EP09 - Building Trust Before Chasing Valuation

Patient Capital, Risk Mitigation and the Reality of Early Stage Investing

Three people sat at the table.
Peter Kovacs. Károly Szántó. And myself.

Different backgrounds. Different journeys.
One shared question.

How do we build ventures in MedTech and Biotech that actually survive long enough to matter?

The conversation was not about hype.
It was about risk. Real risk.

We discussed startups and spinoffs that struggle to balance science and the market. We spoke about co-investors. About skin in the game, family offices, corporate capital, and the difference between transactional money and patient capital.

Early-stage investing looks simple when you reduce it to slides and numbers.
In reality, it is neither simple nor predictable.

This is especially true in MedTech and Biotech. These are not markets where speed alone creates success. Regulation, clinical validation, go-to-market complexity, and long development cycles fundamentally change the rules.

Capital matters.
But capital without structure, alignment, and execution creates risk, not progress.

The Real Stakeholders in Early Stage Ventures

When we discuss early-stage ventures, we often focus solely on founders and investors. That view is incomplete.

The real stakeholders are startups and spinoff companies that sit between science and the market. Many of them suffer in silence. Strong technology. Weak structure. Brilliant research. Limited execution capacity.

They do not fail because the idea is wrong.
They fail because the gap between innovation and execution is not bridged early enough.

This is where the second critical stakeholder comes in. Co-investors.

Not just as a source of capital, but as partners in de-risking.

Skin in the Game Is Not Optional

One concept kept coming up in this conversation. Skin in the game.

Skin in the game means more than writing a check.

It means shared exposure. Shared responsibility. Shared consequences.

When all parties invest time, expertise, and capital, behavior changes. Decisions become more thoughtful. Incentives align. Mistakes hurt everyone, not just the founder.

Professional de-risking is not a side service.
It is the core offering.

De-risking means validating assumptions early.
It means supporting execution in regulatory strategy, go-to-market, clinical planning, and organizational setup.
It means reducing professional failure, not just financial loss.

Two Investor Profiles That Actually Work

Instead of categorizing investors by labels, it is more useful to look at how they operate.

In practice, two investor profiles consistently work well in early-stage MedTech and Biotech.

The first group consists of investors who are not deeply domain-specific, but who have a clear investment thesis that includes deep tech or MedTech. Because they are not specialists, they need partners who are. They need experience, pattern recognition, and operational support to validate and de-risk opportunities.

The second group consists of investors who are already deeply embedded in the domain. These investors understand the regulatory landscape, the clinical realities, and the path to market. With them, you can double down. Execution becomes the focus. Synergies emerge naturally.

What does not work is acting as a pure service provider.
If there is no shared risk, there is no additional value.

Why Angel Investors Still Matter

In early-stage investments, angel investors have a real place on the cap table.

Not because of ticket size, but because of proximity.

Angels are often hands-on. They show up. They support founders when things are unclear. There is no such thing as too much support at this stage.

Their value is not measured in valuation uplift.
It is measured in avoided mistakes.

At the other end of the spectrum, corporate venture capital, especially from pharmaceutical companies, can be extremely valuable. Not as fast capital, but as long-term strategic guidance. They understand what makes a company attractive in seven to ten years.

Both have a role when aligned.

Family Offices and Patient Capital

Family offices are often described as patient capital. That is true, but it is not the full story.

Family offices are deeply personal. Many are driven by legacy, lived experience, or a connection to a specific disease or technology. This changes how decisions are made.

With family offices, the relationship comes before the transaction.
They want to know the people behind the company.
They care about values before valuation.

This also makes them difficult to approach. There is no shortcut. No cold emails. No generic decks.

Introductions matter. Trust matters.
You build a relationship first, and only then do you talk about collaboration.

In contrast, venture capital often operates on a go-or-no-go rhythm. Fast decisions. Clear criteria. Both models have value, but they serve different purposes.

Culture and Geography Matter

Even within the same investor type, cultural differences play a major role.

A family office in Asia operates differently from one in Switzerland. Expectations around relationship-building, time investment, and trust vary widely. Ignoring this leads to frustration and missed opportunities.

Some investors immediately understand models focused on de-risking and execution. Others struggle to think beyond conservative number checking. This is not a judgment. It is a mismatch.

Trying to convince the wrong partner wastes time.

Honesty saves it.

Why Not Every Investor Should Be a VC

Many high-net-worth individuals and family offices believe they understand venture capital until they try to operate like a venture capital firm.

The reality is harsh. Portfolio management, due diligence, and venture dynamics are not intuitive. This is why most who try regret it.

The more sustainable model is participation as LPs.
Even better, as part of syndicates or fund-of-fund structures.

This allows involvement without operational overload. It also aligns incentives properly.

Value alignment still comes first.
Do we share the same mission?
Do we operate in the same geography?

If those conditions are not met, the structure will not fix it.

Small Funds and the Shift in Venture Capital

Venture capital has changed.

Large funds have become institutions. Management fees have grown. Incentives have shifted. Comfort has replaced urgency.

Statistics show what many operators already feel. Smaller funds below 50 or 80 million consistently outperform. Not because they are smarter, but because they cannot afford to fail.

They are closer to the founders.
Closer to execution.
Closer to reality.

A management fee will not save a small fund. Delivery will.

LPs are noticing. There is growing openness to emerging managers, first- and second-fund managers, and domain-focused strategies. The industry-agnostic approach is losing relevance.

Vertical focus is no longer a niche.
It is a necessity.

The Narrative That Actually Works

The narrative is not about disruption or speed.
It is about de-risking, execution, and alignment.

Building ventures that last requires more than capital.
It requires systems, people, and patience.

The goal is not to move fast for the sake of it.
The goal is to reduce avoidable failure and create real impact.

This is not ideology.
It is what the data, the market, and experience all point to.

Timecode:

00:00 Introduction to Key Stakeholders

00:22 Types of Co-Investors

01:09 Value Proposition and Commitment

02:10 Investor Specialization and Synergies

03:26 Role of Angel Investors

04:02 Corporate Venture Capital

04:44 Family Offices and Personal Touch

08:56 Challenges in Different Regions

09:32 Building Relationships with Investors

10:34 High Net Worth Individuals

18:02 Micro Funds and Emerging Managers

19:51 Conclusion and Future Outlook

Links:

Uniprisma: https://uniprisma.com/

Meijer & Co.: https://meijerandco.com/

Personal Website: https://www.thijmenmeijer.com/

Guests:

Peter M. Kovacs Personal Website:https://www.petermkovacs.com/

Károly Szántó Personal Website: https://www.karolyszanto.com/

Transcript:

Peter M. Kovacs: So we talked about the very important stakeholders, which are the startups and spinoff companies, how they are suffering, how we can find the gap, how we can solve the gap, and how we can build them up and support them to reach the visibility and the exit level. And also to get attractive for the investors.

We also have a very important stakeholder in our model: the co-investors. What kind of co-investors do we work with, what kind of co-investors are we expecting to collaborate with? What are the main differences for us between the different types of investors? How do you see this?

Károly Szántó: I would start maybe not with the types, because as we discussed earlier, there are ways to work together with angel investors, institutional investors, VCs, and in some cases corporate venture capital and other investor types. I think, again, it's about the value proposition—whether there are strong synergies between the investor partners. We collectively invest a lot of time and professional services, as well as capital from your side, Peter. So we have skin in the game. I think this is the most important part: how you can prove that you believe in something. You have skin in the game. Otherwise, if we screw up, it'll hurt all of us. This is the commitment and dedication apart from everything we have said. Our professional de-risking and risk mitigation is our core offering.

I see two kinds of investors that could be interesting. One is not so much domain-specific, but maybe in their investment thesis, med-tech is one focus among other deep tech interests. Because they're not so specialized, they need a partner who does specialize in this to provide the knowledge and experience.

Peter M. Kovacs: And the experience.

Károly Szántó: Exactly. Decades of experience in that segment to validate and to de-risk. So we can bring that to the table, but not purely as a service provider, because then that would be weak.

Peter M. Kovacs: There's no additional value. Not enough additional value.

Károly Szántó: Yes, exactly. And then the other type is deeply embedded into the med-tech or biotech domain already. We can double down on the segment, and most probably we'll find strong synergies in the execution part—in the regulatory, the go-to-market, the clinical, the testing, and all that. So I think these are the two ways to approach it.

And because we are dealing with early-stage investments like pre-seed and seed mainly, at least in this region, angel investors have a place on the cap table. One great thing about angel investors is they're usually very hands-on, and we need hands-on support. There is no such thing as too much support. But then if you look at the other extreme on the scale, which would be corporate venture capital—perhaps from a pharmaceutical company—again, they are very valuable. From that perspective, they can provide professional input and guidance on how to navigate and how to build a company that will eventually be very attractive for a pharma company, maybe seven to ten years down the line. How do you see the other conditions of an ideal partner?

Thijmen Meijer: I would also like to loop in family offices that are very specific on deep tech and med-tech. Usually, they are run by somebody that has exited actually, or has family wealth deep inside biotech or med-tech, and doesn't want to go blindly with a VC but wants to have professional investors to mitigate that risk completely.

Peter M. Kovacs: I see that family offices are extremely well represented in Singapore. In Singapore today, there are over 2,200 family offices for a 6 million population country. It's a huge number. I see that family offices focus more on the personal part. I accompanied one of my biggest portfolio companies to a family office event, and they want to spend a couple of days with you to know you very well. The personal touch is very important for them.

Also, it was very interesting that I've seen many times family offices focusing on a dedicated disease or a dedicated tech because they have some relationship in the past or their family is related because of some illness or some other experience—positive or negative. I see family offices as significantly different from VCs and institutional investors. Their financial due diligence is a bit different, and this personal touch is a bit more important. I see that very early-stage companies could be more successful not because of the ticket size, but because of this personal touch. If you find a very good founder and CEO with the personality that can present this impact, it's more touchable for a family office or angel investor than VCs. Based on my own experience, VCs are often just about numbers.

Károly Szántó: I love that you brought in the family offices. They are very much value-driven and impact-driven, and they are deeply committed to whatever they're committed to because of personal reasons of the founder or the family. But on the other hand, they are very difficult to approach. It's not a quick game; it's a relationship. I remember a couple of days ago you mentioned your event with family offices, and I had similar experiences. When you get in contact with a family office, you must not talk about business first. It's about values.

Peter M. Kovacs: Build a friendship.

Károly Szántó: Absolutely. And then if it resonates and it's built up authentically and there is a match, then of course you will find ways to collaborate. But it's not transactional. Whereas with a VC, it's absolutely New York style: go, no-go.

Thijmen Meijer: And an intro as well. Everybody said to get an intro from somebody else they know—friends or family within or outside of the family office—who can vouch for you and basically say, "This is a good one." No cold emails, no cold calls. Don't send a 14-page slide deck or anything like that. Really build up that relationship. That was quite interesting to hear.

Peter M. Kovacs: Also, I see quite a difference between the same type of investors. For example, a family office in Asia versus a family office in Switzerland. Based on cultural differences, it's even more difficult in Asia because the culture to build this friendship is even more intense than in Europe or the US because of tradition.

What do you see as the best partner for us? I see a difference in that I talk with many potential partners in Asia, as I mentioned before, and some of them understand the model and how significantly we can decrease the risk—the financial risk and professional failure of the company. Some of them understand and are more than happy to collaborate and see something new. But many of them just don't get it. Maybe I couldn't deliver the message well, or not yet. Some of them cannot think out of the box because they are still in the conservative model, just checking the numbers. How do you see it here in Europe?

Károly Szántó: This year I got in contact with some high-net-worth individuals, very successful in real estate. I was introduced to them; it was not a cold call. We started to talk, and our discussion naturally went into the investment side. They considered themselves experienced in investment, and then I found they had absolutely no understanding of how venture capital works, which is okay. I explained it, and they just couldn't get their head around it. They were like, "If you invest so much money, why would you only have 10% ownership or 20%?" The whole logic of venture capital was out of scope for them.

One thing I learned is that I would rather be very honest with myself and the other person: maybe I like you as a person, but the way we operate is so different that it won't work. We cannot force it. Also, I think once we build up something bigger and we can present it, they would be happy to join in later as followers.

Family offices are called "patient money" by many investors because they have patience; they have time. They're not VCs. They want to leave a legacy; it's a whole different story. I think one nice way to build up a lasting relationship with a family office is to suggest they join in from time to time with a smaller ticket directly into one of the startups that we invested in. This way we can learn about each other and fine-tune our collaboration model. If it works and we are aligned, then we can take it to the next level, which usually is launching a VC of our own and positioning the family offices as LPs. Many family offices have tried themselves as a VC, directly investing, and 99.9% of them regretted it. They're not equipped operationally for due diligence or portfolio management.

They still want to be involved, so the best way is them becoming LPs. More and more family offices are realizing they shouldn't do it on their own, so they form syndicates. They join together and work as a fund of funds and invest in several offices. I think this is the right way to go. But then again, it's value-aligned. Does this syndicate share the same values with us? Do they want to make an impact through biotech and med-tech? If yes, that's already good. Then there is the geographical focus and stage. Some are only interested in growth stages, while some will be interested in early stages. We need to go out and spend time with these people, not selling anything, but rather just asking the right questions.

Peter M. Kovacs: Offering an opportunity for them. I think very few players on the market are able to work in this field and provide this objective risk mitigation. If somebody understands what the real risks in med-tech and biotech are, they can understand the support that we are providing.

Károly Szántó: Thankfully, I read a lot of statistics and reports on VC to understand the trends, and our investment thesis is very much supported by statistics lately. What happened in venture capital is that the successful players became giants, but their business model has shifted because they are continuously charging the 2% management fee for their LPs. I just read that Andreessen Horowitz, one of the largest and most successful, pulled in $700 million only in management fees because they are managing billions and billions. The motivation is not really aligned. If your entire business model as a VC is to charge a management fee, then you become comfortable and values are misaligned.

Also, the return on investment decreases. What is interesting is that micro-funds and small funds—below 50 million euros or let's say even 80 million—produce much higher returns. Why is that? Because they're very motivated, effective, down-to-earth, and they cannot allow themselves to fail. The management fee will not save you if you're running a 50 million fund. You need to actually make miracles.

Now LPs are also reading these statistics, so they learn. There is a new wave of LPs opening up to emerging managers managing small funds below 50 or 80 million. I believe these funds must be vertical and domain-specific. The industry-agnostic approach is over. The way we come together and what we offer is supported by these trends. We are in the right direction at the right stage. Our narrative should be that we are de-risking, executing, and eventually producing higher returns and making much more impact.

Peter M. Kovacs: Hopefully, we prove that we were pioneers in this field and we can introduce a successful model for the ecosystem. I can just wish good luck for all of us and we'll continue from here. Thank you.

Károly Szántó: Thank you. Thank you, Peter.