Innovative Approaches to Investing
Technology can radically improve the chances of success for startup founders and investors alike, as this DLD Munich session with Eva-Valérie Gfrerer (Morphais), Michele Romanow (Clearco), Joshua Browder (DoNotPay) and Andreas Liebl (appliedAI) shows.
Access to capital is the main hurdle entrepreneurs need to clear when starting a company. Typically, venture investors will take a stake in each company they finance – but Michele Romanow had a different idea.
She proposed a temporary partnership instead, telling founders, “I just want 5 to 10 percent of your revenue until you pay me back my capital plus 6 percent.”
The concept is different from a loan, as she makes clear, and it has turned her investment firm Clearco into a global giant, which has invested nearly $4 billion in over 9,000 different founders around the world.
“We really believe that no matter who you are, if your data shows that you have a great business, you should be able to get access to capital”, Romanow says.
A similar idea drives Eva-Valérie Gfrerer, who observes that “in Europe, we have so much talent and entrepreneurial talent, but 90 percent of the deals that are being made by VCs are being made within their network.”
This is bad for investors and founders alike, she believes, because capital is allocated “in a gut-driven way”.
Her goal with Morphais is to make better investment decisions with the help of data and artificial intelligence. “The question is, how can we use technology to help us gain visibility”, she explains, “and find the right right entrepreneurs to invest into?”
Joshua Browder, meanwhile, wants to use AI “to replace all lawyers one day, starting with consumer rights” – and he knows from experience what it feels like to be turned down by potential investors.
“They said, ‘You’re crazy, it would never work’”, he recalls. But he proved them wrong. His company DoNotPay – the “world’s first robot lawyer” – is now automating a range of different legal claims, from parking tickets to refunds from landlords to canceling subscriptions.
“All of the areas that a lawyer wouldn’t want to get out of bed for”, Browder says.
The entrepreneur is also active as an angel investor. “I specialize in investing in high school and college dropouts”, he says. “As an angel investor, and I help them tell the right story, get some revenue, so they can go down other paths as well.”
Eva is CEO and Founder of Morphais, an early-stage VC firm that has developed its own AI technology to invest in exceptional founders. She created Morphais in response to biased and inefficient decision-making processes in the current venture capital industry, where extremely talented entrepreneurs continue to lack access to capital.
Michele Romanow is the Co-founder and CEO of Canadian unicorn, Clearco, the world’s largest e-commerce investor. Romanow started six companies before her 35th birthday. In addition to her work as an entrepreneur, Michele is a “Dragon” on the Canadian hit TV show Dragons’ Den.
Joshua Browder is the Founder and CEO of DoNotPay, a company that replaces lawyers with artificial intelligence. DoNotPay has raised over $25m from top tier investors, including Andreessen Horowitz and Index Ventures. Through Browder Capital he is also an angel investor into over 100 companies.
UnternehmerTUM • appliedAI
As Managing Director of UnternehmerTUM GmbH Andreas Liebl is responsible, among other things, for setting up the appliedAI initiative with partners such as Google and NVIDIA. With more than 50 partners the initiative is one of the largest in its field in Europe.