When establishing BIC Angel Investments, his purpose was to be a more active investor. Normally, angel investors choose the agreements with the entrepreneur, but doesn’t take notice of the course of events so much. Some guidance may be carried out from financial support but it’s not that assisted on the subject of how the company will be managed. Here, Dr. Joachim Behrendt, CEO of BIC Angel Investments, wanted to change this. “Not limited to only obtaining finance, we will support the entrepreneurs actively at each phase”.
“We want to support the companies whose products and services are ready and which has customers. The companies who need a professional organization, many more employees, production center, marketing department and dependingly money. We give active support to a company in these conditions. We determine strategy, we show them way for growth, we educate them. After two years of active support, our passive support for two years continues. In the two years following this process, we start to stand back.”
“We get the better of internet-based projects. I would like to make investment on projects such as organic foods, alternative energy, alternative vacation but I don’t have a command of those fields. We invest the business we know best.”
Angel investor is a concept that the ones who are not interested in the subjects of economy and finance are distant and who have difficulty in guessing its meaning. In our country where the economy grows quickly, we meet a different concept, a different job field on every passing day. Angel investment is one of those. We asked this notion which recently started to spread in our country to one of the dandiest names in their fields, founder of BIC Angel Investments, Joachim Behrendt and asked him to explain angel investment as both academician and investor. One thing led to another, we had the opportunity to actualize an extremely pleasant conversation with the CEO of BIC Angel Investment & Services and board chairman of Nexum Group Dr. Joachim Behrendt from angel investment to the future of the investment in Turkey, from his motorcycle passion to the vacation stories. Enjoy…
Angel investment in Turkey is a field which grows with a great speed but newly. First of all, could you please tell us what is angel investment and its history in our country?
Yes, the story of angel investment in Turkey dates back to one or two years ago. I give lectures on entrepreneurship at Boğaziçi University for two years. Because it’s my profession and field, I made a lot of researches about it and always read. In this period when the angel investment spreaded through America and Europe, I couldn’t see any initiative in this subject in Turkey. There were only 212 limiteds. I had the opportunity to talk with them about the subject and their working style. They attended my lessons and conveyed their own experiences for an hour. Nevzat Aydin, the founder of yemeksepeti.com and its CEO, was one of the names who attended the lessons and conveyed their experiences.
Approximately two years ago, Galata Business Angels was founded for the first time. I joined them a year ago. However, about two weeks after my joining to Galata Business Angels, I decided to found my own company. When establishing BIC Angel Investments, my purpose was to be a more active investor. Normally, angel investors choose the agreements with the entrepreneur, but doesn’t take notice of the course of events so much. Some guidance may be carried out from financial support but it’s not that assisted on the subject of how the company will be managed. We aim that BIC Angel Investments will support the entrepreneurs actively. We meet with them once in a week and compare notes in strategy development. We help them as board members in developing the business and we give professional services such as accountancy, human resources, optimization if they wish. We aim that they fly with the company they founded and turn an initiative we took in the beginning phase into a full professional company. Our only term in the management of the company we make investment is that the accountancy and the financial departments will be operated by our team. Our financial manager operates financial managership of all the beginner companies. We work with international auditors who are very successful in their jobs. And the accounts should be kept by us. Investment advisors see the numbers only as numbers and the numbers in Turkey are not very clear everytime. One of the biggest handicaps of Turkey is this. We want the numbers to steer the company management. We absolutely want to hold the control of these departments because if you have a good accountancy department and clear numbers, you can see the future of your investment more clearly.
Well, is entrepreneurship is madness today? It’s a stressful course, isn’t it?
Sure it’s stressful. When you undertake an enterprise, you spend the large part of the day with this business and you can earn no money in first two years. You always spend money from your savings. The beginnings are always difficult but if you succeed, your business becomes your life. If you are an entrepreneur, it’s not possible for you to separate your business life with your private life. You always do your job but at the same time, you continue your private life. You can be obsessed with your business for your dreams to come true. Stressful, because the risk is high. If you can’t succeed, you may lose everything in your hand going bankrupt in two years.
Is this situation same in Europe or America?
There is no entrepreneurship culture in Turkey. When you apply to a job, if you write that you had initiated and gone bankrupt, this is certainly a negative situation for you. This is very normal in America. In America, you always try. You start a job after university education, then you try to set up your own business. If you fail, you return to the point you have started and you try again. This is reacted extremely normally.
Europe is also conservative in this particular. Of course Turkey is more conservative but the situation is changing. When you take a look at the last three years, you can see that the entrepreneurship has constantly developed. Also the government is always supporting the initiatives.
Does Turkey have a suitable ground with entrepreneurship and investment?
Absolutely. Because Turkey is a developing country, there are so many options. When you come up with an idea in Germany, you see that many people around is trying to actualize the same idea with you or have actualized already. You have the chance of doing the things never thought of before, here. You can quickly be successful by adapting the projects which have been successful in other countries but absent in Turkey to the market of Turkey. It’s very hard to get to the top in the countries which have completed their developments in this field such as Switzerland, France or England but it’s not like that in Turkey. There are so many SMEs here, when you stand out amongst SMEs, you find yourself as a big company. Because there aren’t so many middle-scaled companies in Turkey, being successful is much easier.
Mark Zuckerberg has achieved an incredible thing in America. Now, everyone is in pursuit of being Zuckerberg. But it seems like these stuff is proceeding harder in Turkey. When you embark on an enterprise in Turkey, your biggest competitor is Turkey again…
Actually, it’s a bit dependent on the industry. We work with beginner companies in Istanbul, Ankara and Izmir. The cultures of these cities are so different from each other. When you go to Ankara, you encounter ‘engineers’ and the engineers never think of marketing. In Izmir, they are in advance. They don’t have too much ideas about this subject. There are two different groups in Istanbul. In one group, the beginner companies which don’t perform marketing such as the ones in Ankara, take part. In the other group, there are highly professional companies. Some of them has partners who received education in America. Leading experts who join beginner companies are present. They do the marketing job much better. They do the marketing and sales department even better than the product itself. We are about to make our first three investments and one or two of them are in Ankara. The ideas and the products in Ankara are better. We can help them in marketing. The companies in Istanbul are much better in marketing themselves. They see themselves as the companies shown up with gorgeous ideas and try to pretend like that. Therefore, they want so much money for their shares. When you check out, you see that their ideas are not so good and they are imitations of the ideas which have been successful in America. So, it’s not so easy to find quality ideas in Istanbul. It doesn’t mean they are very good companies because they market themselves very well.
How can Turkish companies market their service to the world?
Firstly, Turkish companies should gain a place in the market of Turkey. It may be Mena region after Turkey. After that, they can open up to the rest of the world. Without having an important place in your own country, you can’t expect anyone to make investment for you to globalize. Turkey also has an extremely attractive market. There is a population of more than 70 million and there is an economy getting better every passing day. They can open up to neighbor countries after being succeeding in Turkey. Turkey’s position is strongly convenient for that.
This situation is valid for e-trade sites but can we say the same things for content sites? Doesn’t English seem as the right choice for social networking or contents?
The competition in English is so great. I can give examples from my own experiences at this point. I prepared a blog in both Turkish and English in consultancy. Turkish version was visited 10 times more than the English version. English was less attractive because there are numerous sources about this subject written in English. The case is similar for social networking and content sites. The competition is far too much. It’s much more rational to translate your content into English, Chinese or which language you want after taking your own platform to a certain point in Turkish.
What kind of characteristics do angel investors look for in the companies they will make investment?
There are very different angel investment groups. But I can tell you what we look for. We look for a beginner company. The thing we search is not only an idea. Making investments on ideas is the business of seed investors. Angel investors come into play in the phase in which the ideas turn into companies.We want to support the companies whose products and services are ready and which has customers. The companies who need a professional organization, many more employees, production center, marketing department and dependingly money. We give active support to a company in these conditions. We determine strategy, we show them way for growth, we educate them. After two years of active support, our passive support for two years continues. In the two years following this process, we start to stand back.
Do all the angel investors play an active role in the management of the company like you?
At least in Turkey, no. They are either busy with their own works or they have money but no time. They make investment but they don’t intervene the operations of the companies they made investment. However, beginner companies need support along with the money. Normally, angel investors are the young retireds with money needing a different challenge. But in Turkey, the people who are still in business life trying angel investment and they can’t provide the support that the beginner companies they make investment need.
In angel investment, not only giving the money, mentorship is also needed to use the money positively. We have negotiated with about 150 beginner companies and yes, they all need money but 100-120 of them really demand active support. That’s what we try to do.
Can investors get only consultancy service from you in a project that they really trust?
This was before the notion of angel investment. There are companies who give consultancy service to you in every subject from how to establish the company to how to communicate with the customer. They are closer to the seed investment. Investing a small amount of money, they support your company as mentor. Embryonix in Izmir and Viveka in Ankara are really very good on this topic. We can count Etohum and Initiative Factory in Istanbul. These incubation centers work more closely to the thing you mean.
Do you prefer to make investments on only the projects over internet as BIC Angel Investments?
I don’t know the other fields at all! We get the better of internet-based projects. I would like to make investment on projects such as organic foods, alternative energy, alternative vacation but I don’t have a command of those fields. We invest the business we know best.
We examine the projects coming to us, company structures, their founders and ideas and how they aim to earn money. Some entrepreneurs come with the ideas they think that the users will be delighted at. When we ask them how they think to earn money, we get advertising as the answer. It doesn’t work with only advertisements. There are so many internet sites and all of them look for advertisements. The number of the companies directing the advertisements is certain and they are very careful in this connection. Internet sites should find the ways of earning money with membership system or differently without depending on advertisements to survive.
Let’s talk about the stuff exclusive of the business. You are in Turkey for many years. Your wife is Turkish and you have a cute daughter named Deniz. After all these years, do you still feel like a stranger in Turkey?
Actually, yes. I came to Turkey for the first time in 1999, I took vacation in Kusadasi and Fethiye but my vacation was not limited with Fethiye. I went to Lake Van, Diyarbakir, Erzurum by my own vehicle and made a four-week tour. Because I couldn’t speak Turkish in those times, I had some difficulties. When I came back to Marmara University to give lectures again, I got used to Turkey some more. It has a great effect on this that the people of Turkey are very friendly. Now, some of my friends say that I have become Turkish a little bit!
Do you spend your holidays in Turkey?
We have a summer resort in Datca. Generally, we spend Augusts in there. But unfortunately, I go on for holidays very often! I work for 14-16 hours and sleep for 5 hours a day. So, I try to take a holiday for a while every month. I was in Miami last month and went to Italy to go skiing in February. We had gone to Maldives in November. Before that, I made an Australia tour going to Sidney and renting a motorcycle. As I said, I go on for holidays very often.
We know that you have a passion for motorcycles. When did this passion start?
Yes, I came to Istanbul by motorcycle as recently as yesterday. I like to ride motorcycle very much. My passion for motorcycles started approximately 30 years ago. When I got my first driver’s license in Germany, I didn’t have money to buy a car. I had lived in Hamburg and worked in Lüneburg. I was covering 75 kilometers by motorcycle everyday. Later on, when I was 23 years old, I went on a 10.000-kilometer Europe trip including Germany, Switzerland, Austria, Yugoslavia, Greece and Italy by a second-hand Kawasaki Z400 for four weeks. My passion for motorcycles dates back to those years.
Which are your favorite venues in Istanbul?
Too many! I live in Etiler. I love Ortakoy and Yenikoy so much. I love Etiler Nispetiye Street too. I prefer Taksim for nightlife. Babylon comes first among the venues I prefer in Taksim. It must be because I like modern jazz and world music. I prefer Nisantasi for daily life and shopping.