Outside SuperReturn in Berlin last week, there were protesters. Their worry: that money meant for pensions and public welfare might end up flowing into capital markets.
Here is the irony Nikolas Samios points out in the new Startup Insider episode with Jan Thomas. Germany has the opposite problem. It puts 0.1% of its pension capital into venture. The European average is north of 2%. Nobody is gambling the German pension in a casino. We are barely in the building.
That gap was the backdrop to the conversation, recorded the same week twenty-four funds presented the German Venture & Growth Playbook. But the part worth listening to is Nikolas taking apart the prejudice underneath all of it, that venture is simply too risky for serious institutional money.
His example: the Berlin pension fund that lost billions. People file that under "see, venture is dangerous." Except it wasn't venture. They made a handful of direct bets with no fund manager and no diversification, the kind of thing where a friend of a friend has a salmon farm and swears it's a great investment. Build a cluster risk like that and yes, you can lose everything. Spread across enough funds and portfolio companies, the probability of losing money drops below one percent. The failure wasn't the asset class. It was doing it badly.
Listen to the full episode by clicking here.