like to learn more,down here in the show notes of course we have to pitch deck from Sequoia of course where the standard financing terms of course we do have a link to several business Angel organizations and the German Federal Business Angel organizationas well as your person’s LinkedIn profile right yes thank you very much it was a pleasure being here with you.If you are a professional looking at the European startup scene Germany is a place you cannot.


[30:40] Music.


[30:50] Our views each week most likely you have never heard or read anything only startups before an English but you will in the future be ahead of the curve And subscribe to stay.


[31:01] Music.


Who Is Germany's Business Angel of the Year 2020?

Nikolaus D. Bayer was named German Business Angel of the Year 2020. In this interview, he discusses his angel investing philosophy, portfolio approach, and insights into the German startup ecosystem. His investments include Anyblock Analytics and several other companies that have been previous Startuprad.io guests, demonstrating the interconnected nature of the DACH angel community.

Introduction

Originally published on March 18th, 2021, this interview features Nikolaus D. Bayer, the German Business Angel of the Year 2020. Bayer's portfolio includes investments in companies like Anyblock Analytics and other startups previously covered by Startuprad.io. The conversation provides insights into what makes a successful angel investor in Germany, his investment criteria, and how he evaluates startups in the DACH region.

Executive Summary

Nikolaus D. Bayer, recognized as German Business Angel of the Year 2020, shares his approach to angel investing in the DACH startup ecosystem. His portfolio includes notable companies like Anyblock Analytics and multiple other Startuprad.io guests. The interview provides a rare look into the angel investing landscape in Germany from one of its most recognized practitioners, covering deal sourcing, evaluation criteria, and the role angels play in the early-stage ecosystem.

Key Takeaways

  • Nikolaus D. Bayer was named German Business Angel of the Year 2020, recognizing his contributions to the early-stage ecosystem.

  • His investment portfolio includes Anyblock Analytics and several other companies previously featured on Startuprad.io.

  • The interview provides insights into angel investing philosophy and deal evaluation in the German startup ecosystem.

  • Bayer also appeared at the EBAN European Angel Investment Summit covered in other Startuprad.io episodes.

Atomic Answer

Entities Referenced in This Episode

  • Nikolaus D. Bayer — German Business Angel of the Year 2020

  • Anyblock Analytics — Portfolio company of Bayer, previous Startuprad.io guest

  • Topics: Angel investing, business angel, early-stage funding, DACH startup ecosystem, portfolio management

Quote Highlights

  • Nikolaus D., named German Business Angel of the Year 2020, shares his approach to early-stage investing and what makes a great angel investor.

  • The interview explores how he evaluates startups, his investment criteria, and his philosophy on supporting founders beyond just capital.

  • The award recognizes outstanding contributions to the German startup ecosystem through angel investing and mentorship.

  • Germany's business angel scene continues to grow, playing an increasingly vital role in funding early-stage ventures across the DACH region.

Related Episodes on Startuprad.io

Relationship Map

  • Jörn "Joe" Menninger → Host of → Startuprad.io

Partner with Startuprad.io

Startuprad.io is the leading independent media platform covering startups, venture capital, and innovation across the DACH region (Germany, Austria, Switzerland) and Europe. We offer B2B partnership opportunities for companies looking to reach startup decision-makers, founders, and investors.

Subscribe to the Podcast

Frequently Asked Questions

What are the key insights from "Interview German Business Angel of the Year 2020"?

Nikolaus D. Bayer was named German Business Angel of the Year in 2020. He is an active angel investor in the DACH startup ecosystem with a portfolio that includes companies like Anyblock Analytics.

What are the main takeaways from this discussion?

Angel investing involves high-net-worth individuals providing capital to early-stage startups in exchange for equity. In Germany, recognized angels like Bayer play a crucial role in funding companies too early for venture capital.

Access Europe's Startup and Technology Decision Makers

This article is part of Startuprad.io's structured coverage of the European startup ecosystem, with deep editorial roots in Germany, Austria, and Switzerland. The platform reaches a highly targeted audience of founders, operators, and investors — over 90% of whom are based in Europe. Companies partner with Startuprad.io to gain visibility within this ecosystem and build credibility where business decisions are made. Explore partnership opportunities.

About the Host

Joern "Joe" Menninger is the host of the Startuprad.io podcast and covers founders, investors, and policy developments across the DACH startup ecosystem. Through more than 1,300 interviews and nearly a decade of reporting, he documents the evolution of the European startup landscape. Follow Joern on LinkedIn.

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