Hendrik Brandis

This transcript was generated automatically (YouTube auto-captions) and then edited for readability: names and obvious mis-hearings corrected, filler words removed, speaker labels added where the speaker is clear. Passages that could not be understood are marked [unclear]; short omitted passages are marked [...]. Timestamps are approximate. The recording is the authoritative version.

Julius Ambrosius 00:00:01

Hello and welcome to a new episode of Campus To Capital. Today, Konstantin and I are honored to be joined by one of the key figures in the European VC ecosystem. Dr. Brandis, co-founder and general partner at Earlybird, is joining us for a very interesting, hopefully very interesting conversation today. Thank you for joining us.

Hendrik Brandis 00:00:32

Thank you for inviting me. Hello. Hello Konstantin. I'm very happy to be here.

Host 00:00:39

Awesome. Well, so you've backed loads of European tech innovators such as Black Forest Labs, which also created your website, which is very nicely done, I must say. And you've been with those companies for a long time before they had their significant breakthroughs and you have a decade long, decades, multiple decade long experience in VC. If you would have to describe your job to our listeners within one sentence, how would you summarize it?

Hendrik Brandis

I think I would say my job is developing perspective and conviction for the future.

Host

I really like that. I think we might get back to that by the end of the podcast. But when we now zoom out and, let's say, take you back to the time when you were our age, you started in uni as an aerospace engineer and then found your path into consulting and eventually started Earlybird around 30 years ago. When you look back, what would you say do most, let's say, people with a business background get wrong that you as an engineer really understand?

Hendrik Brandis

I'm not so sure whether I really understand everything. So, but I get your question, you say where provides my technical engineering background a certain advantage

00:02:09

with respect to the evaluation of opportunities. I would say generally I would distinguish between two different risks which we assess and in which one can invest as a venture capitalist. One are business model innovations, and business model innovations are typically related to product market fit risk, and it's absolutely difficult to assess those, and product market fit might be given in an early phase of a development, so for early adopters, but may not be sustainable in the long run. Take Gorillas, for example. And others are sustainable, take Flex [unclear]. But both are in my perspective typical business model innovations where the respective investors had to make their minds up for the long-term product market fit risk. On the other extreme, you have, I call them, technically or technology differentiated deals, where you typically have to a lesser extent the question regarding product market fit. It is more about realization risk, and realization risk basically consists out of two constituents. One is technological risk and

00:03:39

the other is follow-on funding risk. So if I take an example which probably most of you know, which is Isar Aerospace, it is not very difficult to make up your mind that there's a product market fit. Yeah, there is a huge over-demand for the next decades to come with respect to launching capabilities, or well, capacities, not capabilities, also, but capacities. And the moment one has a functioning rocket, the launches can be sold. So the question is, is the team capable to build a functioning rocket? And this is more than just bringing a prototype to orbit. It's about building an industrialized functional rocket, which can be produced in tens of [unclear] a year at competitive cost, price points, in order to make a business out of it. And can we attract sufficient follow-on funding in order to even prove that the team is able to build such a rocket? And especially the first part of this realization risk, how significant is the technological risk contained to build a rocket? I think that is much easier if you have

00:05:10

a certain technological background and a qualified judgment there. My observation is that most people who do not have a respective engineering background tend to overrate technological risks and shy away from respective commitments because they think it's like, you know, it's gaming. Yeah. It can work, when they don't really know where to look at and whether that is a 90% or 10% risk. And this is, I think, much easier if you have been within that business to come up with a college [unclear] judgment. I mean, even more extreme if you go to investments such as Marvel Fusion, where it's not only a technological risk, it's also a physics risk. Yeah, it's even more complex. And this is the reason why it is so difficult to find respective qualified deep tech investors who do have the capabilities to think about this tech dimension of the realization risk.

Host

Maybe in coherence with finding whether a company has a good product market fit or other foundations that are key to having a sustainable business model. We talked to a lot of other GPs in the venture capital space as well, and a lot of them mentioned, especially when it comes to very early stage ideas, that it is difficult to fully

00:06:40

grasp how a certain team and an idea functions and how a team operates, as they often hide and operate in stealth at the start and at the get-go. So how do you, in a more unapparent venture scouting process, how do you find information that is not immediately available on the internet or on some database, and then maybe also within that, talking about new technologies, is there any way to leverage AI for this as well?

Hendrik Brandis 00:07:08

I mean, we're not talking about access to deals, we're talking about access to information. Is that right? Is that the question? I mean, obviously in the era of AI this has become much easier. So what we do is, with our internal system we basically scrape the internet to certain topics and we get relatively comprehensive and immediate access to all knowledge available in the internet. We use LLMs for that. So that has become more easy. It gets more tricky if we would like to get beyond it and get real human judgment and assessment on certain opportunities, because that then plays down to networks, and I think this is of utmost importance, to be honest. So one thing is, you know, to extract, this is a little bit like the homework and the base of everything, extract the information available in the net, and this is doable, and I think every little bit more sophisticated VC should be capable to do it. The next thing is then that we try to access the respective expert networks and try to talk to people and say, look, you know, take the example of Marvel Fusion when we

00:08:38

first invested in the seed round. At the end of the day it is prototypical for basically all tech areas. You typically find situations where you have a relatively small circle of true experts for certain tech problems globally, and these circles are not huge. They are in the tens of people, not in the hundreds, if you really go to the core. And it is decisive to access your network and go step by step to this core of knowledge for respective themes. You start randomly somewhere, hopefully closer to the core than not, too distant, otherwise it takes longer, and then you always ask, who should I talk to next and who would be important. At some stage you find yourself in a situation where the people only point to other people to whom you have talked already, and if you have reached that situation, you can be relatively sure that you have reached the core. And you have to be, so, yeah, penetrant. You have to keep on going

00:10:08

so long until you have reached that knowledge and competency core, and let them then give you their perspective, and you judge it and you say, look, that person seems to be more credible, more into the topic than the other, etc. And you make up your mind and take your decision with respect to the risk-reward ratio of a certain opportunity.

Host 00:10:33

Very interesting. But so you referred to your sourcing process with the support of LLMs. You also state your proprietary platform Eagle Eye on your website, which you then leverage to improve that. But do you also sometimes have the cases where the model is failing and where the human has to override and then judge on a certain point, and if so, at what point might that then be the case?

Hendrik Brandis

It is always a machine/human judging, and basically at every level of the process. The only thing is, at the very beginning the number of opportunities is so big that the level of human involvement is minor to none. So every year we are looking at roughly 50,000 opportunities, every year we do 15. Yeah. So 0.3 per mill. So we have to be very quick to boil it down to, say, 2,000, and in that first process from 50 to two it is to a large extent machine driven. We try to, you know, have a verification look, but I think it is very, very superficial

00:12:04

and we typically follow the machine. From then onwards, a due diligence team or a tech team takes over and the weight heavily goes to the human side. The human side then still uses the system, but it uses the system as an information source, but not so much for judging.

Host 00:12:31

I see. So you try to filter out the very irrelevant noise, if I may say so, and then when it really comes to substance, then the human

Hendrik Brandis 00:12:40

Yeah.

Host 00:12:40

I see.

Hendrik Brandis 00:12:40

And then we still use the machine, but as a, you know, to access information.

Host 00:12:46

Yeah. Makes a lot of sense. So you already talked about some of your portfolio companies such as Isar Aerospace or Marvel Fusion, which are both in the deep tech sector, where it is often about, you already said it, it's often about technical risk and not the market risk. So let's say if it works, the market will be there automatically

Hendrik Brandis 00:13:08

for these two examples for sure. Yeah. I mean, there will be a market for, I don't know, single-digit cent per kilowatt hour power, and there will be a market for rocket launches, as we said before.

Host 00:13:23

Yeah.

00:13:23

No question.

Host

What would you say for you then, as a source of capital but also as a mentor for these companies? What does that change in due diligence and also in how you coach and then spar with these founders?

Hendrik Brandis

I mean, obviously it entirely changes the focus of the due diligence. So if product market fit is not a question, I do not need to analyze the power market. If I talk about Marvel Fusion, I have to first make up my mind whether I do believe that the physics are going to work. And this is quite a difficult task, because back then when we initially invested there was quite a lovely discussion ongoing between specialists, global specialists, institute leaders, yeah, here, Nobel Prize laureates, whatever, saying it works or it doesn't work. Yeah. And then you come up as a little investor and say, so how shall I judge? And this is only the first step. And then, if you have made up your mind and said, okay, the physics may work, does the technology work? Yeah, can I use that physical principle in order to really create something like a commercial power plant?

00:14:54

And then in the next step you have to come up with the hypothesis: do I find sufficient capital in the market, since we cannot provide all what is needed? Do I find sufficient capital in the market to actually get the permission or the basis to even come to the proof point? So in the case of Marvel Fusion, we needed something like 400 million in order to get to the fully constructed demonstrator. We will be there next year. But if we wouldn't have gotten access to the 400 million, the hypothesis might have been still right, but it would have been a failure anyhow. We would have been, you know, would be dried out before, like Leo [unclear]. So that is then the focus of the due diligence, these three points: physics, technology and follow-on funding. Product market fit, I must say, I don't invest a second, because I know that, you know, initially, even in the prototype, power will be produced for 3 to 5 cent per kilowatt hour. 100% sure we can sell.

Host

Yeah, I mean, demand is constantly growing for that, I would say.

Hendrik Brandis 00:16:24

Yeah. And it is, you know, it's capable to provide, you know, base load. It is absolutely risk-free. It is CO2 free. There are many reasons why one would like to have it. Yeah.

Host

So, but if we then take a broader look at the, let's say, whole deep tech landscape, also across robotics, advanced computation powers and then energy systems, as we just talked about, and considering how key figures such as Peter Steinberger, who broke the news a couple of weeks ago with OpenClaw or Molt, I'm not even sure which name is the proper one right now. So when we see this sort of wave of agentic AI and applied systems, where would you see the currently strongest momentum in that space?

Hendrik Brandis 00:17:20

Yeah, that's an interesting question. And because first of all, you have to define probably what you mean with the biggest momentum. Is it biggest momentum, that space where I have the highest likelihood of coming up with great new platform technologies, creating new huge companies, because there's a high likelihood of differentiation and USPs and sustainable competitive advantages? Or are we talking about general momentum, where, you know, a certain technology is applied in a very broad sense, doesn't necessarily mean that one can create super companies because it's hard to differentiate, but in a broader sense it creates huge momentum? I would have an answer for both situations. So for the latter, I think it is definitely agentic AI, because agentic AI will change the world in which we work, left and right, top and bottom, everywhere. Defensibility of agentic AI applications, I think, is very difficult. So the likelihood that we're going to see centicorns

00:18:50

based on AI, I think, is not as high as it might be in advanced compute there. I think in advanced compute there are very exciting new technologies coming on with a great opportunity for sustainable competitive advantages. You can think about new photonic chips replacing Blackwell. You can think about quantum. You can think about graphene applications within semiconductors, such as Black Semiconductor, as an example. So there's so much fundamental innovation, quite often hardware related, going on, which are hard to replicate and are well protected through IP, that I think that the likelihood that we're going to see huge companies developing out of that area is way higher than in the area of agentic AI. Although the overall momentum in agentic AI is probably even higher.

Host 00:20:04

Okay. When we move on from the nitty-gritty of deep tech ideas right now and look at the broader global venture capital space and startup space, we've seen some great developments in Europe recently, for example with your portfolio companies Black Forest Labs or Isar Aerospace, and then up in the Nordics where we are, we have Lovable, who's everyone's darling right now. But I think, I mean, it's still safe to say that the north star of venture capital and startups is still Silicon Valley in the US. And how do you advise founders when the best money for them might not be where they are located right now, but would require them to move critical infrastructure over to the States in the current environment that we are in?

Hendrik Brandis

It's a difficult question for me, because there are two hearts in my chest. One is, obviously I'm a patriot. I'm European, and I would love to keep technology here as much as I can. On the other hand side, I have to stay loyal with our LPs, our investors, and I have to support decisions and encourage decisions which are the most value creating decisions for the respective companies. If I have to take the decision, I choose the latter. So loyalty beats patriotism. And so if I come to the conviction that

00:21:34

some transition to the US provides better access to capital, better access to customers, to talent and even maybe to exit and liquidity, I would actually encourage and support that transition. However, that is not a given, because especially we're living now in an era where the two markets become increasingly decoupled. We do observe tech customers who explicitly want to buy European. So there are emerging opportunities in Europe. I mean, think about all these huge defense related investments. They predominantly go to Europe. Being in the US, you're going to have difficulties to access that market. You will enjoy probably better access to talent, as we speak, not necessarily to management talent but to tech talent. It's cheaper and better available. So there are arguments and counterarguments, and I think the trade-off has to be made, but at the end of the

00:23:04

day the recommendation will be made in favor of the company, in favor of the highest value creation.

Host

And when we look at these pros and cons and risks of building in the US compared to building in Europe, do you have any specific scenarios in mind where you would advise a company to stay in Europe, and another scenario where you would say, okay, no, it's actually now better for you to move to the US?

Hendrik Brandis 00:23:30

Yeah, definitely. And as I said before, I think it very much depends on the individual situation of the companies, and quite often it is a decision for both sides. Yeah. You take the best of both worlds. Yeah. You may stay with certain development and R&D centers in Europe in order to secure access to the cheaper and more available talent. It's less, in that regard, less competitive. On the other hand side, you'd like to be present in the US in order to be close to a huge monolithic market, to customers, and maybe also to an IPO exit at Nasdaq. I think it's not so easy to list a European business at Nasdaq, but if it is a transatlantic business, it's going to be easier. So yeah, I think there is no one clear recommendation. Take Isar Aerospace. I mean, one of the huge opportunities Isar Aerospace has is that it is European, because the launcher market in the US is relatively well served yet, which is absolutely not the case in Europe, and the European market is huge. So opportunities for Isar in Europe are way better than in the US. So

00:25:00

I think there is no general recommendation I can give. One has to look at the individual situation of a certain business and then come up with a recommendation.

Host 00:25:10

Yeah. And I also think, I mean, the IPO and accessing liquidity conversation is also something that we want to tap into a couple minutes down the line. But when we stay with encouraging and strengthening successful ideas in Europe for now, I mean, there certainly is a very great ambition to have successful startup ideas and to build in Europe. I mean, I think it was just yesterday when MIT hosted one of their global semifinals of their climate startup competition at the Technical University of Munich. However, when we think about super fast rising giga cap startups, we don't really see them in Europe yet. I mean, for example, now when we think about Anthropic, which is in everyone's mouth right now, and we see new news about how fast they're accelerating every single day. And maybe if we want to stay with the universities for one second and think about how we can tackle this problem of a lack of commercialization of ideas at the very root: if you could step into leading your universities in Europe tomorrow and would have the opportunity to make some key changes within them to address this issue, how would you go about this?

Hendrik Brandis

First of all, I don't think that we have a particular university problem. I think the problem is not rooted in the universities. And therefore, if I would step in

00:26:40

in the leadership team of a university, I couldn't change too much, a little bit maybe. But I think the root cause for the absence of multiple centicorns in Europe is threefold. First is, I think we are lacking quite often the ambition. Yes, it's to some extent also a self-fulfilling prophecy, since we haven't seen any centicorns evolving out of Europe, with the exception of Spotify maybe, people don't think that this is a valid objective. But there is no rational reason why it is possible in the US to build tech platform companies, I think we have seven right now in the multiple centicorn range privately, the private multiple centicorn variations, and Anthropic is one of those, and why it's not possible in Europe. That's not possible. It is possible in Europe, but only if and when we really want it, it's going to happen. And it does affect many things, the facts, the strategies of the startups, if you have the real ambition to get really big and category

00:28:10

leader internationally. And also it affects obviously the necessary funding you have to take in. There are a lot of prerequisites which have to come together in order to make it possible at the end, but it starts with the ambition. I want to say, I think regularly we in Europe tend to be too humble. Second thing is regulation. Europe is unfortunately almost everywhere overly regulated, and that hinders the scalability of innovations in a very early phase. I mean, if you have listened to my speech at DLD, I have given the example of Lilium, and this is a wonderful example. It is so eye-opening, because the perception is that Lilium failed because it was unable to attract the last billion euros which had been needed to make it to full certification, after the investment of 1.5 billion at that point of time. The deeper reason, though, is that EASA, the European regulatory body, decided many years back to only certify Lilium at the same safety standard like an Airbus. So with an accident likelihood of 10 to the power of minus

00:29:40

9. And that although a Lilium jet would have replaced helicopters, not Airbus jets, and helicopters are certified with a safety level of 10 to the power of minus 6. So a thousand times more likely to fail. And the reason is, if you wouldn't have reduced that requirement, no helicopter could fly, because these are pretty dangerous tools. So we're now replacing these dangerous tools but coming up with a safety requirement which is a thousand times higher. The competitors in the US only have to fulfill 10 to the power of minus six, because they say, oh, this is going to be addressing the helicopter market, so we apply the same safety reasons. Between 10 to the power of minus 9 and minus 6, there's probably a billion in development costs in a couple of years. So if we wouldn't have had the situation of EASA coming up with this ridiculous requirement, which is completely out of standard and out of industry, we might have now seen a flying and successful Lilium jet. Very sad to say. And this is just one pretty obvious example, and I can go on and go on. I can talk about fusion, if it comes to the permission

00:31:10

processes. The question is, is it a nuclear power plant, or is it something which can get permission like a coal power plant, because there is no chain reaction risk? It goes on with AI. You came up with the Black Forest Labs example. Black Forest Labs does have a significant development facility in the US, also due to the regulatory environment there. Yeah, which is less strict. Think about BioNTech going even to the UK because of gene related restrictions we have here in continental Europe. So everywhere we are overregulating our early innovations, and what I advertise is something like a relatively regulation-free experimental room for young innovations, and only if and when we see something emerging, we can still think about a reasonable regulation thereafter, but not from the beginning on. And thirdly, we're definitely missing the capital. And this is so obvious if you just digest that OpenAI has consumed 57 billion US dollars in investments up to now, and the entire growth capital

00:32:40

invested, or venture and growth capital invested in Germany in 2025, were 8 billion. So a fraction, a seventh of what one company consumed in the US. It becomes pretty evident that we are simply lacking the ability to provide the necessary growth capital to develop these hyperscaling companies. And we need to develop those, because at the end of the day we're living in an era where growth is totally concentrated. The difference between the US growth and Europe can be rooted to just 10 companies. So Mag 7 plus Berkshire Hathaway, LA [unclear] and Visa, 10 companies making the difference. And if you take these 10 companies out, the US growth advantage is not only gone away, it's even then inferior. So the predicament we have in Europe, our problem, is that we do not even have one of these hyperscaling companies. We do not participate. Growth in our era tends to be extremely concentrated. We have to find ways to participate in this significant concentrated growth. And again, I see the three things: it starts with the ambition, goes on with the regulatory environment

00:34:11

and ends up with a provisioning of sufficient capital. And obviously, I mean, if you go back to the first German Wirtschaftswunder, yeah, in the 1950s to the 1970s, growth was significant, investments were significant. We were back then at 3 to 4% of the GDP being invested in growth every year, but extremely distributed, distributed to [unclear] thousands of midsize and small companies, and they all collectively provided the enormous GDP growth we experienced back then. And nowadays we still need that level of investment. We are down below 1%, by the way. So we need to go back to the 3 to 4% in order to get back to growth. But the structure is quite different. It's not going to be distributed again to 10,000 or even hundreds of thousands of businesses. It's going to be concentrated. If I take the 10 from the US, per capita that would be two in Germany, just two. So yeah, we need two companies in order to catch up, two. But that also means that we have to provide extremely concentrated investments, and with the tiny little venture and growth funds we manage over here, including ourselves, yeah, that is virtually impossible, and that needs to be solved.

Host

The way I see it is that there are just multiple pain points that need to be pushed and fixed

00:35:41

in order to sustainably change the landscape in Europe. And maybe to quickly paint a picture for our listeners, you earlier mentioned speaking at DLD, and I was actually lucky enough to hear Hendrik speak at the conference in January, and almost every single speaker on stage really emphasized tackling this issue, and people were wearing Make Europe Great Again hats and were all advocating for it. But I think there's a huge difference in verbally addressing and recognizing that issue and then also actually leaving the conference and then starting to act on it when you have the capabilities to do so. And I see venture capital and capital provision as a crucial factor within fixing this problem. But maybe next to that, is there something that you think Earlybird is doing or should do to also address this issue further, next to just providing capital?

Hendrik Brandis 00:36:36

I mean, we can work on the ambition. Yeah. So, and I'm trying to preach that every day within our own organization: let's back opportunities with truly uncapped upsides. Yeah, let's take the risks. That's okay. But we cannot invest or commit to opportunities with limited upside. Only if and when, in 100% of the cases, it can become a centicorn, we will hopefully find at some stage one. Again, we do not have one in Europe yet. So that is something we can contribute, and we have to be conscious about it. There are so many interesting opportunities where we may be able to do 20, 30, even 50x, but it's still capped. We should not do them, even though it's attractive, and this is tough to decide, because if we decide for them, they take the room for an alternative investment which may not have that cap. And therefore I think we should be as disciplined as possible to maintain uncapped upsides. With respect to the regulatory environment, I'm trying to use my capabilities to lobby for deregulation

00:38:06

as much as I can, tell it to everybody who wants to hear it or not hear it, and say, look, that is a problem. I know it's very difficult to be addressed, since there is not one single regulatory authority. There are thousands for different technologies. And I do not have a good proposal how to do it. But we have to think about it. We really have to seriously think about it, in the context of deregulation and debureaucratization, how we can make progress here as quickly as possible. And finally, we try to grow our funding capabilities. We try to grow our funds, and with the growth of our funds we can grow our lead tickets. Yeah. It is so important that we ultimately manage funds here in Europe where we can write a 100 million equity ticket in venture capital and growth. But you probably need a two to three billion fund in order to be able to do so. Otherwise, you know, the risk is unbearable. And our funds are still way too small for that. I can tell you, I work day and night in order to let them grow and to convince people that this asset class is highly attractive and its performance is really good. And I mean, maybe also thanks to the small fund sizes, European venture capital in the last years outperformed US venture capital. People

00:39:36

do not, this is against all odds, and if you talk to people they say, oh, Silicon Valley is still the holy grail of performance. The elective [unclear] funds may be, but these elective [unclear] funds you also find in Europe. We have a fund that delivered 15x on a fund level. Yeah. This is pretty competitive even in the US. So European venture capital is competitive, and we need to attract more assets in order to grow our funds.

Host 00:40:04

Yeah. And I really think that this is very important work, that people that are at the forefront of this like you work very tightly together with regulators in order to find a solution. And although we just talked about the status quo and that there's a need for action, there are some things happening on the regulatory side, at least that's what we as, yeah, let's say, the average Joe can read in the news. I mean, there's something like EU Inc., which is supposed to make cross-border collaborations of companies within Europe easier. So do you think that Europe is already addressing the real bottlenecks, or are we still trying to solve the wrong problems?

Hendrik Brandis 00:40:54

No, not wrong problems. I think we're addressing a lot of issues and we do make progress, and obviously EU Inc. is a good thing to have. Harmonizing the regulatory environment, laws, also with respect to capital markets union, super important. People are talking about it. Everyone would wish that progress is going to be faster, but I think people are aware, and these are definitely not wrong issues. My criticism goes mostly on some missing points. And first, I think the most crucial point is the regulatory point, where it's not so that people challenge the point. They say, yeah, yeah, you're right, the regulatory environment is a problem, but I think they are a little bit clueless how to address it, and I must say I join that camp. I'm also clueless, but it's necessary. So we cannot give up on that. We need to dig into it and say, what can we do on the legal side to debureaucratize, deregulate innovative sectors. And the second thing is on the capital side. There are quite some initiatives going on, the European Scaleup Fund,

00:42:24

the Etsy [unclear] initiative from I [unclear] for large growth investors. The I [unclear] is willing to provide, I don't know, 300 million as cornerstone investments in growth funds, etc. That all has an effect, and these are good initiatives, but we should be aware that we are unfortunately an order of magnitude too small. So it is slow and it is way too small. So I mean, my one example is this wonderful WIN initiative in Germany. Yeah. Which is basically, in the first place, a bookkeeping initiative, where, you know, all the venture capital investments of larger institutions are put on one page and summarized, and then there is the attempt to encourage the institutions to do a little more. That little more comes on top, but it's absolutely not so that the 12 billion over five years are additional capital. This might be one billion additional or so. And if you then divide that by 5 years, we're talking about, you know, a drop on a hot stone. Yeah, it is a couple of hundred millions more. Still good, not wrong, but probably factor 20 too small. And we have to think about

00:43:54

the right size of the issue, the right size of the solution, because that drives us to different concepts. And there are concepts which one can come up with in order to solve the issue, to redirect significant capital flows from institutions, from private savings, into a growth capital asset class. But these need to be addressed, and only if and when we do that will we see a real impact.

Host 00:44:24

And then, I would be interested what your take is on a national level, when we look at Germany, because France, for example, just announced huge investment into the suburban area of Paris with Mistral and data centers and so on and so forth. Do you think that things should also happen on a national level, or should we always try to act, you know, as a whole Europe, and then therefore have a stronger collective force?

Hendrik Brandis 00:44:59

I don't think that we should do either or. I think what France is doing is wonderful. I would wish that our national domestic German government is doing the same things, maybe for either aerospace or other companies, and I think they try to do so. It's not so that they're not aware of the problem, and I think the willingness to support is there, and I fully respect that, and this is one piece of the solution, I think. But it doesn't structurally solve the issue. I think a structural solution is only if we manage to redirect the larger pools of capital which are currently going into government bonds and real estate, or, I don't know, into growth capital. There are solutions for that, and we're talking about huge capital pools. Yeah, we're talking about, just Germany, 300 billion each, so 600 billion annually. So this is way too much. Yeah. If we would get, I don't know, 5% of that annually into growth capital, that would solve the issue. So the challenge is, how can we redirect 5% of the large capital pools into different assets than they are going right now? I think there are solutions available, and that needs to be addressed. And if you ask

00:46:29

so, all what is being done, I think, is good, but that piece is missing.

Host

And I mean, now we've talked a lot about how to foster the right environment for founders, and maybe we looked at the start of, maybe it's a wrong metaphor, but let's say a running track, because, I mean, it's not a sprint at the end of the day. But maybe now if we want to look at the finish line: we've recently seen a lot of European funds facing an exit backlog, and now we want to talk about how to achieve liquidity as a fund or also as a startup, as a company. The New York Stock Exchange has now outperformed the London Stock Exchange for quite some time. However, we've seen a small pickup at the back end of last year with an increase in IPO activity. Do you think now, with also more investors being interested in Europe, that we will see an increase in IPO activity and IPOs being more of a key driver for liquidity? Or will we still mostly see strategic M&A providing liquidity and solving exit issues?

Hendrik Brandis 00:47:40

So I do believe that we will be seeing an increase in IPO activity in 26 and maybe even in 27. Visibility not yet there, but 26, I'm sure it's going to improve. Is it then immediately a key driver for liquidity? I don't think so. Again, let's get a sense for order of magnitude. In a low year, 2025, there was 8 billion invested in venture capital or growth capital in Germany. If we would think about a major source of liquidity, we would need to see at least eight billion, maybe better 15, of liquidity out of tech IPOs in Germany. Is that a realistic scenario? I don't think so. That is a big number. So for the time being, I think there will be a mixture between trade sales and IPOs, but every bit helps. Yeah. It's good that the environment is improving, and it will contribute.

Host 00:48:58

Sure. Yeah. Certainly. I mean, I'm also very interested to see how the whole activity in the capital markets is going to pick up now over the year, and also in combination between the banks and the private market funds. I think not only in Europe but also globally, there are loads of interesting things ahead in 2026 and maybe even 2027, as you mentioned. And I think now, for the 50 minutes that we have had so far, it's actually quite nice, the range we had and that we covered in the depth that you can cover within 50 minutes. But maybe now, to round off our conversation and look back at the early Hendrik, right before everything started and all of this began, where you became one of the leading figures in German venture capital: if you could talk to your 20-year-old self at the start of your career, what is one thing that you would tell young Hendrik to avoid at all costs?

Hendrik Brandis

To avoid?

Host 00:49:57

Yes.

Hendrik Brandis

I would say two things. I would say follow your passion and don't make compromises just to invest into your future. Enjoy every minute of your career and your professional life. Every year is so valuable, it doesn't come back. You never know what pays off. Don't sacrifice valuable lifetime just for optimization of your CV.

Host 00:50:37

I think that's a very valuable closing note, not only for us but also for everyone that hopefully tuned in until now. Thank you very much, Hendrik, for your time today and for covering all these very interesting topics. It was a pleasure.

00:50:51

Yeah, thank you from my side as well. Really enjoyed it.

00:50:54

Thank you. And yeah, for everyone else that is listening, still listening, we will be back in two weeks with the next episode. Thank you so much for listening and hear you soon.