QX: Thorsten, after an initial station in the private equity transaction advisory at PriceWaterhouseCoopers and an intensive time working for Professor Roland Berger – first as his personal assistant, then as CEO of the “Roland Berger Stiftung” and his Single Family Officer, you decided to start your own business in 2009. Why did you take this entrepreneurial step? How was the transition like for you? And what line of business are you in?
Thorsten: When Thomas once approached me on applying for the executive assistant position of Professor Roland Berger I would not have thought that this becomes the starting point of an entrepreneurial step myself one day. Working for Professor Berger for six years I had the unique chance of learning from an eminent role model in international entrepreneurship. He basically made his fortune being and investing as an entrepreneur. Prior to working with him, I already had a love for hands-on value creation in private equity investments. But only through him did I discover that more entrepreneurially successful individuals should need what I was in charge of: Managing the whole value chain of an individual family-owned portfolio of direct private equity investments.
Hence the idea was born to set up Gohlke Family Equity Partners as a partnership, which does exactly that as mentioned above. The transition was gradual. I opened myself into helping other families and then found partners who joined me.
Today, we are four partners in two offices and offer a highly individualized and specialized investment approach. We originate proprietary dealflow, partner with our Principals when executing transactions, act on their behalf when required, help them acquire majority or minority positions, actively manage their investments, and engage in special situations. The bespoke nature of our services sets us apart from typical fund or club-deal structures. In order to perfectly align interests, we are entrepreneurs ourselves and co-invest alongside our Principals.
QX: How do you evaluate the state of the current entrepreneurial scene in Germany, and relative to the rest of the world?
Thorsten: The environment for entrepreneurial activity in Germany is currently excellent: Compared to most other countries, Germany offers a unique set up for young entrepreneurs when wanting to achieve their high rolling ambitions. The country offers an outstanding academic and technological infrastructure, well trained people, a stable economic and political environment, and the creative environment needed to develop new ideas.
The only critical point to mention is the access to sufficient venture capital. The German VC market is still significantly underdeveloped compared to other countries, especially the USA. Whilst this may cause financing issues for local founders and young entrepreneurs, for investors it offers a unique and unrivalled risk-return-profile for early stage investments.
QX: As part of QX’s initiative to promote entrepreneurial spirit and action, we are introducing a new concept this year called the “QX-Equity Lounge”. The idea is to anchor on the synergies within the QX network by bringing together two groups of members: a) investors that wish to invest in quality businesses or and promising teams and b) budding entrepreneurs with fresh ideas or growth projects that require some form of capital to move forward. What are your thoughts on this initiative?
Thorsten: What I particularly like about the QX-Equity-Lounge is the fact that participants – investors and entrepreneurs alike – share similar enterprising values. Investors on the one hand can use this platform as a basis of “pre-agreed” mutual trust and a QX-specific type of entrepreneurship they reasonably can expect. On the other hand, the entrepreneurs can be assured that participating investors generally buy into their ideas of successfully building businesses. We have all lived through this network one way or the other. I think this is a specifically interesting and mutually benefiting one.
QX: You and your team have supported us strongly throughout the whole project, especially in assessing the entrepreneurs that have applied. For our pilot event on the 12th of June 2014 we have jointly selected five companies out of many applications. Can you give us a brief idea of what these companies do?
Thorsten: We have seen a variety of young and interesting start-ups out of the QX network, some of which offer very unique and distinct characteristics. We have selectively chosen those companies that we believe follow the right global or regional megatrends or which have the most capable founding teams. As a result, at our event we will see companies active in big dataanalytics, cloud testing, med tech innovation, low-cost accommodation and a rather special food and restaurant concept in Asia.
QX: What are some essential criteria you put into practice when looking at new businesses like the ones described before?
Thorsten: On one hand we look at more “technical” criteria: Given that a start-up is trial-and-error by the day – how flexible is the business model if it were to be applied to a different way of value creation? Can it be pushed to really benefit from economies of scale? Can it be further developed towards other product or service categories, industries, customer segments once launched? What is the quality and sustainability of earnings to be expected? Which partners does the start-up rely upon? What are the key activities towards success and do the resources available match? Is the cost-structure sustainable and provides for a lean start-up?
On the other hand, soft factors are very relevant, too: Does the management team combine all key competences needed (technical, financial, marketing etc.)? Have they been successfully working together before? What is the entrepreneurial track record of each management individual? What is the financial commitment of the team? How resilient do we expect them to be in view of possible “failure and back to square one” scenarios? What’s the degree of intrinsic motivation, self-organization and problem-solving capacities the team is able to deploy at any given point in time (at say 0200 in the night)?
This can of course only be an incomplete summary of a much deeper analysis an investor will have to run. Analytics for a more developed business or one in distress would look somewhat different.
QX: What is your passion?
Thorsten: Family first! If you try to build a professional partnership there are not many hours left for private passions. This is why I enjoy being with wife and kids (1 and 3) on the playground, at the lido, bicycling, painting, whatever, as often as I can. Other than that I enjoy indoor cycling and fitness classes at the gym.
QX: Thank you for this interview and again also for you strong support throughout the last months! So, last but not least: What is your personal vanity?
Thorsten: This goes out to the start-ups of this world: Revenue is Vanity, Profit is Sanity – but Cash is King!