This is episode 2 of The OpenVC Podcast. In this episode, Felix Kues, managing partner of Aurelia Ventures, shares insights on their highly selective B2B SaaS program, which has helped startups raise over $250M. He discusses choosing the right accelerator, increasing success rates, and key pitfalls founders should avoid.
Harrison Faull (00:01.038)
Felix, wow, it's great to have you here on the podcast. Welcome to season one of the Open VC. How are you today?
Felix Kues (00:36.806)
Thank you so much, very well. Thank you so much for having me.
Harrison Faull (00:40.047)
No worries at all. You've got a very interesting career and I'd love to kick it off with questions in that space. So you currently run Aurelia Ventures, which is a, which runs a scale -up program for founders looking to raise funding. But prior to that, you've actually built and ran two companies in wildly different spaces. One in the fitness space, Elevate, and one in the finance space with remittances called FinEx Remittance.
So could you just take a little bit of time and tell the audience what brought you to starting those two companies? And yeah, that'd be great.
Felix Kues (01:16.039)
Sure. So actually there are more companies that are not even listed on LinkedIn. So re -openership started in high school basically back then. So I had my first kind of company with two friends from my class. We did basically e -commerce and drop shipping before, drop shipping was a thing. So before we all had AliExpress and all these kind of things, we basically actually saw stuff already from China and then basically sold it on eBay back then. So that went pretty well. But again, like high school has obviously different
priorities and scaling a company or at least for us back then. And then afterwards I did my master's innovation on entrepreneurship in Barcelona. And so obviously there was a lot of entrepreneurship and pieces in the really great school for preparing people for entrepreneurship and hopefully the uncertainties people are going to face. And then afterwards I started a venture studio or like we glorified as a venture studio was really a friend of mine very quickly prototyping projects and hacking it together, see what flies.
what doesn't fly and then you know if something catches traction within two weeks then we're going to continue it if not it's going to be basically killed and so had there were really cool company as well and then as you already mentioned moved over to India and basically started Phoenix.
Good question why these kind of different verticals, both were elevated a little bit less, but both were basically B2B applications. So I had a very strong B2B play there. I personally love the business to business model on the software side a lot. Understand the sales the best, was never a big B2C guy. And so that is really the reason why different verticals, but still somehow in the B2B SaaS space. And both companies really had the purpose of,
Felix Kues (03:03.738)
Of leaving something bigger in the world than you know, just the just the founders So it's not like when I'm doing venture or like when I'm doing companies It's always you know, we founders already commit so much time and you know all their other life basically to something and it's hopefully bigger than you know, Just the purpose of filling their wallet and so really enriches other people's life And so that was basically the rational really behind any company I would do And so with have Phoenix basically the purpose was really to help people who work in the UAE
or Saudi Arabia to basically get their money very cheaply and quickly over to mostly India. So we started with India as our main market. I mean, basically, basically, undercutting Undercutting Union. Again, like a little bit ahead of our time. So before Web3 and, you know, blockchain and crypto and everything was really in the mind of everyone. We did that already. Basically, I wanted to use the Ribbit ledger protocol for the security conversion. Really interesting experience as well. I met my co -founder through one of my classmates, Edisah.
then basically moved just to India to basically meet him and scale it there. Great experience was basically for five months in India and then afterwards a year in Dubai. So great experience. But then it was time after one and a half half to do something else. Faced obviously regulatory challenges we as young entrepreneurs couldn't really anticipate or should have anticipated. And so great learnings there along the way. And then Elevate was really the purpose of bringing more holistic
fitness or like more listing health regime to people especially in companies as well. So the idea there was you know why do supermodels and everyone get so extremely slim and you know well trained and everything directly after pregnancy for example after you know different kind of roles and the reason is they really have like basically four specialists usually at the hand it's usually few therapists personal trainer and nutritionist and potentially sleep advisor and so we're like hey you know it's a time time of AI why don't we put everything together in one application set it to corporates
potentially as well and so basically then went through the Top -down approach through corporate said they basically give it as a kind of a health benefit to their employees and did that back then in Hong Kong and then Singapore and basically started on not started on the side, but I always had a real of business and so I always usually do multiple businesses at the same time and so I have my main business which is you know great and everything but I always like to prototype stuff on weekends or you know, and so really was for
Felix Kues (05:33.018)
before we officially started for two years already kind of my side project. So my friends always reached out to me. It was like, Hey, how do I raise capital? How do I scale a company to 40 people? How do I do all these kinds of things? And at some moment, especially with, you know, you can imagine we were at the beginning of COVID back then and we had a health company that lets people work out. So really great when all the gyms are closed. We took a little as a sign to say, Hey, why don't we focus fully on Aurelia Ventures?
and really, really scale this. And obviously don't look back and don't regret it at all. It's been fantastic experience so far over the last five years. Really enjoy the work. And so basically the kind of work I always did with my friends, or the recommendations I gave my friends, and all the templates and everything we always said, basically became then more formalized and informal for real adventures.
Harrison Faull (06:26.002)
Awesome, wow, what a journey. In terms of that entrepreneurial bug that is clearly still very much a passion of yours, did you catch that from anyone? Were people in your family business -minded?
Felix Kues (06:39.592)
It's an excellent question. I would say my uncle and my father, my grandfather, they all have businesses, but everyone does something very, very different. So my dad and my grandfather both in real estate, but I never really looked much into their businesses. I find it very, it's a very traditional kind of business. My uncle is more in retail, and everyone out there are horrible with tech. I just, I think...
What predepositioned me back then for entrepreneurship is I really love figuring things out. I like two things a lot. One is systems, so how can you systemize things that's obviously beautifully run by itself, hopefully without hiccups, so this is something I can't even say I'm obsessed about. It might be the German and me who already love these kind of things. And then the other thing, really trying to figure things out. Usually, everything obviously somewhere is hard, but...
I don't have much interest besides like business and these kind of things to read this. So I'm pretty obsessed about these kind of, you know, know, things out, systemizing stuff, scaling things. And so that was always something which already like when I was eight, 10 years old, you know, really trying to get to the bottom of topics and, you know, sit on something over the night and just really, you know, dig deep into topics to figure them out. And so there was something which was always kind of part of my personality and obviously that, that goes very well with entrepreneurship. If you, yeah, if you're,
really want to be obsessed about one topic and figure it out and scale it. It's good for entrepreneurs to have that.
Harrison Faull (08:11.092)
a lot of sense. Being an entrepreneur, there is a thousand problems a day and you're the only person that can solve it and the only person that wants to solve it and everyone else is giving you problems, but you've got to maintain that resilience, that intellectual curiosity, creativity, and then also go like the practicality of actually executing and getting things done. So I think your experience being a co -founder, even from a really young age and having these companies and having setbacks as well, has positioned you perfectly to be
Harrison Faull (08:39.987)
in that venture building space, particularly probably for like first time founders and people that haven't done it before, because they're learning off your experiences and you're able to look ahead and say, hey, this might be a roadblock. So you might want to consider ABC and prepare for that potential barrier.
Felix Kues (08:42.344)
percent.
Felix Kues (08:53.287)
Hmm.
Harrison Faull (08:58.388)
In terms of Aurelia Ventures , which is what you currently do, could you give us a brief overview of what you do and what the scale program is?
Felix Kues (09:06.057)
Sure, 100%. So, Aurelia Ventures has basically multiple facets of the company. What we basically set out to do right now, five years ago, is like, hey, why, you know, the first accelerator was started, I think first, please correct me if I'm wrong, was started around 19 years ago. So it's a very, very long time.
for our industry, obviously. Still, like 95 to 99 % of the participants die. So if you're a doctor, or if you're a surgeon who's who's surgeries for 19 years and 99 % of your patients die, it's not a great rate, right? Like there must be something wrong with the system somewhere. And so obviously coming from the entrepreneurship background, went through incubators, went through accelerators went through the whole early stage, right, a couple of times. I'm seeing with my friends, obviously being really passionate about
businesses. So seeing it with other kind of line of businesses as well. I was like, hey, why don't we build something that is simply more helpful founders and how could that look like? So what would I as a founder would have loved to have? So it comes very clearly from this kind of founder problem building something for other founders. We said like, hey, a couple of things that must change in the industry. And finally, since we started it, like we saw a couple of people doing it now as well. So we really hope that there is a movement starting. So if anyone
on that business to that who's on the on the venture side and who thinks about that please reach out more than happy to share my my learnings is because the more more people follow like our kind of model or the more personalized model the more companies will basically make it and so that's obviously the interest of all of us and so basically what we have done is instead of running a cohort structure where you put basically a couple of companies into a cohort and then give all of them more or less the same kind of content also you have them with mentors and everything but you know basically the cohort and the the kind of
of colloquium is all the same, and you do that on a regular basis. There's simply, and a couple of things are wrong with that system, is first of all, it's very too short. So usually these cores running for two or three months, we define early stage as from idea stage to having raised a seed round. So this could be like, with the newest pitch book reports, it's usually around two, two and a half years. So it's a pretty long time period. The problem is if you just have a program that runs for three months, there is a very, very big delta that is simply not covered anymore.
Felix Kues (11:23.74)
sure you can reach out to the accelerator, sure you can hope that you get some help, but you are basically the old batch. Then as well, founders are, like startups are pretty unique kind of entities, right? So they're very innovative, forward -looking, they potentially disrupt industries, and then they're made up of founders who as well, these very individual kind of people who think differently, who do everything differently. And now someone thought it's a great idea to put 30 of them in the same kind of class,
classroom instruction, it obviously doesn't work. So.
What they need is someone who's basically on their side whenever they need help that they can reach out at any time, who has done it before, who knows what the pain they go through, the challenge they're gonna face, and wanna help them with their one respective issue they're facing at this moment, not with more, not with less, exactly what they need and as much they need it. So I can tell you, we have sometimes session where we speak for three and a half, four hours about only pitch deck, nothing else. And about only this one pitch deck, obviously the founders are building right now because afterwards,
their issues are actually solved and they can continue and basically, you know, operate on the knowledge. And so...
Basically what we do is we work with funders for a very long period of time. So usually we say between one and a half or two and a half years. Or basically the milestones we set for ourselves is they've raised the seed round and they either have raised the seed round, they have a million in dollar in ARR or they have 50 people on board because then usually inherently companies change. They're becoming a very different kind of more motion, which goes more towards sales and market growth. And this period is usually one and a half to two years of years. We only work with one company a month. So very clearly, like we only take one company, the program per month.
Felix Kues (13:04.542)
months so there's not more like because we want to have enough air time with each of them we want to have enough quality time with each startup and then we usually focus with them very strongly on everything fundraising rate because that's usually what companies like with founders understands the least because if they are if they haven't been a VC before or invested in a significant amount of companies before they simply can't know what is relevant in the market and we've seen over the last three years markets change very rapidly especially the fundraising environment and that's usually the thing where they need the most help was and
and then really everything, the GTM sales marketing side. So what kind of revenue targets do we need to hit? What have you seen at other companies? What works well for them in terms of LinkedIn cold acquisition? How do we sell to enterprise? How do we price our product? How do we know we are not too cheap right now? How do we know we're not too expensive? All these kind of questions they all have.
they need to figure out obviously. And so recently someone described us as a cheat code to early stage, which I like maybe put it in one day on the website because I like it a lot because that's literally what we do. We are there to save their time, stops the trial and error stuff and just tell them exactly what they need to hear. Coming from the perspective of a former founder who has done it a few times has his fair shares of hiccups and failure along the way because these are usually really great learning experiences. And now doing best we see for five years and I standing very well.
how the investment side works. And so one thing as well, like, which is, which is usually kind of an aha moment for our founders is when we tell them actually what we see is need to see from them, because we see like if a founder reaches out to a VC and ask them for, Hey, we would like to pitch our product. We're going to pre -seed seed, whatever they do. The VC very, very likely will not give them an honest answer. And that is not because VCs are not honest. It's simply, they don't know the founder well enough to be, to trust them enough to give them fully transparent view. Maybe the founders.
takes and puts on Twitter and says, wow, look at this VC, how rude or whatever it is. And so this kind of stuff is obviously danger. Then signal for all VCs usually don't like.
Felix Kues (15:06.159)
If you can look into their cards and understand all the inner workings, because you could potentially reverse engineered and manipulate the system and then get a couple of millions of investment without actually having what you need to have. And so the couple of these kinds of things, which don't incentivize both parties, like a C party to be fully transparent all the time from the beginning. for us, it's a little bit of a different game because we understand how the site works very well. And so we're not always sharing all these kinds of secrets, how, you know, others have invested as X or this investor as Y.
but it's like, this is what they wanna see at the stage. You need to tell them in this kind of structure what they need to see. This stuff doesn't matter what you think right. The next three slides, you have a new pitch deck, really don't matter, put an appendix, you need to have this right now. And so translating the kind of pattern recognition that VCs obviously apply at the beginning to how the company looks in the beginning, and then they basically can go on much more successful conversations. And so for us as well, it's another way, I'm not sure if I should share that publicly, but for us as well, it's a great way of building introductions.
meaning when we reach out to one of our, one of our VC we don't know yet, and we say, hey, we have a portfolio company that is raising, then this is a much more relevant obviously introduction than if the portfolio company would just be one of the many, many cold outreaches. Like we're getting, like I in my personal email inbox get around 20 to 30 cold pitches every day. Like.
It's overwhelming. And so what do you do, especially on the early stage, which is not series A, series B, or growth stages, what do you do at this moment? You apply pattern recognition because it's too much content to significantly cope with. And so founders are always very surprised when they say, hey, the VCs only look at my deck for a minute or one and a half minutes. Like the last DocSend reports, the VCs look at the deck like two minutes, 10 seconds, something like that.
It's not that they spend that much money to really understand the company holistically, no. They're looking through it very quickly to do pattern recognition, understand if it's something for their fund because they're very very niche, and to move it forward or not. That is the only thing that needs to be answered, and that can be answered in two minutes. So yeah, there's a lot of translation between this side and that side, and you know, know, being extremely transparent with our founders obviously there.
Harrison Faull (16:53.88)
Mm -hmm.
Harrison Faull (17:18.938)
Thank you. There's a lot to unpack in there, but there's a lot of good advice as well. So I think I'm going to bring it back to the health analogy that you mentioned earlier and how accelerators historically have not been very good at saving their patients or keeping them alive. So in contrast to that, Aurelia, you're almost like a precise surgeon. So you've cut your teeth in B2B. You've had two startups in that space already. And then you stick with your patients for one and a half to two years.
Whereas other accelerators are actually only sticking with their patients for two months. And that combination of expertise and the right help at the right time is a key differentiator that I'm quite, I'm very, what's it? It seems like a really unique combination of factors that isn't replicated by many other programs at all. In fact, that might be the longest incubation program I'm aware of.
Felix Kues (18:15.086)
Potentially, we should put that on the website as well. That's a good sense. I like that
Harrison Faull (18:30.266)
When it comes to the startup founders that are looking to apply to Aurelia, what are you looking for? What helps people stand out at that early stage that really makes them really makes you want to get involved?
Felix Kues (18:45.55)
Yeah, excellent question.
Felix Kues (18:52.464)
The program as we run it right now, really resonates well with founders who have usually a little bit of startup experience. So that could be a little bit too a lot of startup experience. So you can tell your usually teams that.
that have usually done a company before too. We had founders that have previously exited for significant money so the next generations don't need to work anymore but since if you do it once you're really addicted to it and so you're gonna do it again. It was really fantastic exits and so the founders that they come to us, they know they need help.
They are aware of all the challenges they face. They know industry is changing all the time so rapidly and they need someone who gives them the TLDR to everything because time, especially right now with all the Gen AI boom and how quickly companies come up right now, how quickly business models are developed. Time is even more on essence of as it was pre November 2020 when all our world picture of world view was basically disrupted by a chat GPT goes live. And so it's even much faster right now. And so when the
Coming to us and what do we look at? We usually look at founders. One of the critters we have is they can build inside. So they can build inside of the company. They have a CTO founder, tech founder, someone who, even if they would have not any money, they could, with time, build the product for the sleeper themselves. There are always elements sometimes that you say, hey, I don't know, I have someone who does this database for me or whatever it is. Or like we have like an external data scientist, fine, completely fine. But the reason is if the company face difficulties, and they will face,
difficulties as every early stage company will do it.
Felix Kues (20:34.738)
We can't rely on an outsource team or potentially capital. They need to distribute or like if they need to have $50 ,000 to bring the company forward, otherwise it dies. It's a really, really bad thing to have if you're an early stage founder. So computer and CDO founder there. Another one is a everything else founder call it a CEO, CEO, CIO, whatever they want to give them for title. Basically someone who does everything else from fundraising to business, to marketing, to sales, to potentially legal accounting, whatever it is, someone who keeps the company.
together and running so the CTO can really fully focus on building the product and the everything else founder who's busy out there gets the insights potentially from the POCs from the early customer conversations is like hey dear CTO this is what they tell me what is really really important can we incorporate it how long does it take to develop so these two elements need to work together and two is great and three founders are awesome as well we originally have a company and we took them both really really awesome guys as well therefore
Very strong engineering background works really really fantastically well So that is one thing so they can build internally and they can scale it internally without external help Another ones a need to understand the industry they're building in on a level
that allows them to have understanding of the underlying dynamics. So I can tell you, we had one company we spoke with, and they're coming from private wealth and consulting, so we're at JP Morgan before, for the last 10 years. They understand something about wealth, or like wealth management that potentially not many others understand if they just want to do a fintech startup or something like that. So they have insights into the industry that other people don't have, so that allows them to decipher
the kind of things and tailor the product in a way that nobody else would not have this kind of background could do it. So these two things are usually most important for us. Since we are very early stage, so usually meet founders without funding, if they have just raised an angel round, if they rushed us to the small pre -seed. So these are usually the kind of stages where meet founders. There's so many uncertainties in there. And even for us, as someone...
Felix Kues (22:42.481)
We recently went to our backend and looked into the AI. And so over the last five years, we have done than 1 ,000 interviews or introductory calls with founders. We got a little bit more than 5 ,000 applications. We did a due diligence, I think, on 2 ,500 companies back then and 440 portfolio companies now. So we have seen a lot.
And even with all these data points, and we are very well at data drift, we track a lot, we understand, okay, why did the company, where did we reject the company? Why did we lose a company? Like we track everything in there, like, because at some point we want to go back and say, okay, this company is doing fantastic. Well, what did we not see here? And this is usually like, it's a terrible thing when someone in slacks puts about like kind of a tech run, I guess something about a one company was like, man, I remember that name. What are they doing? And then you basically go back and you check them. I was like, why did we not see this? And so.
So it's always good to reverse engineer and see where you have blind spots. Nevertheless, early stage, there's so many things that can come your way that you don't know, your investor doesn't know, nobody can anticipate them and they just come. And they just get faced with it. So we try to do our due diligence as perfect as possible, but there is always an inherent early stage risk that you have simply at a pre -seed stage that every company has.
Harrison Faull (23:58.558)
I think that's part of the beauty of the game. There isn't a formula, it's not a mathematical equation. There is this level of uncertainty and everyone believes that they have an edge and that's why they're sort of playing the game because they think they can beat others. And actually there are things you can do that will increase your chances but it won't ever guarantee outlier results.
And by the way, just following up on that, the kind of edge that is something we usually see from first -time founders or when they come from tech corporates where they're very, very senior positions. So if people who were directors at Google, Uber, Airbnb, all these very, very high -level people, recently as well, someone else was before the CTO at one of these tech companies. So very, very experienced people, very high level. Now they're doing their first startup.
The problem what we usually see with first time founders, and I don't want to call it ignorance, it's maybe just a level of I don't know what it actually takes that gives them a certain kind of naivety to it, that they are very, very confident how things will turn out. And...
the higher up the hierarchy you were before, the more confidence you have that it happens. So some of you see people like without any founder experience, they haven't done one company before. They might have rolled out projects internally and scaled like internal initiatives and then they went live within Google. All great. The problem is just if you're doing this, you have close to unlimited resources. You have the best engineers that obviously all work at Google or at these tech companies. You can pick,
these kind of people, you can just run it internally and then surprise everyone wants to hear about it because it comes from Google. You know what I mean? Google is running something new. Wow, you get all the TechCrunch coverage now? Great for you. So they have all this kind of success and gives them even more confidence. Now they're going out the first time and doing it by themselves.
Felix Kues (25:55.951)
And there is no Google name anymore besides on the LinkedIn as a past position. Engineers are not like, you know, sending them emails every day or we want to work at your place potentially for free because then we have it. So they need to pay salaries. They don't have unlimited resource anymore. Customers don't take calls with them or maybe take calls with them, but just because they want to see who is that guy or girl. And they.
They think all that kind of stuff is traction very similar with VCs by the way. VCs love having first conversations. They love them because they would rather be two years too early than a week too late on a deal. And that's the reason why they take calls all the time. And we like we quite frankly do that. Actually, we are quite rarely doing this because we meet them already so early. But I know CPCs they're taking calls at a pre -seat stage simply to get to know the founder. The more...
The more high -level companies they have on their LinkedIn, or the better the universities were where they went.
the more likely a VC will take a call. That doesn't mean this is an investment. Meaning we see Stanford grads who went to Google and all these kind of things, VCs are queuing up to have calls with them, but that doesn't mean they will invest in you. Just because they take a call, it is not a signal. If you have a term sheet, if you have the money on your bank account, that is a signal. But everything else is just noise. And again, like, have never done a company before, first time founder, doesn't know what to look for. All this stuff looks like
signals.
Felix Kues (27:28.654)
they get extremely confident. And then we usually see them hitting the floor pretty hard after some time because maybe they're able to raise like a million dollar from some people who angels who say, wow, ex -Google, great, let's give them the money. But they are not able to achieve some milestones that are required for institutional investors and institutional investors are private equity firms. At some moment, they don't care where you come from, which university you went through. It only matters if you're able to build successful companies. And then they usually, you know,
getting the first kind of success feeling and then they basically fail the companies and we see that actually quite a lot and yeah and so trying to communicate a lot of time to them sometimes they listen often they don't listen and that's the reason why more experienced founders are usually resonate with our program better because they know what they need and they're very quick usually on executing they don't waste any time on these things.
Harrison Faull (28:21.055)
That's really insightful. And actually speaking to some of my friends that work at the likes of Amazon and Google and the number of hours that they actively work during the day and the free breakfasts and the free lunches and all the perks that they get. It's the polar opposite of being in a startup where 99 % of what you do ends up in resistance or no or fails. And even just staying positive beyond having a monetary success, it's a very different mindset to have that resilience to leave all that.
Harrison Faull (28:51.359)
comfort and actually hit the uncertainty that comes with being a founder and everything that can go wrong. So.
Felix Kues (28:56.078)
Yeah. Like I would much more bet on someone who joined a startup as like.
Employee five six seven eight nine ten went with them through the whole pre C2 series B growth and was potentially on their sales team someone like that is Amazing for us because they saw how the growth actually works from the beginning from Scrappy was no money every like nobody knows us like we need to sell to enterprise somehow all the kind of issues They're facing there There is someone who understand the kind of hustle and saw the challenges that a company potentially died multiple times along the way and
And have this kind of learning experience even if they're not the founder that would be a farce much more They have much more muscle memory in these kind of things then someone who was I don't employ in about twenty five thousand nine hundred eight at Google because they haven't seen the kind of early stage growth they need to apply right now at the pre -seed stage because each stage is so different even if they did Series C suits to series D on the gross department. It is so different than pre -seed to series a
and you can't apply what you know there to the early stages. And so, yeah, that's kind of things we're looking at. Long answer to a very short question.
Harrison Faull (30:12.063)
I completely agree. I think you're bang on. In terms of founders that do need help, that join the program, are there any examples that you can share with us of how Aurelia has changed or dramatically increased the chances of success for some of your portfolio companies?
Felix Kues (30:29.936)
Yeah, we usually see it with all the companies like and Every company that comes to us comes usually was an issue like they have something that is happening right now It's not all sunshine all the time because it's early stage. So they're coming to us and say like hey just raise a pre -seed
Somehow I need to reach the seed round. I don't know what it takes a seed round. I don't know how to get there help or I Talk for the last one month to investors. We have a lot of calls But for some reason everything is just stopping like what heck is going on here? So there are a lot of these kind of they usually come to us with fundraising challenges or okay now we need to execute sales growth or like sales goals on our on our promises that we made to investors and so
Usually that takes us.
There's no ramp up period where you say, cool, you know, the first week, you know, you get the community, the second week, we have like, no, it's usually immediately hands on, full on, one company, okay, share everything with us, what do we have right now, what are the answers you're getting, who did you talk to already, what is the feedback you're getting, and just really, as a founder basically would do it, go full on in and say, show me your deck, what is the data room, and basically do a 360 deep dive and
everything, if it's fundraising, for example, in everything they have because the 100 % somewhere red flags, we see somewhere it's a financial diligence, basically discover, maybe the legal things which already give us kind of a headache, but we know we can fix them, so that must be fixed. And so basically just looking from the perspective of investor on a company and telling them this is this, that needs to be changed, the deck here, we need to change this message, use this, like basically doing, like looking over everything and changing a lot of things they basically haven't done before.
Felix Kues (32:17.682)
Because how would they know like they simply can't know if they're not VCs and so Doing all these things getting all the ducks in the row and then basically starting the proper outreach Like properly there so the ways of creating momentum obviously for startup about like sharing very good news having the investors who maybe said no still in the loop like there are a lot of these kind of ways and and kind of strategies around that to to basically do a fundraising really really success fully and it's usually just Putting all the pieces into place which are right now
not just scattered all over the room basically. And so yeah, we had the companies that come to us and said, okay, for some reason I don't get any calls with VCs. And we look at the deck and it's extremely technical, it's way too technical for the first deck. And so through the whole deck, out of the window, did it from scratch. We had to do our deck designers and everything on board obviously. So.
Things that look pretty, you know, are usually either to digest or, okay, and the information are just formatted in the right way. And boom, now they have like all these, all these kind of partnership meetings immediately. The next call is, I don't know, this VC, we spoke with them, they don't get back to us. Like, or like after the first call, they tell us, yeah, it's not a great fit.
When we do introductions to VCs, they usually tell us as well, hey, it's not a great fit because X, Y, that. We obviously don't like, on the one hand, we want to have obviously very strong network with our VCs, on the other hand, obviously we want to help our founders. So we give them pointers, what could potentially be the reason why other VCs don't say it. So no straightforward kind of answers because they don't have trust with them, but we know to a certain extent how much we can trust all of our founders. We know them, we work with them on a nearly daily basis on all these kinds of challenges. So we have a different way of translating what the
really has for an issue to hey look at this right now and in that way they're getting information they would never get from anyone and that can basically optimize their process and basically run through it and so it's usually that we're unlocking certain kind of correlations they will have we're unlocking introductions they will not have and then as well just bring the whole process with a really strong partner who's doing it for five years basically to a successful end. With sales and marketing it's a bit different.
Felix Kues (34:27.282)
It's more like...
Founders have a broad idea how it works, something even very good idea because they have done it in previous startups, but they more coming to us as like, hey, how do other startups do this right now? Like I have sent out so many emails and for some reason it's not working. And then we have email deliverability on experts on board. So they do the technical setup of email and domains, for example. Obviously there's a ton of going and what are keywords in subject lines that immediately brings it to a spam filter. So there's so many kinds of things they simply can't know.
very often don't know that we say, hey, this worked at company XY that a month ago. Why don't we apply this here? And surprise, it works there as well. So it's just being this kind of swarm intelligence together from what we see from all the other companies at the same stage, what are they doing over all the last years? And basically taking all this knowledge we acquired over the last, with so many companies over the last years and putting it immediately to work on one company. And obviously it accelerates everything.
Harrison Faull (35:28.351)
get that if you need to. Yeah, yeah, yeah, cool.
Felix Kues (35:29.745)
Yeah, can I? Okay, thank you. Give me one second.
Felix Kues (36:23.217)
I'm so sorry, back on track. That's awesome.
Harrison Faull (36:24.582)
No, that's absolutely fine. It's the beauty of the podcast. It's all gone in the editing. Okay. So let me just cycle back into your answer. So I really resonate with your insights on pitch decks being too complicated and founders trying to throw everything into their first approach to a VC. And actually in reality, the decks, they're read by the associates, the analysts.
sometimes the interns because VC funds get so much inbound and they're just doing the noise filtering and these guys aren't technical experts so you do need to just hit some of the basic requirements be able to explain your idea clearly within the first two slides things like that really help you get in the door and if you don't do it you can really you can be harming your own success in your ability to get in a first call.
actually you also touched on email spam and domain authority which was one of the major reasons why I think my first startup failed flat on its face because I'd never heard of those things before starting and my web design agency hadn't told me about those things but I was quite reliant on it and yeah that's still a bit of a sore point for me but it's an example of how people that have been there and done that like yourself built companies that are now doing
Felix Kues (37:27.729)
Felix Kues (38:01.777)
No, we have a startup program. We don't want to call call Accelerator Incubator because it immediately brings this kind of three months programs to work, but it's basically a startup support program for like, startup program for like two and a half years. And we do invest as well along the way. So we do invest as well in preset and seed runs of our founders. So we do as well as investment investment but it's really like companies usually come for us, for the support and for the kind of insights we have from our startups.
Harrison Faull (38:04.455)
Okay. Okay, start that program.
Harrison Faull (38:29.607)
Harrison Faull (38:37.608)
terms of deal flow you are or Aurelia is an active user of Open VC. Have you guys seen any good deal flow from the site? Have you made any approaches or investments from deals that you've seen on there?
Felix Kues (38:55.248)
We can't obviously give away all of our secrets, but like now jokes aside, now OpenVC has been actually a fantastic source for us, to be very honest with you. We, that's a good question. When did we start it?
probably around six or five months ago, looked into it more intensively and now basically using OpenVC nearly on a daily basis through like sourcing, reaching out, companies find us as well. So we even internally, as I mentioned before, we are very data driven. And so...
It sounds obviously funny when I'm saying that. We obviously track where companies come from. So we do these kind of source analytics. That should be, by the way, complete basic for any company, but that's part of the overall data. And so we even have two kind of sources. So we have usually the kind of source that cookies give us or, found us put into the application. So like, Hey, I heard from you from X for that, but we have as well own property. It's called track source. And that's basically only filled out by us. So we actually figure out where someone comes from, because if many often,
Like many times founders come to us and say like, yeah,
the founder recommended you or whatever it is and then we ask who's the founder, I was like, I don't remember. But before, because they're not even better alumni, so a portfolio company recommended us and we asked which one and they say, I don't recall anymore. So they're trying obviously to get like a foot step ahead by saying, hey, we have like a warm deduction, which is not necessary. For other, it would be much easier to just tell us where you come from and that, you know, there is no, if they're not coming through a scout, which is a completely different avenue basically into our deal flow,
Felix Kues (40:30.418)
then yeah, this usually doesn't make a difference. So...
We basically have a tracked source there which is OpenVC inbound and OpenVC outbound. So we even have these kind of tracked sources because we really wanna understand, hey, where do we get more and more high quality flow out if we reach activity out to someone or if we get get and they find us on OpenVC. So OpenVC has been a really fantastic kind of customization platform to be honest. Sounds so startup like. We meet great founders basically.
Harrison Faull (41:03.211)
That's a great testimonial, thank you very much for sharing. Yeah, that's great. And just coming back to Aurelia Ventures what's the pricing structure for the founders that are curious? So it's one and a half, two year program, they get one on one loads of time with you guys.
Felix Kues (41:14.384)
Mm -hmm. Yeah. Yeah.
Yeah. Yeah. So what you usually see, so how do we work? The founders who come to us usually don't need $100 ,000. And I'm saying this not with an arrogance that money is not important at the beginning. It's more, they worked before at Google, exited before. Maybe they just worked in a different job for a long time and have savings. The founders who come to us say,
I know I need help. Like I want help. I want someone who has done it on a repeated basis all the time. And I need the kind of insights, but I don't want to give up 8%, 10%, nine, seven, six, whatever it is in an internal Accelerator incubator model. Why? Because if you give up 10 % before your pre -seed round and you seed round, 10 % is worth around one and a half million US dollars. And usually our founders go on seed rounds after 12 to 14 months, like from joining the program. So in a year,
you could have saved one and a half million dollars by not giving up 10 % that early. And they know that because they have done it before. They're not the first time founder. They understand what it means, how much equity is worth. And so we're coming from the perspective of what are all the other actors out there?
So incubators, accelerators are usually between six to 8%, and so they give some capital, but again, often the founders don't want capital, they don't need capital in this moment. The $100 ,000 is not worth enough, the $100 ,000 in comparison to one and a half million is not enough value for them, easier said. Then you have all the kind of...
Felix Kues (42:57.554)
I call it startup introduction, fundraising people who do like startup fundraising. The fees usually vary between three to five percent of your raise. So they help you to raise a million US dollar, they get 30 to $50 ,000 from that. So it's usually a ton of money. Many of them are not licensed, so you need a broker dealer license in the United States for that. It's SEC regulated. If they don't have the license, the startup and the finder, referrer, broker, however you want to call them, can get in significant trouble for that. So the
So success model is obviously there, more predatory than anything else. And we came from the perspective of saying, hey, how much would you give up to three advisors at your current stage? And it's usually around 1.5%. First of all, it makes a ton of sense for founders to understand, hey, three advisors, best case, I speak with them one hour on a week end. And now on the other hand, I get from our adventures.
60 mentors 250 VCs in the network 140 portfolio companies baked in knowledge for the last five years of just doing venture and eight years of before doing my own startups getting all this kind of stuff on a personal base for two and a half years For only one and a half percent of the company and they're like, okay Wow So here's this right now the real value exchange and it's funny because sometimes we have founders that comes out as well Okay, cool. So every year, you know get like one and a half percent from us was like no no one time. It's not yearly thing. It's
It's not an recurring, it's a one -time thing. They're like, what, how do you do this? And so it's a lot of work and you can only do it, huh?
Harrison Faull (44:28.428)
It's sweeter than that though, right? It's sweeter than that though, because you actually also invest. You're not just taking the equity, you're doing pre -seed and you can, yeah.
Felix Kues (44:34.162)
And we can invest as well.
For disclosure, we don't invest in all of our companies, but we can invest in them in the pre, like, we have capital to invest in them in the pre -seed seed round. There is no requirement, if they don't like us, they don't need to take our investment, so there's no, you know, kind of clawbacks or like, you know, options or whatever it is. But usually our partners are so thankful, they say like, hey cool, you guys are really, really awesome, you helped me already, do you want to participate in the round? I was like, yes, sure, obviously we want. And so, and that's basically where the one and a half percent come from. And we, through the last couple of years, we obviously, we track very intensively how much time,
spend with companies is fundraising. What do we do on a fundraiser? Positioning, strategy, valuation support, whatever. So we track each element we do with a company and the time we spend on it. And on average, we spend around 600 hours with each company. So you're getting a fully dedicated team on a passive basis on call for 600 hours over the next two and a half years. We know how to guide you through the next kind of significant fundraising rounds for like one and a half percent of the company. We even think about like increasing that to be very
very frank with you, because it is a lot of work. There is no question, and that might be as well the reason why not many other people do it, and obviously running a cohort kind of structure was like, you know, always the same kind of content in the ending. Pairing mentors, it's obviously, if you break it down to the single company, it's obviously much less work than working with them on a personal base for two and a half years, but I personally like the early stage house, so maybe it's, I don't know, mental disability I have, like I really like this kind of, you know, chaos sometimes, kind of a little bit of anarchy there, it's kind of,
work you're doing with them and I'm just really really passionate with it and that's the reason why we build it in this kind of way.
Harrison Faull (46:14.989)
You'd expect it to be priced as a premium product, but actually you've gone to the market, you've understood what it takes to win and convert these extremely, what it takes to get these founders that are actually top class and found a win -win situation. Well, it seems like a really well -priced product and I'm not surprised that you get so much inbound and you actually get to pick. So, I mean, just to, set expectations.
Felix Kues (46:29.809)
Mm.
Harrison Faull (46:44.365)
So that sets expectations for people applying. On your website you say you might take one company on a month and actually sometimes you might take none. Yeah. So it's a very exclusive program to get into.
Felix Kues (46:51.632)
And then...
Yeah, but we don't want to make it exclusive. Like it's not meant in an exclusive or elite way or anything like that. It's simply our promise to our founders to have enough airtime with everyone. Meaning there's certain things you can't scale. You can scale and certain automations, certain kind of knowledge transfer and everything, but having the time with someone who has done all these kinds of things before in a call, speaking with you, and potentially this call takes like three hours because we need to deep dive so deep into that.
and kind of topics, you simply can't scale. So if I find another person like me, I could reproduce myself, but then we would have two eggs, then we potentially take two or three, like two companies on board per month. But.
It's simply the promise of the companies that we have in the portfolio that we tell them, hey, tomorrow we're not going to take 10 companies because that would simply limit my time to an extent that I wouldn't have enough time with you anymore. And so it's something which just from my understanding of how I would like to do business and how I do business, it's just extremely fair that you stay loyal and honest to the companies that committed to you obviously, and that you're fulfilling the promises you give someone, especially in such a volatile, fragile, early stage. And so that's the reason why we take one company or none.
Harrison Faull (48:09.038)
It's really refreshing to hear because the amount of accelerators that are actually predatory and don't add much value at all to their portfolio companies is scary. So say there's a founder listening who's not in B2B at the moment, but they are considering going into an accelerator. What are the top three factors that you'd recommend they consider when selecting a different accelerator program? The ones that actually make a difference that founders might not be aware of when they're selecting.
Felix Kues (48:18.032)
like.
Felix Kues (48:36.143)
Yeah, yeah. Questions we usually get as well, which I like a lot, is what is the success rate? How many of your companies have gone on to raise a pre -seed or seed? Whatever the goal of the startup that applies. How many companies of your total portfolio are dead? Like, this is usually something to know as well. Because you can get these kind of numbers, for example, from PitchBook, but PitchBook, I think.
It's like 20 ,000 more for three licenses a year, so it's not really cheap. And so founders usually don't have pitch book access. And so you could just go there and type in an accelerator name and you see exactly how many companies died. And it's very often a completely different picture from what you read in the news. And you see all these big brand names, but it might be one or two out of a fund. So ask these kind of questions, how many actually go on and do something successfully.
Read the agreement in detail, including all fine print, and make sure you understand everything in there. If it's a 20 page agreement, try to make the effort and understand it fully. If you don't understand something, Google it. The due diligence you do at the beginning is so much more worth than you're gonna do afterwards. I can tell you that we have a pretty good overview of what's out there. And so we're seeing regular as well agreements from other accelerators on our table.
And there was like one program. It's not existing anymore. They went out of business, I think a year or one and a half years ago. And so we saw their program and it has terrible clauses in there, terrible. Something like, if you join our program and how was it? You have raised in the last, are you not raising in the next three months? We can invest at your previous valuation in a year or something. So let's say this company is not raising in the next three months.
the last valuation was a million, then they can invest up to $500 ,000 at a million. So they can buy 50 % of your company if you don't raise the next three months and next higher round. And so there's so many of these kind of terms out there where you're just looking at things like, holy smokes, how can anyone ever say that? But then again, you have the founders who simply don't know better. And they first time founders potentially,
Felix Kues (50:58.48)
They're only here to the promises. They don't read the agreement and then they're just out and they just sign this kind of stuff and that that many people come in anyways out of business now, but the other companies as well there Well, we have something like we saw that recently You are on our program for like three months And then we have the chance you're not allowed to go to other VCs or investors or any other capital person and race from them externally Then you have the streamers are coming to an internal review then we have the chance to invest in you and then you're
to go out there. I was like, holy smokes. They tell me that I'm not allowed to raise capital for my own company and I signed this off. It's like, it's mind blowing to me. Yeah, but there's a lot of this kind of stuff out there. They have obviously amazing programs out there. They...
Harrison Faull (51:43.921)
Wow, well that was a really valuable masterclass. I think in the last three minutes you should help a lot of founders thinking about joining an accelerator avoid a lot of mistakes. I mean, as a general rule of thumb, make sure you read your contract and understand every sentence because they're designed sometimes to trick you. And so if there is a bit of uncertainty about a clause, it's probably not for your benefit.
Felix Kues (51:49.776)
Ech. Ech.
Felix Kues (51:59.792)
Yeah. Yeah.
Felix Kues (52:06.353)
Yeah, yeah, and these are sometimes huge accelerators, right? I know accelerators that have like 500 plus portfolio companies, they have these kind of terms in there. So that's the reason why founders should, like.
I usually know a problem because we tell them exactly these kind of things. For example, one thing as well, which we didn't speak about it right now, and obviously we were running a little bit over time, but so one thing, for example, founders usually don't understand is they're going out there on LinkedIn, seeing a post, pre -seed rounds are on average right now one and a half million. Or like one and a half million on a...
on a 15 million valuation or 14, whatever it is. There always is kind of really, really great statistics out there from people who are either too lazy to really slice the data or simply just want to have spectacular headlines because, surprise, it brings engagement. So if we would be really, really honest, and I would say, hey, I have a
B2B SaaS infrastructure company for enterprise and I'm falling into the enterprise SaaS model and I'm falling into the infrastructure model. So I need to understand what, and if I'm in the United States, I need to understand what those companies raise in the United States over the last five years. And so we have founders that basically aren't coming into our problems, like, yeah, I'm doing a pre -suit right now, my valuation is only 11 million because the average is 14, so I'm cheap.
The problem is just this is not reality because they're mixing together B2C dating apps with like Anthrophic or something like which the variety is just, okay, Anthrophic didn't do a pre -seed but you get the idea was that companies that are so massively overfunded right now, you're already on a pre -seed stage. And so, and average just means you're taking all the values together and you're dividing it by the numbers of your data set and that is the average. So if you look for example for the median and the average, you're gonna see that the average is one, one and a half million of the round, but the median,
Felix Kues (54:01.202)
is on $500 ,000, meaning 50 % of all companies haven't raised more than $500 ,000. And then you have these massive outlets which are just dragging the average above. And this is the same with the valuation. And so now we have companies, I told us we are cheap on a 10 million valuation. We told them do an 8 if you want to have a combination. And now they're getting term sheets for 7. So like.
Harrison Faull (54:22.418)
And that's probably still in the top quartile for similar companies in that space. And that's what it's all about because that's what VCs are comparing you to. They're not comparing you to the average. They're comparing you to what else they can buy at that price.
Felix Kues (54:27.536)
Yeah, exactly.
Felix Kues (54:36.303)
Exactly, and then they don't understand many founders don't understand how public markets how LP sentiment right now plays into fundraising strategies like we have it right now We're in a situation of an oxymoron meaning we have the most dry powder So money that investors can invest in this year the most we had in human history in the United States It is so much money. I think only an early stage venture capital. We have like 350 billion US dollar. It's so much money. So when I say hey cool There's so much money VCs need to deploy and we can raise right now very easily no because
LPs the people who invest in VCs don't invest right now in VCs and very very careful of doing follow -on investments because we have seen all the 2021 madness that all these companies surprising right now I go out of business or do down runs or something like that because it get massively overfunded two years ago so a piece don't deploy and what do we cease to if they're not sure if they get more money in the future and they're sitting right now on my they're holding on to it and that is the reason why fundraising right now is so difficult because but
Harrison Faull (56:20.946)
When I give advice on pricing for pre -seed and seed rounds, founders always want the highest valuation that anyone's ever got because they don't want that dilution. But a way of getting there is actually having a bidding war and having other VCs outbid each other and compete to get into your round. And a way of triggering that bidding war is actually coming in at an attractive price initially, having the confidence that you're not going to sign on that valuation when all's said and done.
But a lot of founders don't like that approach. It's...
Harrison Faull (58:34.162)
No, fair enough, fair enough. For the founders listening that want to get in touch, they want to apply to Aurelia, where can they find you?
I'll link that below so people can find it and access it really easily. And yeah, it's been amazing to talk to you Felix. I think we've got a lot of wisdom from you. It's clear to see that you are top tier and you're running one of the best accelerator programs in the world.
