What does it take to bootstrap a fund focused on transformative climate innovation?

Thanks for joining me today, I wanted to start with the article you wrote for Sifted, in which you said that climate funds are too generic. I’m interested - how did you end up in synthetic biology, and why is this the route you’ve chosen to focus on?

I think, generally speaking, if you want to start something new and you want to increase your chances of success, you have to break some of the conventional rules and do something that maybe other people aren’t paying attention to.

When I said climate funds are a little bit too generic, I meant that over the last five years, we’ve seen an explosion of people setting up climate funds with good intentions, trying to address climate change through technology and entrepreneurship across virtually all sectors.

But if you really look at the heterogeneity between those sectors, and the realities of decarbonization, you can very easily get hung up on the broad spectrum of technologies, founder profiles, customers, and go-to-market strategies you have to deal with. So, if you’re working with climate as a framework, it’s still way too broad in my opinion, and as a fund in a competitive industry, you will ultimately suffer from this.

How does this broader challenge tie into your focus on synthetic biology?

Well, if you look at the up-and-coming generations, younger founders starting companies, I think it’s become imperative that those companies have a green DNA, they intrinsically think about sustainability.

I think there will be very few startups that are being started without some sort of sustainability angle, and therefore I do believe that even every generalist fund will in the next 10 to 20 years by definition become a climate fund—not because they are suddenly investing in climate tech, but because the companies they’re backing, irrespective of the term “climate”, will have some form of a green DNA, because we owe it to future generations.

And so, if that admittedly idealistic future holds true, it would effectively mean everybody is investing along the same thesis. And therefore, in order to differentiate, we focus on certain sectors instead of a holistic strategy. For example one of our focus areas is Synthetic Biology, but we also focus on Food-Tech and Green Industrials.

Can you explain what makes Synthetic Biology so important?

Firstly, Synbio is a niche within the broader realm of Biotechnology. Here, microorganisms such as yeast, bacteria, and other microbes are used as a kind of “micro-factory” to produce certain things, proteins for example, the building blocks of life.

Secondly, the invention of CRISPR has kickstarted our ability to genetically modify and engineer even the tiniest microorganisms, “reprogram them” if you will. This turned biology into an engineering discipline. Now if you add machine learning and today's generative AI to the mix, and employ it on vast biological data sets, then suddenly experiments in the lab become reproducible, feedback loops shorten and overall cost decreases. That’s a pretty powerful cocktail of compounding technologies. The result is that we’re now in a position to apply these previously costly methods to commodity outputs such as food, materials, and green fuels.

Synbio allows you to redesign products from the molecule up that were previously fossil fuel-derived and rebuild those products biologically with equal or better performance, equal or cheaper prices, but significantly improved sustainability metrics. And that promise is very enticing because it means you can turn entire value chains and industries upside down.

And so six years ago, I went very deep into the rabbit hole of all things synthetic biology. I’m not a scientist, but I learned about the concepts, technologies, promises and challenges, the ecosystem, and the characteristics of entrepreneurs who start such a business.

I quickly realized that these founders have very different challenges in the early days compared to software entrepreneurs. And then, when I looked at the investing landscape, it became very clear that this particular type of founder is completely underserved from a capital formation point of view at the early stage.

And what about later stages, like Series B? Is the funding landscape better then?

I think, to some extent, at Series B, there are typically first signs of commercial traction, so it becomes a bit easier because investors don’t necessarily need to take on huge technology risks. But they’re now faced with figuring out market adoption, market risk, and execution risk. That’s something that any investor is trained in.

But up until you reach this point, where you can actually say the technology is scalable and it’s profitable from a unit economics standpoint, there are a lot of steps you have to take. If you’re just getting started, besides some public funding and some university grants, there are very few structured, institutionalized capital providers.

So that was the origin idea for Nucleus—to start by focusing on a very specific archetype of founder, typically with a scientific background. These founders usually realize that biopharma or big chemicals are not the career path they want to pursue, but entrepreneurship is the name of the game for them instead. And then they effectively start building a deep-tech company in the space, which, as I mentioned, has very different starting challenges compared to software companies.

You’ve also gone on quite a journey too. You started investing in 2020 and you’ve said that you bootstrapped your way to where you are right now. What have been the challenges in terms of raising funds to invest in this specific niche?

I think, as with so many things, from the outside and typically in the press, venture capital often gets romanticized quite a bit. We talk too little about the failures, although that’s changing, slowly but surely, in Germany from a mindset perspective.

If you look at my specific journey in Germany, it’s really 10 years in the making. My first internship was in Venture Capital, and since then I’ve always had this spark for working in a fast-paced technology-oriented environment with people who break rules, challenge the status quo, and want to have some form of impact. That spark has honestly never left me.

Throughout my entrepreneurial endeavors, I had a company, and I was also the head of sales at another venture-backed startup, I just learned to appreciate the process much more than the end goal.

Retrospectively, we did one thing well – “show that we can do the job.” First, we started angel investing alone, then scaled this into a syndicate that allowed us to invest bigger checks on a deal-by-deal basis. This taught me my first painful lesson about fundraising. So, imagine we invested €70,000 into a company pooled from €5,000 individual checks – messy, manual, and very time-consuming. In the beginning, I sometimes spent hours on the phone to convince someone to invest €5,000 with me in a single company. The hustle paid off. Some of our earliest believers became LPs in our first fund (HUGE THANK YOU!) and with the additional capital, we were able to build up a small track record that demonstrated that we can source deals and win allocation.

Now, the difference between starting a startup and a venture capital fund is that there are very few resources and best practices to lean on. When we started there was no “handbook on how to raise a fund”, there were only limited insights on Blogs from a few people who shared their learnings openly. So, our number one goal was to find people who’ve done it before and surround ourselves with a support system.

As a young manager in Germany, you are certainly faced with a very conservative world of family office LPs and institutional capital that is only slowly awakening to the opportunity of backing emerging managers. Many of them categorically don’t invest in funds 1 & 2 or treat you in the same way as they treat more established managers, especially from a GP commitment perspective. To align interests, GPs are meant to have skin in the game and invest a percentage of the fund, typically 2-3% of total commitments, from their own savings. For a €40,000,000 fund like ours, that’s €800,000. Now to treat a 30-something-year-old who has no Vitamin B or family money to lean on, the same way that an LP would treat an established GP with a track record and a real previous career – is simply crazy. Luckily, we were able to find some progressive LPs who were able to put things into context, but that took many discussions and convincing some lighthouse institutions like KfW and EIF.

So, it took us a long time to educate investors and find people who believed in us—people who understood you can’t treat someone who’s been a McKinsey partner for 20 years the same way you treat someone who’s just started their company and has already put all their savings into the journey. That was a key challenge.

How did you overcome those challenges and find believers?

It ended up being a numbers game. I think for the first fund we spoke to 262 potential LPs, so pure hustle. More of a shotgun approach – but we also didn’t know yet who our ideal LP was. We wasted a lot of time with window shoppers. But once we had a first closing in the books combined with some warehoused deals, it became easier for people to buy into our strategy and sector focus as talking about companies and showing that other credible people backed us made things seem less abstract.

In Germany, I think the family office landscape is very hard to break into. As technologists, we speak a different language. It’s not that they don’t want to understand us, but entrepreneurial family businesses are very oriented toward building a good business, being profitable, and managing risk in a way that makes sense for their context. So even if you find out who is actually investing in VC, it remains incredibly hard to reach them without a warm introduction. Once you have that introduction you sometimes meet them 6-7 times only to learn that they’re “not yet ready” for VC or had a shift in strategy.

Do you think the language barrier between these two worlds is a significant issue?

Well… On one side, you have these startup people promising big outcomes and game-changing technologies. On the other, you have family offices that are grounded in more traditional business values. There’s a mismatch in the language we’re speaking, and I think it’s our job as investors to bridge that gap.

It’s still a big challenge, but we’re learning. We’ve been fortunate to receive capital from family offices that also bring value to the table, like access to industry or customers. But this is just the beginning.

You’ve recently raised €40 million—a big milestone. What are some of the things you’re looking forward to working on with this new fund?

Raising this fund in the current market environment, as you know was very hard. And I don’t want to romanticize this in any way. It’s been a lot of blood, sweat, and tears, with many sleepless nights.

What sounds amazing now took several closings of the fund. A week earlier, you never really knew whether the closing would happen or not. You just slid through it somehow. It could have gone the other way entirely, and we would have had to deal with the consequences. It was a very entrepreneurial journey—from not being able to pay ourselves a salary so we could hire a team, to coming close to finding the institutional investor you wanted to partner with, only for them to change strategy after six months of discussions and say, “Sorry, not today.” These challenges are just part of the journey. At some point, you start appreciating that certain things are outside of your control.

In terms of the plans for this fund. Honestly, I’d say that the plans from fund one to fund two have not changed significantly. I think we’re here to support founders. For us, that’s absolutely core to our mission. And the beautiful thing is, we get to pick the people we want to do this with. If you have a small, highly effective team, you can move mountains.

This is what gets us up every morning. It fuels our energy. In essence, we just want to be good partners to founders, with a specific focus on scientific founders and deep tech. Europe has a unique position with amazing universities and incredible technology. Too much of it just gets stuck in some desk drawer because the translation of theory into practice is something we’re not very good at yet.

How do you see Nucleus helping to address that gap?

I think if we can help founders overcome initial starting challenges, help them with storytelling, and fuel their ambitions, then that deserves a place in the world and justifies the existence of a fund like Nucleus.

We’re particularly interested in intersections of disciplines—combining computer science with biology, applying cutting-edge research in commercial contexts, and ideally bringing it to market with a decarbonization angle. That’s been the goal since our angel investing days, through fund one, and now with fund two. I think we’re very good at sticking to what we set out to do. Being cohesive and consistent.

The idea here is to build a boutique venture firm with a very founder-first mindset, similar to what you’re doing, Robin—just focused on a different kind of founder. Ultimately, we want to keep doing this as a small team with high conviction, a lot of energy, and an idealistic dream about the future.

It’s beautiful to come together as a group of people, alongside the community of founders we support, to create this sense of belonging.

Tell me about you and your business partner, Isabella. How did you meet, and what do you both bring to Nucleus?

It’s a really fun story because Isabella and I have known each other since eighth grade in high school. We’ve been very good friends for a long time and have discussed major life decisions together as well as starting a business for many years.

We’ve always had a strong, trusting relationship, which, in this instance—starting a fund or a business—is a huge asset compared to other partnerships. There’s no politics; there’s blind trust, which is incredibly powerful when you need to make quick decisions in a fast-moving industry.

Obviously, we were both aware of the saying, “Don’t do business with friends.” And we really stress-tested our relationship for this exact reason.

How did you go about stress-testing it?

We played a few competitive matches—on the court, so to say—before starting a team. Through angel investing, and putting our own money at stake, we both learned about our strengths and weaknesses in a professional context.

We had a good idea of how we might complement each other as a team, but we had to prove it. We were very purposeful and careful in crafting this strategy. You don’t want to start a long-term commitment, managing someone else’s money for 20 to 30 years, without being 100% sure you work well as a team.

So, for a year, we invested together, learned together, and even lost money together. We went through many challenges, and eventually, we realized that Isabella is extremely detail-oriented and execution-driven. I’m a little more creative, extroverted, and a long-term thinker. So that matches well.

She’s an industrial engineer by training, which helps a lot because she naturally understands many of the hardware and technological solutions we evaluate. Plus, she spent quite a bit of time at McKinsey developing strategies for corporates to navigate their journey to net zero.

How does her background in corporate strategy influence your work?

She has spent time helping big corporations decarbonize, specifically in manufacturing and also in life sciences. There was a very natural complementary fit between my early-stage experience and her experience in corporate stakeholder management. The question is: how do you actually get these big corporations to take positive action and make meaningful changes within their organizations?

And this is where her frustration came from, right? She realized that a lot of these projects get stuck in middle management. It’s about stakeholder management, figuring out personal agendas, and navigating politics. That hampers innovation, it slows things down, and if you’re someone driven by impact and quick feedback loops, it just doesn’t resonate.

Eventually, she learned about the world of entrepreneurship—partly through me and partly through angel investing—and she developed a real passion for supporting founders on their missions. She understood that this is where you can drive much more change than in the corporate world.

Her corporate perspective is still incredibly important, especially for the types of companies we invest in, because you can’t be too altruistic about it. If you want to scale a large, global climate solution, you need to partner with the incumbents. Saying you’ll replace the incumbents is nice, but it’s not that simple. Replacing a company like BASF, for example, is not trivial.

Why is partnering with incumbents so critical?

BASF, for example, knows how to scale chemical solutions. They know how to run industrial-scale plants, build them, and finance them. That knowledge is invaluable for startup founders. Helping founders learn the language of corporates—and helping corporates understand startups—is a key skill that Isabella brings to the table. On top of that, she has a strong background in industrialization, manufacturing, and a passion for technology and climate.

As a third member of our team, we also have Carolina, who’s a bioprocess engineer. She comes from the scientific side.

I’m lucky to be complemented by two very strong women who are amazing role models for female leaders and who truly push boundaries. Carolina, in particular, brings a wealth of industry experience from DSM, especially in techno-economic analysis for bioproducts.

What role does Carolina play in assessing the value of synthetic biology companies?

She really understands what the business equation of a bioproduct is—what needs to go in as inputs, what comes out on the other side in terms of process, and how you scale this— so she can determine whether it’s a profitable product or not. That’s a critical skill set when evaluating early-stage synthetic biology companies because, in bio, you’re dealing with living organisms.

You’re essentially reprogramming life itself, so to speak, which means it’s not a straight line.

Unfortunately, biology is not as predictable as we’d like it to be. There’s a lot of trial and error, even though computational methods, machine learning, and AI are improving that process. But because of the inherent challenges, it’s not as easy to pivot a company in this space as it might be in software.

In SaaS, for example, you can build a new feature or pivot to a new market relatively quickly. But in bio, if your process or fundamental science is off, you can’t just pivot the company overnight. That’s why it’s so important to analytically assess whether the product makes sense from a commercial point of view, and that always includes understanding how it scales.

That’s exactly Carolina’s key skill set and background. She brings this expertise to Nucleus, and our founders are extremely grateful to have a sparring partner for these topics.

You're not an impact fund. You’re a fund that wants to make exits and generate returns with your companies. So how do you balance doing good with getting returns on investments?

This is a critical question that many climate funds have to answer. By definition, Venture Capital is one of the most capitalistic forms of finance you can do, so returns should always be the North Star.

That’s why, while we do care about climate impact, measure it, and have frameworks to assess it, we don’t factor it directly into our investment decisions. For example, some funds have certain impact thresholds—if an opportunity doesn’t create a specific amount of CO₂ savings, they won’t invest.

I think that framework has a major drawback because it creates a selection bias. If you’re focused on returns, you’ll inherently miss out on great opportunities that don’t also meet those impact thresholds. Some argue you can find both, and of course, that’s the goal for most climate and impact funds. But in reality, that subset of opportunities is quite small. For us, we invest heavily in enabling technologies where direct climate impact is harder to measure—it’s often a third-order degree impact.

Can you give an example of how this third-order impact works?

Sure. If you invest in a technology that makes biomanufacturing more cost-effective and scalable, that technology itself might not have a direct climate impact. But in the second degree, if it enables industries to produce greener food products or materials on an industrial scale, then the impact becomes significant. The challenge is: how do you measure it? We’ve had lengthy discussions with our LPs, including institutional ones like the EIF and KFW. These institutions understandably want to ensure our incentives align with picking companies that eventually create an impact.

In practice, though, it’s very difficult to define a framework or KPIs that accurately reflect this without creating unnecessary overhead.

It sounds like a journey.

Definitely. It’s a journey, and we’re all just getting started. It’s still a young ecosystem, and there’s a lot of learning to do. I hope that as the dialogue between LPs and GPs evolves, things will become more efficient and practical.

How do you find balance? How do you ground yourself?

I think it's critically important to detach your self-worth from your company. I think mentally, you're in a very bad place if you don't manage to do this. By nature, and by the nature of the business we're in, you're always facing a ton of challenges, and constructive feedback can quickly become very personal. Because, very similar to any kind of entrepreneur, you're building a business, you're giving it everything, and energy is not endless. So you need to be very careful about how you manage your energy levels.

And I think the one big realization for me, which came probably a year ago was that I realized there's more to me as a person than just Nucleus. That helped me maintain at least some form of cognitive balance, or balance of the soul if you will. But honestly, in life, I don't think I believe in balance. If you're doing something as challenging as building a company—and it's hard; I think building an operational company is an order of magnitude harder than building a fund.

And in those moments when it’s so difficult, how do you keep going?

As my wife continuously reminds me: This was a conscious decision—nobody stood next to me with a pistol to my head and said, "You have to start a VC fund." I think as an Entrepreneur of any sort, you have to be made for it, and you have to endure it without complaining about how hard it is.

This idea of work-life balance—at least in the first 10 years—doesn't exist. If you're really committed to building something new, it just doesn't work. You have to be all in.