START Summit : Interview with the VP Investor Community of the biggest Business Angel Network in Switzerland

Julien (nonoise.cub): And live again from Start Summit Saint-Galen, I'm honored to welcome today Steffen Ehrhardt from SICTIC, the most active business angel network in Switzerland.

Steffen Ehrhardt (SICTIC): Yeah, yeah, yeah, again

Julien (nonoise.cub): Hi Steffen, thanks for being here. Good morning. So what about the conference today? Do you enjoy that?

Steffen Ehrhardt (SICTIC): Good morning. definitely enjoyed it. like definitely one of the highlights in Switzerland when it comes to startup conferences, one of the big three here. And what's exciting to see that this year's a lot more international people here. Yeah. Because you can see that attractiveness of the Swiss markets, like reaching like not even just UK, Germany and France, even the US. And lot of people try to understand what's going on here. And yeah, it's a great success for the country. entry.

Julien (nonoise.cub): quite active on the startup side. hear that Switzerland is one of the most active founder market as well, a of Swiss founders anywhere and international founders going to Switzerland. What about the business sector? Is there strong culture of investing, of VC, of investing in startups for many years now?

Steffen Ehrhardt (SICTIC): it. It's unfortunately historically not that well developed. It's like in the process to grow, we're like doing a lot of educational efforts. Like we wrote a book, how to do angel investment and that it's not rocket science. And it's just like trying to understand a of the dynamics. And it's obviously very well established in the U.S. and Europe, UK is maybe a bit ahead of the game, but it's like for us, just like the huge gap to close between the U.S. and what we see right now in Europe is a fantastic opportunity. because a lot of startups just need a first initial certain amount of money to get started and that luckily becomes less and less of a problem. Obviously you need to have a great team, great idea, but business angels can really help a lot of people to make their ideas reality.

Julien (nonoise.cub): And what round do you, what phase, what round do you join with your network?

Steffen Ehrhardt (SICTIC): So usually very early on, like from pre-seed, sometimes seed as well, where business angels can have the most impact. Because it's not just about the money. So a lot of business angels invest in startups because they might have the industry expertise and really believe in this product and idea, and they can add a lot of value. And even with regards to, for example, hiring, if you work like for Roche Novartis and Co, you probably know a lot of great people in the industry. And when you have a MedTech startup trying to find the right profile, fall, those angels then potentially can help you.

Julien (nonoise.cub): Do your business angels invest in European startups as well or mostly in Switzerland with a patriotic sense of defending Swiss startups?

Steffen Ehrhardt (SICTIC): It's actually quite interesting that a lot of Swiss angels definitely prefer investing in Swiss startups. Like I'm an angel myself, I invest globally in startups whenever this great idea, great team. But there are certain dynamics here that are quite like interesting. The survival rate of startups in Switzerland is way higher than it is in other places. Just to get started is like a lot easier here. It's not just like because of the money, because like finding the first, I don't know, 50, 100 K is a bit easier in Switzerland than it is, I don't know, in Eastern Europe because of the money that is in the country. But it's also about the infrastructure. Like, an example, in the food tech space, if you're a startup, you're ETH student, you can leverage and use an amazing facility that has a value of, I don't know, a couple of million, including incredible professors. That's an infrastructure that, like, if you're, I don't know, somewhere else, and let's give the example of Eastern Europe again, you don't have that. You have to build it on your own. That requires a good amount of money and here there's a couple of those kind of advantages in several areas that help start up to get up and running and that's kind of a yeah, you can say maybe unfair advantage, but the infrastructure is really helping. it's angels. Yeah have like are easier to convince to invest in them.

Julien (nonoise.cub): So many, because not just about the money, but about the facilities, you try even to attract these international founders to join Switzerland, to join here Accelerators School to partner. Let's speak about impact investing. How developed is it? And I think you have 400 business angels in your network. Correct, yes. Even more. What's the ticket size you do invest?

Steffen Ehrhardt (SICTIC): So Switzerland, you can say that angel investors start with a 20,000 Swiss franc ticket as the lowest one. And average what we see when we can support a startup is like half a million.

Julien (nonoise.cub): Half a bit, okay. What about impact investing? What are the expectations of your business angels, of you as a business angel, regarding impact investing? Do you expect extra economical result as well? Do you care about impact investing? What's your point of view?

Steffen Ehrhardt (SICTIC): And so, like I personally, like I worked with last year's a lot on sustainability topics and like in my role, I kind of try to, you can say educate angels that impact investing is not a charity effort because there is still kind of a of this reputation, if I invest in sustainability topics, I will not see that money again or just like with a very low return. But it doesn't have to be like that. And that's where like I see there is a bit of like more context needed and also maybe more success stories that will help to show to investors that this is actually a really good investment that can also create a good return because that obviously is still one of the big factors why people do angel investing. They would like to see the money back and ideally a bit more. then like impact investing is not necessarily top of mind versus all the other industries.

Julien (nonoise.cub): I totally understand that. Regarding impact, know at no noise and in this podcast fighting noise. We do care about fighting against noise pollution. Yeah What's your it's it's not I know it's not a really common topic and it's not a lot of investors just hear about that for the first time even if we already have something like 50 or 60 great startups working on that on that topic and What's your point of view about noise pollution? Because when you speak about sustainability, I guess you speak mostly about climate change startups or into startups and fight against CO2 air pollution. So what's your point of view about noise pollution as one topic?

Steffen Ehrhardt (SICTIC): Yeah, I mean, for me, it's like the biggest umbrella is SDG, then it's sustainability, and then it goes down to certain other subcategories. There are a lot of like universe like just an ocean style ecosystem. And what I personally like find interesting, I can relate to this topic quite well. I grew up in the countryside, you can say in the middle of nowhere where noise was not a problem. Or it was more natural noise, you can say that. makes it easier for people to live, let's put it this way. I remember my first time when I moved into a city, how I was really surprised how present there is whatever kind of constant noise from a construction site, from the cars, et cetera, et cetera. And there is an ecosystem in that sustainability context from multiple different angles. like... that's clear link from noise to health. Not everyone is aware of it. And for me, it's interesting in Switzerland, for example, there's a strong awareness of this than in other countries. For me, a good example is like the Zurich airport is one of the quietest airports.

Julien (nonoise.cub): Yeah, that's right. I was very surprised.

Steffen Ehrhardt (SICTIC): And they build it also with the new terminal in a way that it even takes more noise out of it, which kind of like takes away more stress from people who like want to fly. And like if you've been at a couple of airports, it can be extremely stressful and not just due to the amount of people, but also due to the noise. And in startup ecosystem, there are definitely a couple of interesting opportunities. I think the biggest point that not only noise, but in systems the context startups have to think about early on how to align all of this with call it capitalistic reality of this world. And there's a lot of incredible founders doing really great stuff. But if you cannot find a way for this, you can only grow to a certain level, but you stay small and your impact will be limited. And those who figure out the way how to make it a sustainable, financially sustainable business. they have a very good and better position also to grow because it attracts investors who would like to invest in scalable businesses and they want both, you know, they want impact and financial return.

Julien (nonoise.cub): But without financial return you have no impact because you can't survive for many years as well. Or you're a bird's-eye, which is not the case, but not the one we discussed today. Okay. Do you know already startups in that case?

Steffen Ehrhardt (SICTIC): There's a very. I mean, you shared with me a couple of them because I haven't really looked into it specifically. Like for me over the last years, the carbon topic is something not that exciting. There's a lot of noise, a lot of scam as well and weird business models. I look deeper into biodiversity, which was fascinating for me to see. They also struggle to make the links to like what's the like the real impact and what it means in terms of money. other areas like on the blue economy or like I support weather startup. There's a lot of great things happening and thinking about early on how this could look like from a commercial aspect is something I tell basically all of them because you have incredible researchers like they build a fantastic product but specifically in Switzerland there are lot of people who don't think from the beginning is their product market fit, is there an audience who would basically buy that and pay for it. A lot of people are like, it's a nice to have. But it's like, is it just like a beauty product or is it like medicine?

Julien (nonoise.cub): Or even do they have access to the market? do you repeat here on the conference or today with Starship? Why do you do that? Okay, that's your passion, but do you have a good market strategy? Do you have the right access to the market? It may be more difficult than you think even if you have a great product.

Steffen Ehrhardt (SICTIC): Yeah, yeah. And in this context, like this whole space, first of all, needs to educate and create awareness that this is a problem. A lot of people don't know that. And I think that makes it even tougher because like if there's not a general awareness of some of the problems that exist. It's a great storytelling that is needed, a narrative that works with like everyone, not just investors, because then it creates kind of a flywheel that makes this topic even more present, like in media and so on. Great.

Julien (nonoise.cub): How can founders get in touch with you or with SICTIC to of course send a deck?

Steffen Ehrhardt (SICTIC): Of course, I mean we're always interested in meeting great founders.

Julien (nonoise.cub): do it.

Steffen Ehrhardt (SICTIC): just go to sicktick.ch there's like startup submission form where they can fill in all the details and we're nonprofits so we're not taking any equity or fee from startups. We try to connect them to the right angels who are interested in investing in multiple different areas. And yeah, hopefully we can support them and be like do also specific events in certain areas where we see opportunities, we do a food tech event. We work with Blue Lion on different climate related events to really make sure that from my end, I can really help those startups by bringing some investors and convince the overall. ecosystem of angel investors that this is actually a opportunity for them not just to make return great return, but also just to learn about what's happening in all those different areas because they will be advocates then to other people as well. And usually angel investors are advocates that like have maybe higher seniority level, have an audience that listens to them because they run a team or organization and whatsoever. And it's good to have those kind of lobbyists you can say who like bring more attention to important topics.

Julien (nonoise.cub): So let's maybe think about a kind of noise take event to make awareness around that and gather started around that.

Steffen Ehrhardt (SICTIC): Obviously that would be quite a unique one. I haven't heard of one in Europe at this.

Julien (nonoise.cub): And that's my goal. There is no vertical for noise. noise is around mobility, industry, construction, social life, and health tech. But there is not one vertical. And that's my goal, to build it. And to be honest, even this morning I spoke to a very big investor. Near my hotel and and it told me yet. It's there is so much to do in that case but I think if we don't have the right vertical if accelerators incubators if Mrs. Angeles Networks and if we don't create that vertical make it aware that we can invest into that topic because there is a very big pain and a very Costy pain. Yeah one thousand billion in Europe. Yeah. Yeah, I think we can make it up and we should we should make it up and it's one of the Yes.

Steffen Ehrhardt (SICTIC): Just make the link to the dollars early on. What does it mean in terms of like dollars, francs, euros, to convince everyone that this is something that needs to be addressed.

Julien (nonoise.cub): Bye. I hope the founders and listeners of this podcast will understand that with no money, no possibility to have an impact. So impact is a vision that's an all-star, it's a mission. But at some point we have to speak about metrics and to be convincing around metrics first of all and then make it happen. Steffen thanks a lot for your time today. was great to have you. Thank And we keep in touch. And if you have any questions to Steffen, you can reach out to the SICTIC website, so S-I-C-T-I-C dot C-H, yeah, get the Swiss business angels to invest into impact topics. can make it happen. Thanks a lot, Steffen.

Steffen Ehrhardt (SICTIC): Thank you. Bye. Good, Nice chat.