Angel investor: “Be ready to lose everything from day 1”
Investor René Rechtman has sold off companies to giants such as AOL and Disney. He believes the main obstacle for entrepreneurship in Europe is reactionary policies, but in his opinion some entrepreneurs also lack focus.
He has founded and sold several companies. He has recently left a job as Head of Non-linear Media at Disney to start a new company. And he is an Angel investor.
Rene Rechtman is known for selling companies such as GoViral and Maker Studios, and it is primarily in the media industry he places most of his investments. His area of interest is, however, not ruled by principle, though he rarely enters as the solo investor.
Often his investments are in collaboration with his good friend and former business partner Jimmy Maymann, who, amongst other things, is the former CEO of Huffington Post.
“We invest together and are completely aligned though our respective areas of focus vary,” Rechtman says.
He notes how they both have their strengths. Rene Rechtman himself focuses on the larger trends, trying to predict the tendencies to come, whereas the partner looks more closely into predicting business models. Together, he thinks they constitute a qualified and well assessed foundation for investments.
The tendencies to come
So, what are the major tendencies Rene Rechtman sees coming?
“We see certain things accelerating at the moment and some industries are developing more than others. Right now the media industry undergoes major changes,” says Rechtman.
He notes how Netflix has sparked a new wave of consumer services which the traditional players in the field struggle with. As a result, he believes clear cut opportunities are to be found in this industry.
“In addition, one has to consider all the fields possibly disrupted by artificial intelligence. It is an area of interest widely discussed. It will accelerate considerably,” he predicts.
Furthermore, Rechtman notes how knowledge on data in consumer affairs, financial technology, crypto currency and insurance are areas undergoing change and development, but where his lack of expertise within these fields makes him more cautious. He has, however, recently made investments within the insurance sector.
Many entrepreneurs don’t work hard enough
“The reason why I have invested in Airhelp and Tego is that I have an understanding of the fundamental issues associated hereto, but more importantly, the founders of the two companies are what I describe as ‘machines’. They are hard workers and extremely focused” says Rechtman.
He thinks many entrepreneurs are skilled in seeing the bigger picture and single out a potentially successful area for a product, but they lack focus and don’t work hard enough. The founders and the team are thus of most importance when he places his investments.
“The team means everything. The mistakes I have made in investments have all happened due to a team not good enough, not experienced enough or not focused enough. That’s when I have made my mistakes,” he says.
He has one piece of advice for the new angel investor facing the investor market.
“Keep in mind that this is charity. Be ready to lose all the money from day one,” he says.
Three pieces of advice for politicians
Today, René Rechtman is based in London. He has founded several companies in Denmark, but he thinks only few countries in Europe earnestly seek to encourage entrepreneurship. As a result, many startups make the move to the USA before they grow big.
“There is simply a lack of recognition of how important this area is for the future of our society and creation of work places,” he says.
He has three specific suggestions for political initiatives which can help Denmark become a front runner within entrepreneurship and new technologies:
- “There has to be more money in circulation. We simply need deductions or taxation reliefs as incentives for people to put more money in system.
- “When you invest your pension in Denmark, it has to be easier to invest in startups. Today, it’s possible to invest in Novo Nordisk or other major companies, but one can’t invest in startups. This has to change.
- “Make favorable circumstances for institutional investors. It will secure enough money in the system to transform good ideas into big companies, subsequently creating thousands of work places.”
- “You have to be almost insane to start your own business today, as there are very few structural incentives to do so. All countries should do like in the UK and make a so called Entrepreneurs Relief that allows you to only pay ten per cent of the first ten million punds you earn from an exit.”
About René Rechtman
Founder, CEO and investor. Has twice (2011,2012) been featured on Wired Europe’s list of the 100 most influential.
AdJug (sold to Dentsu), AirHelp, Bossa Studios, Business Of Fashion, Curiscope, Dragonplay (sold to Bally), FreeSpee, GameAnalytics (sold to Mobvista), Overwolf, Playbuzz, Qriously, RFRSH Entertainment, Spektral (sold), Zego Cover and Wonderbly.