German angels have landed in San Francisco.
Angel investors, that is: Point Nine general partners Christoph Janz and Pawel Chudzinski are bringing their early stage, SaaS-centric startups to San Francisco in order to be closer to the action.
The duo launched Point Nine in Berlin in 2009 because Janz saw firsthand how difficult it was for European startups to raise early stage capital. European investors are loathe to pony up seed rounds in excess of $1 million, Janz said, preferring instead to open wallets usually to the tune of $200,000 to $300,000. Hardly enough for even the best startups to get their legs.
In the States, seed rounds — especially lately — often exceed $1 million.
But not in Europe.
“Angel investors are much scarcer in Berlin and Europe than they are here. There, it’s much harder for startups to raise funding, and its harder there to raise capital at any stage,” Janz said during a recent sit down with VentureBeat.
The quiet-spoken, spectacle-wearing Janz, a successful entrepreneur and startup founder who got his chops honed in his teens trading Commodore 64’s to friends and likeminded clients, founded Dealpilot, a comparison shopping website, in 1997. He made serious money when he sold a large percentage of the startup to German media giant Bertelsmann in 1999 for around $30 million.
After he started and sold Pageflakes in 2008 — it was a platform that allowed customers to build home pages with custom dashboards, RSS feeds and weather widgets — Janz was wondering what to do with his life. Then he stumbled upon a Danish firm called Zendesk, a leading cloud software play specializing in customer service operations. He became an angel investor.
Point Nine has two early stage funds focused on the consumer side of startups. Fund 1 is about $10 million, while Fund 2 is nearly $60 million. The firm has seven employees, and managing partner Pawel Chudzinski said Point Nine was spun out of Team Europe, a Berlin-based incubator and funding operator.
The average Point Nine investment is about a $1 million.
So far, Point Nine has managed to get almost all of its portfolio companies to open up offices in San Francisco and the Valley, with the exception of Clio, a Canadian SaaS software platform focused on law firms. Cleo is staying up in the Great White North — for the time being anyway.
The list of Valley-bound Point Nine companies includes Denmark’s Zendesk, now situated in San Francisco; Algolia, a Paris enterprise software play targeting developers, which is in the process of moving to the Valley; ShiftPlanning, a Panamanian business management software startup, also en route to San Francisco; and Vend, a New Zealand POS software company with personnel now working in San Francisco.
A major lure for Point Nine is what the duo said was access to the best salespeople on the planet: Americans. While Europe has some of the best engineers working in tech, the Europeans lack what the two said was a killer instinct to sell, and sell successfully.
“When European partners want to scale up sales, its very hard to find them in Europe. We feel Americans tend to be the best salesman,” Chudzinski, who was born in Western Poland, said.