Patric Hellermann

Investments

'Distribution is a fusion reactor inside every category-creator.'

Patric Hellermann

My Backstory

Where were you born?

I grew up in Essen, the industrial heart of Germany, where people are known for being hard workers, straight shooters, down to earth, and easy to grab a beer with. My parents taught me the value of dreaming big and working hard. My mother founded a successful biomedical startup in the 1990s, growing it for 15 years before selling to a large firm. She taught me about perseverance, breaking through barriers, and doing simple things better than overconfident incumbents. My father started as a car mechanic before founding his own dealership in the 1970s. He saw success come and go with industry changes, but his amazing relationship skills allowed him to relate to anyone.

Starting at age 8, my parents had me help out on a small farm, which helped me appreciate physical labor. In my teens, I worked admin roles at my mom's startup, learning efficiency and attention to detail. At 16, I took a monotonous job besides high school at a bank’s account statement printing department that taught me patience - which is valuable as an early-stage investor. I studied energy management and finance, doing my undergrad in Germany before a Master's at Purdue and Tsinghua.

After university, I started in corporate finance and M&A, focusing on renewable energy deals. I then joined a large utility amid industry transformation during and after Fukushima. My role changed to business development in batteries, grid storage, and distributed energy. I also supported early tech investments at the intersection of energy and power retail tech. Later, I helped a global engineering firm leverage its vast hardware expertise to partner with early-stage hard tech founders - right before embarking on my own journey as a founder (unsuccessfully).

Where were you born, where were you raised?

I was born and raised in Essen, in the industrial heart of Germany. Energy, mining, steel, and nowadays biotech are the DNA of that region.

What is the area you are from famous for?

Hard workers, straight shooters, down to earth, easy to make friends and be casual with, and easy to find a stranger on the street to have a beer with and laugh. People from that area are very hard to annoy. But one way to annoy them is with BS and pretentiousness.

What did/do your parents do?

My mother is a medical doctor who founded her own biomedical startup in the early 1990s, grew it, and sold it to a large med-tech firm after 18 years. She taught me a lot about big dreams, hard work, perseverance, breaking through walls against the establishment (in her case, an incumbent competitor with 50%+ market share in an all-male dominated paternal industry, and with unfair lobbying access), and that a competitive advantage can also be in execution - doing simple things much better than an over-confident incumbent.

My father was from a small remote town in Germany, the son of a self-employed plumber, who stole his Dad’s hard-earned Mercedes-Benz in the early 1960s when he was 14 years old with no driving licence and took it for a spin. And the local policeman picked him up and returned him home - quite embarrassing for my grand-dad back then, though years later he told the story with great pride for my father. My dad was an absolute car maniac turned car mechanic. After his mechanic-apprenticeship he first bought out the owner of a local gas station, ran the station, sold it, and then founded his own car dealership business in the early 1970s - when gas prices peaked. Well, he persevered and owned that business for more than 30 years until he retired. My dad saw business success come very easily in the 80s and 90s, and then go away with the advent of car ecommerce in the 2000s. He was an amazing relationship person, and was able to make every person, regardless of their background, feel like he can relate. He would talk to everyone in their mentality and language and meet them where they’re at, but always honest. He taught me a lot about relationships.

Any siblings when you grew up?

I have a big sister.

What are the two things (outside of school) that you spent the most time on when you were a kid or teenager?

Video gaming, then light programming. I started dialing in to the internet with an 28.8 Kbps modem and play-by-email with friends.  In my teens I programmed some crazy insane financial models that actually got me into my first job in M&A years later, where they made me build on an early model that I had programmed and turn it into a solar-industry market consolidation prediction engine, which was crazy complex but for our clients we really used it for a while. I just enjoyed that process of making something useful bigger and bigger over time.

What are you missing from your younger years?

Nothing much really. I feel like my life’s never been better. I’m a pragmatic optimist with a tendency to live more in my future than my past. Makes me a natural at never harping on things and being aspirational, and makes me need to work really hard on enjoying a moment.

Did you have a side job during school?

Multiple actually.

Starting when I was 7 or 8, my parents made me work on a small farm outside my hometown. Every week. This taught me just how hard physical labor and earning your dime really is. Something to respect.

Then, in my later early teens, my Mom offered me a job in her biomedical startup to general admin work, like answering the phone, documenting and filing things, circulating documents. I feel like it taught me precision, and a talent to be quite efficient taking care of nitty gritty details.

When I was 16, I got a job in the account-statement-printing-department of a bank - yes, that department exists ! I was standing next to a dozen account-statement printers and my job was to make sure they were constantly running, 8 hours a day, and debugging them when there was a break either in the machine or its rudimentary software. It was mindnumbing as hell, and it taught me patience. A very useful skill as an early-stage investor.

What did you study, and where?

I studied energy management first, then finance. I did my undergrad in Germany, then went on for my Master’s at Purdue with an exchange to Tsinghua.

Summarize your work after university and before Foundamental.

I started my career in corporate finance and M&A at a leading European mid-cap firm in Munich - goetzpartners - where I focused on the renewables energy space at a time when Europe still had a solar manufacturing industry. I worked on M&A projects for Chinese and German manufacturers at the time of consolidation and rapid growth.

A few years later, I joined one of the world’s largest utilities - E.ON - which at the time was a vertically integrated energy company. Then Fukushima happened, and E.ON had to transform its power generation portfolio in a matter of weeks, and focus on new business areas, which is how my job changed to bizdev with a focus on batteries, grid-scale power storage, and commercial and residential renewables and CHPs. I was partially involved with the first few tech investments that E.ON did at the intersection of storage, renewables and power retail tech.

Another few years later I was asked to join a leading global engineering firm - thyssenkrupp - in the industrial construction, automotive, aerospace, defence and urban mobility sectors to help them fix innovation and find ways to leverage their vast engineering and hardware know how to partner with terrific hard-tech founders at the earliest stage.

I tried myself as a solo founder in one of my passion markets. While the orders came in, I picked a business with very high fidelity requirements and did not find a distribution advantage.

What is your story of getting into Foundamental?

I met my Partners Adam and Shub many years ago while still in engineering, and we were fortunate enough to have someone from the AEC space tell us about the opportunity in the first place. In hindsight, we were all at similar points in our lives where we had the aspiration to do our next thing, hopefully big. Triggered by that, we did our diligence into AEC, created a thesis, convinced our first backers, and the rest is history as they say. This took us at least a year.

I often get asked why I ended up investing in our sectors. I really loved the timing of it all. When I decided for founding Foundamental, the cumulative VC funding into AEC technology was at $4.5B all time. We saw a pattern that tech sectors inflect after $10B. Our macro thesis played out so far.

I Am On The Lookout For

What makes a great VC investor?

Legendary companies by definition do not repeat. And yet, the human brain is conditioned to constantly see patterns to effectively come to decisions that allow us to survive among the atomic chaos around us.

A great early-stage investor is able to disconnect this pattern-repeating part of their brain in their quest for legendary, category-creating firms. Instead, they obsess with unearthing and understanding the details, the nuances and the quirks of hidden singularities that rule our world, and see opportunity within them earlier than others.

What are 3 things you look for in a founder?

First and foremost, I look for someone enthralled and obsessed with a singularity in their market, that others overlook. And the ability to convey that (vertical) singularity to me.

Then, the ability to discover exceptionally quickly. Discovery drives optionality, and optionality creates everything from constant TAM and CLTV expansion to liquidity. I have found that discovery is the true singular superpower behind building a generational company.

Next, a demonstrated ability to deliver outcomes under resource constraints; many people can buy growth with capital, but can you maximize value against the set of resources you manage. Or like my friend Adam says it best: 'Constraint breeds art.'

And a loyal partnership mindset, as no one in this world is the result of their own doing alone, and legendary companies get built through several times of adversity. In these times of adversity, a group of partners takes care of each other. Loyalty is a real difference maker.

What are the things in a business that excite you?

I found that every company that grew fast to exceptional status operates in the right market at the right time, and its leaders have an insane attention to detail. Where you play matters 1000x more than what you play.

It's why I am fascinated by founders starting in hidden, narrow and - importantly ! - buy-ready markets that are huge. When a company starts there, I clear my calendar and dig in.

I also found that distribution is a fusion reactor inside every category-creator. So, over time, I carefully observe how the distribution layers of the business get molded into a proprietary combination.

What are mistakes that AWESOME founders don’t make, but many other founders make and you see repeatedly?

Over-complicating products that leads to long dev cycles with low frequency; not having super specific R&D plans to validate against the core problems.

Making compromises on hiring; go slow to go fast. Not upgrading their team fast enough. I have said it many times: Hiring does not set culture. Firing does. You get what you demand, you encourage what you tolerate.

Losing sight of an achievable net profitability. Such companies build a narrative and eventually, just a mirage.

Focusing on 'brand' and 'social signaling' from VC’s, rather than the quality of the specific person they will work with; not doing a lot of reference checks on the Partner of the VC firm.

Raising too much too early; old-school venture works almost always better for founders.

What are values that are ultra important to you in other people in business life?

Decisiveness.

Commitment to learning.

Putting a premium on the skill of prioritization.

Loyalty (such an under-rated value !).

No compromises on ethics and morale.

HUMOR (bonus points when it is self-deprecating).

Describe what 'partnership' means to you.

The image I am using to describe partnership is a wheelspoke. Partnership is where every partner is a spoke that to the outside world forms a rim, and if you attack the rim from the outside, you won’t be able to break it, because the spokes reinforce each other to the maximum structural strength.

What are you chasing in your life?

I found the love of my life, my wife, early (when I was 19). What I am chasing from here is helping others grow, and being a part of those really hard to build companies that become legendary. My wife seems to think I am unaware of a big positive impact I am having others around me. Nice thought. If people say that about me in 50 years from now, I’d love that thought.

What intrigues you? As in, you see or hear something like this, you stop whatever you currently do.

Opportunity. People have told me I am really good at seizing opportunity and knowing when.

Think of VC as an artisan craft, where every craftsmen has their unique method and finesse. How would you describe your unique 'craft' to VC?

Truth + Transparency = Trust. That's the core of how I approach my craft. Seeking truths, speaking truths, and striving to be consistently transparent in my thinking and actions. It's surprisingly differentiating when you speak the truth clearly and respectfully.

It allows me to forge deep partnerships with mature-minded founders. I have found this to be so much more fulfilling, and also a critical value driver.

Any favorite readings?

I don’t read any non-fiction books anymore. I have found them to be a colossal waste of my time, where 99% of what’s said can be said in 1% of the words. I also do not read Twitter/X, or other 'echo chambers', especially not in the 'VC and tech bro bubble'.

I favor excellent research from scientists, experts, practitioners and founders who have done a ton of fact-based homework and who have earned learnings. And then I make up my own conclusions.

What is your favorite quote or mantra that can be applied in a business context?

There is no success without succession.

Cool. Now give a second quote or mantra you like in a business context.

I don’t think of work as work and play as play. It’s all living.

What is your secret ninja-skill?

I have become secretly exceptional at reading people’s intentions by their subtle actions, and ignoring words. And that skill can be put to extremely effective use in fundraising, hiring and exits.

In what ways do you feel inferior to some people you look up to?

Insane commitment to excellence captivates me. It's so hard to find in people. When I do, I feel a pure, genuine, undiluted sense of admiration for them. And a burning desire to hone my own craft further. Seeing super-natural excellence is grounding and aspirational.

If you were a super-hero, what would be your super-hero name?

Pragmato

What is one person in the world you would like to have dinner with?

My wife. She is all I need. I prefer to live away from the hustle and bustle. You can find me most of the time in Ostwestfalen, surrounded by lakes and countryside.

What can you nerd out over for hours with the right discussion partner?

Football. The American kind, not the goofy European kind.

When someone who knows you in your business life very well were to describe you, what adjectives would they use for you?

Decisive, relational, executional, pragmatic, thoughtful, listening, caring, loyal, reliable, ethical, merchant, opinionated, progressive, sometimes intense, funny, and entirely un-vain.

Is there something you would never mind spending a lot of money on?

Memory moments with my wife, ICE 911s, and mechanical watches. The logic behind: I don’t mind spending cash on moments of pleasure that gain in value for me the longer I hold it. The older we get, the more we value the ability to make lemon juice of shared moments.

Selected Partnerships

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