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Mar 9, 2015 · 19m · 20vc

20 VC 018: Seed Stage Investing with Stefan Glaenzer of Passion Capital

Stefan Glaenzer · 11m spoken Harry Stebbings · 4m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of The 20 Minute VC, host Harry interviews Stefan Glaenzer, founding partner at Passion Capital, covering his journey from tech entrepreneur to venture capitalist, Passion Capital's seed investment philosophy, and key pitch advice for founders.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 29.1% of the talking time here. How this is scored →

Harry as informed peer 2.0 Guest teaching 3.2 Guest disagreement 1.0 Harry pushing back 1.0
05100:0010:000:33–3:56 · Harry as informed peer 1/10 Introducing Stefan Glaenzer of Passion Capital Harry introduces guest Stefan Glaenzer and asks about his entry into technology and VC. Stefan explains his PhD in option pricing and early entrepreneurial ventures leading up to Riccardo. The exchange is friendly and welcoming with no friction.3:57–6:10 · Harry as informed peer 2/10 The Rapid Growth and IPO Success of Ricardo Stefan gently corrects Harry's assumption that Ricardo was his second startup, pointing out five or six mediocre pre-digital attempts beforehand. Harry asks standard seed-stage investment check size and equity percentage questions.6:11–9:45 · Harry as informed peer 1/10 Post-Investment Collaboration and White Bear Yard Harry expresses genuine shock when Stefan mentions meeting 700 companies physically per year. Stefan educates Harry by breaking down the simple math across three partners to show it averages to just one company meeting per day per partner.9:46–12:39 · Harry as informed peer 2/10 Handling Passed Deals and Investment Regrets Harry asks about missed deal regrets and Passion's interest in peer-to-peer lending, referencing specific portfolio names. Stefan offers broad perspectives on financial technology disruption and compares it with traditional banking.12:42–15:15 · Harry as informed peer 2/10 Investment Criteria, Sector Focus, and Authentic Enthusiasm When Harry asks for another excited sector outside fintech, Stefan rejects the thematic premise, explaining Passion's strategy focuses on talented entrepreneurs rather than vertical sectors. Harry then asks about pitch presentation dynamics.15:17–16:54 · Harry as informed peer 4/10 Red Flags in Startup Pitch Decks Stefan cites cliché 2x2 competitive matrix diagrams as a pitch deck red flag. Harry adds his own insight that claiming to have zero competitors is an even worse red flag, which Stefan accepts.0:33–3:56 · Guest teaching 2/10 Introducing Stefan Glaenzer of Passion Capital Harry introduces guest Stefan Glaenzer and asks about his entry into technology and VC. Stefan explains his PhD in option pricing and early entrepreneurial ventures leading up to Riccardo. The exchange is friendly and welcoming with no friction.3:57–6:10 · Guest teaching 4/10 The Rapid Growth and IPO Success of Ricardo Stefan gently corrects Harry's assumption that Ricardo was his second startup, pointing out five or six mediocre pre-digital attempts beforehand. Harry asks standard seed-stage investment check size and equity percentage questions.6:11–9:45 · Guest teaching 5/10 Post-Investment Collaboration and White Bear Yard Harry expresses genuine shock when Stefan mentions meeting 700 companies physically per year. Stefan educates Harry by breaking down the simple math across three partners to show it averages to just one company meeting per day per partner.9:46–12:39 · Guest teaching 3/10 Handling Passed Deals and Investment Regrets Harry asks about missed deal regrets and Passion's interest in peer-to-peer lending, referencing specific portfolio names. Stefan offers broad perspectives on financial technology disruption and compares it with traditional banking.12:42–15:15 · Guest teaching 3/10 Investment Criteria, Sector Focus, and Authentic Enthusiasm When Harry asks for another excited sector outside fintech, Stefan rejects the thematic premise, explaining Passion's strategy focuses on talented entrepreneurs rather than vertical sectors. Harry then asks about pitch presentation dynamics.15:17–16:54 · Guest teaching 2/10 Red Flags in Startup Pitch Decks Stefan cites cliché 2x2 competitive matrix diagrams as a pitch deck red flag. Harry adds his own insight that claiming to have zero competitors is an even worse red flag, which Stefan accepts.0:33–3:56 · Guest disagreement 0/10 Introducing Stefan Glaenzer of Passion Capital Harry introduces guest Stefan Glaenzer and asks about his entry into technology and VC. Stefan explains his PhD in option pricing and early entrepreneurial ventures leading up to Riccardo. The exchange is friendly and welcoming with no friction.3:57–6:10 · Guest disagreement 1/10 The Rapid Growth and IPO Success of Ricardo Stefan gently corrects Harry's assumption that Ricardo was his second startup, pointing out five or six mediocre pre-digital attempts beforehand. Harry asks standard seed-stage investment check size and equity percentage questions.6:11–9:45 · Guest disagreement 1/10 Post-Investment Collaboration and White Bear Yard Harry expresses genuine shock when Stefan mentions meeting 700 companies physically per year. Stefan educates Harry by breaking down the simple math across three partners to show it averages to just one company meeting per day per partner.9:46–12:39 · Guest disagreement 1/10 Handling Passed Deals and Investment Regrets Harry asks about missed deal regrets and Passion's interest in peer-to-peer lending, referencing specific portfolio names. Stefan offers broad perspectives on financial technology disruption and compares it with traditional banking.12:42–15:15 · Guest disagreement 2/10 Investment Criteria, Sector Focus, and Authentic Enthusiasm When Harry asks for another excited sector outside fintech, Stefan rejects the thematic premise, explaining Passion's strategy focuses on talented entrepreneurs rather than vertical sectors. Harry then asks about pitch presentation dynamics.15:17–16:54 · Guest disagreement 1/10 Red Flags in Startup Pitch Decks Stefan cites cliché 2x2 competitive matrix diagrams as a pitch deck red flag. Harry adds his own insight that claiming to have zero competitors is an even worse red flag, which Stefan accepts.0:33–3:56 · Harry pushing back 0/10 Introducing Stefan Glaenzer of Passion Capital Harry introduces guest Stefan Glaenzer and asks about his entry into technology and VC. Stefan explains his PhD in option pricing and early entrepreneurial ventures leading up to Riccardo. The exchange is friendly and welcoming with no friction.3:57–6:10 · Harry pushing back 1/10 The Rapid Growth and IPO Success of Ricardo Stefan gently corrects Harry's assumption that Ricardo was his second startup, pointing out five or six mediocre pre-digital attempts beforehand. Harry asks standard seed-stage investment check size and equity percentage questions.6:11–9:45 · Harry pushing back 0/10 Post-Investment Collaboration and White Bear Yard Harry expresses genuine shock when Stefan mentions meeting 700 companies physically per year. Stefan educates Harry by breaking down the simple math across three partners to show it averages to just one company meeting per day per partner.9:46–12:39 · Harry pushing back 1/10 Handling Passed Deals and Investment Regrets Harry asks about missed deal regrets and Passion's interest in peer-to-peer lending, referencing specific portfolio names. Stefan offers broad perspectives on financial technology disruption and compares it with traditional banking.12:42–15:15 · Harry pushing back 1/10 Investment Criteria, Sector Focus, and Authentic Enthusiasm When Harry asks for another excited sector outside fintech, Stefan rejects the thematic premise, explaining Passion's strategy focuses on talented entrepreneurs rather than vertical sectors. Harry then asks about pitch presentation dynamics.15:17–16:54 · Harry pushing back 3/10 Red Flags in Startup Pitch Decks Stefan cites cliché 2x2 competitive matrix diagrams as a pitch deck red flag. Harry adds his own insight that claiming to have zero competitors is an even worse red flag, which Stefan accepts.

speaking balance: gold is Harry, purple is the guest (3 minute bins)

0:00 · Harry 50.7% · guest 49.3%0:00 · Harry 50.7% · guest 49.3%3:00 · Harry 16.8% · guest 83.2%3:00 · Harry 16.8% · guest 83.2%6:00 · Harry 20.8% · guest 79.2%6:00 · Harry 20.8% · guest 79.2%9:00 · Harry 27.6% · guest 72.4%9:00 · Harry 27.6% · guest 72.4%12:00 · Harry 15.1% · guest 84.9%12:00 · Harry 15.1% · guest 84.9%15:00 · Harry 42.5% · guest 57.5%15:00 · Harry 42.5% · guest 57.5%18:00 · Harry 35% · guest 65%18:00 · Harry 35% · guest 65%
Sharpest disagreement ▶ 12:41 Subverting sector-based question

When asked to pick a sector outside fintech to get excited about, Stefan gently rejects the premise by insisting Passion Capital's only true sector is ambitious founders.

 Hardest push from Harry ▶ 16:39 Adding counter-perspective on red flags

Harry pushes back on Stefan's red flag example of top-right matrix placement by introducing an even worse red flag: founders claiming to have zero competition.

 Biggest teaching moment ▶ 8:53 Math behind 700 pitch meetings

After Harry reacts with shock to 700 annual founder meetings, Stefan breaks down the arithmetic across three partners to demonstrate that it equals manageable daily meetings.

 Harry holds his own ▶ 16:39 Highlighting 'no competitors' flaw

Harry demonstrates domain expertise in pitch evaluation by citing the classic 'we have no competitors' pitch line, forcing Stefan to concur.
the scores for every segment, with the reasoning behind each
ChapterTopicHarry as informed peerGuest teachingGuest disagreementHarry pushing backWhy
Introducing Stefan Glaenzer of Passion Capital 1200 Harry introduces guest Stefan Glaenzer and asks about his entry into technology and VC. Stefan explains his PhD in option pricing and early entrepreneurial ventures leading up to Riccardo. The exchange is friendly and welcoming with no friction.
The Rapid Growth and IPO Success of Ricardo 2411 Stefan gently corrects Harry's assumption that Ricardo was his second startup, pointing out five or six mediocre pre-digital attempts beforehand. Harry asks standard seed-stage investment check size and equity percentage questions.
Post-Investment Collaboration and White Bear Yard 1510 Harry expresses genuine shock when Stefan mentions meeting 700 companies physically per year. Stefan educates Harry by breaking down the simple math across three partners to show it averages to just one company meeting per day per partner.
Handling Passed Deals and Investment Regrets 2311 Harry asks about missed deal regrets and Passion's interest in peer-to-peer lending, referencing specific portfolio names. Stefan offers broad perspectives on financial technology disruption and compares it with traditional banking.
Investment Criteria, Sector Focus, and Authentic Enthusiasm 2321 When Harry asks for another excited sector outside fintech, Stefan rejects the thematic premise, explaining Passion's strategy focuses on talented entrepreneurs rather than vertical sectors. Harry then asks about pitch presentation dynamics.
Red Flags in Startup Pitch Decks 4213 Stefan cites cliché 2x2 competitive matrix diagrams as a pitch deck red flag. Harry adds his own insight that claiming to have zero competitors is an even worse red flag, which Stefan accepts.

Statements from this episode (12)

Assertion Supported
Stefan Glaenzer: Ricardo reached a 400 million euro market cap
“With a market cap, I think, of four hundred million euro or so.”
Stefan Glaenzer Mar 9, 2015 ▶ 2:56
Assertion Not publicly verifiable
Stefan Glaenzer: Ricardo grew by 1% to 1.5% daily at its peak
“This was a company growing one percent between one and one and a half percent On a daily base.”
Stefan Glaenzer Mar 9, 2015 ▶ 4:29
Assertion Partly supported
Stefan Glaenzer: Ricardo scaled from zero to 200 employees in 18 months
“We grew the team from zero to 200 people in, in 18 months or so.”
Stefan Glaenzer Mar 9, 2015 ▶ 4:38
Assertion Supported
Passion Capital invests an average of £200,000 in first rounds
“On average our investment is 200,000 pounds in, in, in the first round.”
Stefan Glaenzer Mar 9, 2015 ▶ 5:35
Disclosure
Passion Capital targets 15% to 25% equity in seed rounds
“Generally speaking, we look for equity somewhere between 15 and 25%.”
Stefan Glaenzer Mar 9, 2015 ▶ 5:59
Disclosure
Half of Passion Capital's portfolio launches from its White Bear Yard space
“Passion Capital runs a co-working space called White Bay Yard here in EC One in London, so more, more the east side than the west side of London, where half of the companies in which we have invested choose as their starting office.”
Stefan Glaenzer Mar 9, 2015 ▶ 6:24
Insight
Stefan Glaenzer: Excessive board meetings waste early-stage founders' time
“I've learned that the hard way as an entrepreneur, as an investor, you have to make sure that you're not wasting time of the entrepreneur. And too many board meetings might have the potential to waste time in very early stage companies.”
Stefan Glaenzer Mar 9, 2015 ▶ 7:37
Assertion Not checkable as stated
Passion Capital receives 2,000 pitches annually and meets 600 to 700 teams
“As a matter of fact, we see roughly 2000 new ideas being pitched to us in any given year over the last two or three years. Out of these 2000 ideas, we meet with, physically, we meet with six to 700”
Stefan Glaenzer Mar 9, 2015 ▶ 8:23
Assertion Partly supported
Passion Capital invests in 10 to 15 new companies per year
“So we tend to invest in any given year in 10 to 15 companies.”
Stefan Glaenzer Mar 9, 2015 ▶ 9:26
Disclosure
Passion Capital avoids gaming investments due to their hit-driven nature
“We tend not to do any games, gaming investments simply because we Just don't understand the segment, and it's a bit too hit-driven in our view”
Stefan Glaenzer Mar 9, 2015 ▶ 13:16
Opinion
Stefan Glaenzer: 2x2 competitive slides placing startups top-right are red flags
“You know, these diagrams, these competitive diagrams where you see all the competitive companies, and by some miracle, your own company always ends up in the top right corner, even though being, being just a startup, I've just seen too many of those.”
Stefan Glaenzer Mar 9, 2015 ▶ 16:16
Insight
Stefan Glaenzer: VC investments face a 6-to-9-month honeymoon before reality hits
“In the moment of investing, you're going to love them all, and then you see a honeymoon period between six and nine months, and after that, you come closer to the truth.”
Stefan Glaenzer Mar 9, 2015 ▶ 18:14
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