For the last 4 quarters, venture capitalist Robert Brevelle continues to find himself in the top rankings for early-stage investors in the European marketplace. The European Angel Network, Cyber Security Solutions, and HSBC interviewed Robert to discuss his interest, strategy, and tips for the European startup community.

HOW DID YOU BECOME AN ANGEL INVESTOR? CAN YOU TELL US A BIT ABOUT YOURSELF?

Well, that is a long story. The short version is that I started in college as an unknowing entrepreneur. I was in Chicago and knew absolutely nothing about entrepreneurship, startups, or angel investing. I was looking for a part-time programming job while finishing up my first master's. I joined my roommate at a company, which turned out to be what we now call a dot-com startup. Once I understood the opportunities of sweat equity, it was on. I followed that up with stints at several other startups in Texas, in between working at Fortune 500 aerospace and defense firms. The sweet taste of exits continued to bring me back when the opportunities were right. Working in mergers and acquisitions at some of the larger publicly traded tech firms kept me in the global startup ecosystem, and as my trips to Silicon Valley increased, I made the natural transition from employee to entrepreneur to business leader to M&A to C-suite to boardroom to investing via angel networks to investing on my own and finally, leading my own family of funds.

THAT'S QUITE A LOT OF EXPERIENCE. DO YOU THINK THAT SORT OF DIVERSE EXPERIENCE HAS GIVEN YOU AN ADVANTAGE?

Yes. I believe it does. I invested my time and made personal sacrifices to gain that experience and knowledge. It was not by accident or chance. I planned my education and career to progress up the corporate ladder, starting with a strong foundation in engineering, physics, and math. Work experience and graduate degrees in engineering and business were the capstone. Having the technical, business, and finance skills along with the experience of being on both sides of multiple small and large transactions gave me insights and perspectives of key stakeholders. I know what it feels like to be an employee, executive, founder, bean counter, contracts reviewer, risk analyst, seller, investor, and buyer. It allows me to operate quickly and with minimal support staff. I can deep dive into the tech, financials, legal, and human resources while still managing the big picture.

WELL, IT'S WORKING! YOU WERE RECENTLY NAMED IN THE TOP INVESTOR RANKINGS ACROSS EUROPE. TOP 45 FOR SWEDEN, TOP 50 FOR GERMANY, TOP 50 FOR EUROPE, AND PREVIOUSLY, TOP 101 IN THE UK. IS THAT RIGHT, DID I MISS ANYTHING?

I think you’ve covered it. I try to keep a low profile in those sorts of public announcements and rankings. I am still not sure how exactly the researchers or journalists tied some of those investments to me. Like other angels, the investments are made through vehicles such as angel networks, funds, corporations, and other entities that pool and organize investors.

HAVE YOU RECEIVED SIMILAR ACCOLADES IN THE U.S. MARKETS?

Well, sort of. I have been ranked a top 10 angel investor in Silicon Valley and Dallas a few times. I’ve also managed a top 10 nationally ranked accelerator, and I was listed in the top 100 investors that support veterans. A year or two ago, I was ranked in the top 100 entrepreneurs and investors in the world. But there are only two awards that I really want, but those seem to evade me.

REALLY? WHAT ARE THOSE AWARDS?

Number 1 husband and Number 1 Dad. T-shirt or coffee mug with that on it will do.

YOU ARE TOO FUNNY. I AM SURE YOU'VE ALREADY EARNED THOSE AWARDS AND THE T-SHIRTS AND COFFEE MUG ARE COMING. A FUND MANAGER THAT YOU WORK WITH SAID YOU HAVE HELPED STARTUPS RETURN OVER $2B TO INVESTORS. A NUMBER LIKE THAT WOULD MAKE ME HAPPY. I CAN TELL YOU ARE HAPPY BECAUSE YOU ARE SMILING JUST NOW, BUT YOU DON'T SEEM COMFORTABLE. WHY IS THAT?

Well, I’m a private person, and I don’t particularly care for this sort of attention. I don’t mind interviews if it's what the companies and my fellow investors in the fund want me to do. The goals should be to promote the companies, the people who made a difference, and the positive impact we are making in the marketplace and community. Not on any particular individual, especially me.

THAT SURPRISES ME THAT A LOW-KEY AMERICAN SUCH AS YOURSELF INVESTS IN THESE HIGH-PROFILE EUROPEAN STARTUPS. WHAT BROUGHT YOU TO INVEST IN EUROPEAN STARTUPS?

I’m no stranger to the European marketplace. I worked for e2v and Leonardo in aerospace, defense, infrastructure, and medical solutions. Those two companies are amongst the oldest tech firms in their respective countries with an impressive history of advancing telecommunications, radar, aerospace, and med tech. They are global leaders and are responsible for impressive, world-changing advancements. Going back further, when I was the Executive Staff Officer for L-3, I was part of the acquisition team for L-3 TRL for about $175M. In that deal, I worked closely with Lehman Brothers and due to the defense and security implications, the UK MOD had to ultimately approved the transaction. My companies have been recognized as suppliers of choice for the European Space Agency and NATO. I’ve worked on flagship national projects in Finland, Italy, and the UK. I am very proud of our teams and the work we’ve done in Europe.

BEING BASED IN THE US, ARE YOU CONCERNED ABOUT RISK IN THE EUROPEAN MARKETPLACE? AS AN ANGEL, HOW SAFE DO YOU ASSESS THE EUROPEAN STARTUP ECOSYSTEM, ESPECIALLY COMPARED TO THE US OR GLOBALLY?

The ecosystem in Europe is mature, well-regulated, and sophisticated so it is as safe a marketplace and ecosystem as you will find anywhere. However, that same characterization may also be viewed as limiting innovation or speed to market. These are tradeoffs and challenges for investors to manage.

DO YOU SEE ANY DIFFERENCE IN EUROPEAN AND AMERICAN ANGEL INVESTORS?

It has been my experience that European investors, in general, are more globally minded. Europeans are more experienced in global markets and do a better job at understanding and overcoming those inherent challenges. They view non-Western markets differently than many Americans, who may assess those markets as higher risk areas to invest or operate (or avoid altogether). Europeans are typically more comfortable with complicated tax structures, at times higher tax rates, and view foreign or in-country agents and their fees as the norm. The thought of such things may cause many of my fellow American investors and I to pause. Possibly as a result, European angels travel more and further to find new opportunities and to follow-up on their portfolio. In my discussions with my European counterparts, their larger overhead reflects these costs. A contributing factor to this may be the different size of markets and startup ecosystems. For example, the US has the benefit of Silicon Valley and a few other robust ecosystems with homegrown and imported startups coming from all over the world. Many of the best and brightest come to the US to pitch their companies or to set up shop domestically. I have yet to see anything that comes close to the breadth and depth of deal flow in Silicon Valley.

WHAT ARE YOUR THOUGHTS ON EUROPEAN STARTUPS AND COMPANIES IN GENERAL? HOW DO THEY DIFFER FROM THOSE IN THE AMERICA?

It's difficult for me to separate the startup from the founder. As you know, I deal with very early-stage companies. In general, I find European founders to be more professional, charming, well-educated, investor-friendly, and have put in the time and resources to develop themselves into subject matter experts, even if it's focused on a particular niche or subsegment. Those characteristics are of different value to different investors. To me, they are of incredible value. In the last several years, many of the US startup ecosystems have promoted a certain type of founder who has attitude, spunk, focus on some political agenda or social cause, and in turn, places less value on education and subject matter expertise. Many fall short in understanding the technology, engineering, or physics behind their offering, and more are frankly dismissive of the financial analysis skills needed to build a truly competitive startup. These founders require substantial investment to pay for mistakes and the subsequent hiring of key team members as CFOs, CTOs, engineers, developers, etc. At this point, investors are paying for the founders on-the-job training and lack of preparedness. My experience in Europe is that the founders have invested more in themselves to build those skills. It is worthwhile to note that in many European countries, college degrees, advanced degrees, and specialized education and training are free or inexpensive. That may be a factor.

WE UNDERSTAND YOU ARE CURRENTLY THE LEAD FOR A $250M ACQUISITION INVOLVING A U.S. FIRM, BUT WITH EUROPEAN BUYERS. WHAT CAN YOU TELL US ABOUT THAT DEAL?

That’s what has been keeping me busy as of late. I am the lead, but the exact amount of the deal is confidential as are many of the stakeholders. But yes, what is already available in the public space has identified some of the European stakeholders. It is an extremely complicated deal in the sense that there are so many assets, long-standing customers, and contracts to novate. It is definitely not a startup, but the investor-relations issues are the similar as is the legal effort. We have way too many lawyers and financial analysts involved, and part of my focus has been on reducing the size of that portion of the team while improving the capabilities. The changes are already showing positive results and should significantly reduce transaction costs for all. The investors are pleased. The deal is essentially done. All that’s left is paperwork.

WHAT ADVICE OR WHAT DO YOU HAVE TO SAY TO OTHER AMERICAN ANGELS LOOKING TO GET INTO THE EUROPEAN MARKET?

What’s taking you so long?

WHAT HAS BEEN YOUR STRATEGY ON PICKING EUROPEAN INVESTMENTS?

It’s simple. I look for exceptionally smart founders surrounded by exceptionally smart people who work harder and smarter than everyone around them. They must be of like mind when it comes to ethics, objectives, results, and feedback. To me, there is no substitution for hard work, intelligence, and ethics.
Some of my old founders at Tech Wildcatters gave me a sign that read, “no sizzle, all steak.” I think that sums it up.