🎧Tune in for insights from entrepreneur Patrick Löffler into his journey with Givve!
We delve into the journey of Patrick Löffler, co-founder of Givve, a company that experienced significant growth after being bankrupt nearly twice. Patrick shares his story on the evolution of Givve from its inception in 2010 as a B2C voucher seller to its transition into the B2B market, offering prepaid credit cards. With over 600,000 active users and steady growth, Givve’s story is one of resilience and adaptation in the tech industry. Patrick will share his take on;
- How core values are essential for a good co-founder culture
- What you learn from pitching to +300 investors
- The definition of a successful workforce
- Why it was important for Patrick to not exit to the highest bidder
As always – hosted by Peak’s very own co-founder and managing partner Johan van Mil and Anke Huiskes founder & managing partner of NP-Hard Ventures 🕺🏻🕺🏼
You can find the episode on your favorite podcast platform, linked below. And, if you are really interested in listening to the big exit of specific founders – reach out to us so we can invite them for the next episode!
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You can find the transcribed version of the episode below:
Johan van Mil:
Hello everybody, welcome to the next episode of the Big Exit Show. This time we have Patrick Löffler. He is the CEO and founder of Givve, which has been acquired by the Up Group, a cooperative from France. And what’s funny is that when Patrick was 17 years old he was a part of the national snowboarding team. And also during his university time, he owned a bar.
And also I think it was interesting to know that he loves to take photos. So he’s a pretty active person also. So welcome to the show, Patrick.
Johan van Mil:
What was the reason for you to pivot from B2C to B2B? What were the signals apart from the financial needs to turn it to a company that is paying its own bills without needing external funding? What kind of signals did you get from the market to make that decision?
Johan van Mil:
You mentioned that you pivoted your business away from B2C to B2B. We’ve learned, Anke and I, both as investors, that pivoting a company is really hard, right? I mean, you really have to shift your company. Can you elaborate a little bit on how you made the decision to shift away to the B2B side? What was the signal from the market? So not the external reasons like the funding etc. But what were the signals from the market that made you realize that you had to change your company to the B2B?
Deciding To Pivot From a B2C To a B2B Market Place
Patrick:
Yeah, it was twofold. The signals of the market were very clear at that time. We were in the B2C market and we were competing with gift cards from H&M or Apple or Amazon and their marketing budget is tremendously bigger than ours. So this was impossible to position ourselves there.
And for B2C you need a strong performance in marketing. And so, yeah, we found out that from the marketing side, our product would not be competitive enough. At the same time, we had a client, finally enough, who asked us, if he wanted to have not one card because we were in the B2C business, he wanted to have 40 cards for his employees.
And they should be reloadable if he can do that because he wants to load some money that afterwards is tax-free on those cards. And we were like, what, what are you doing? And actually, that’s how we found out that this is possible. And then we looked into this and we saw that the competition at that time was very old-school and paper-based.
So the idea of disrupting kind of an old-school market sounded very intriguing. And we thought, yeah, okay, then let’s pivot to B2B. And I have to laugh because this again was very naive. After all, pivoting a company that’s crazy. We lost all, nearly all employees because yeah.
It’s just very different and we had no idea how different it was going to be. So more or less we built the company from the ground up completely new, more or less.
Anke Huiskes:
And when you say you lost nearly half of all employees, did they quit because they wanted to be like a marketeer for consumers or did you have to say like oh we need a different type of skill set so we’re gonna let people go?
Patrick:
Both. And at that time we had only 10 people. So it’s not a huge thing and it was all in good ways. It’s just, that it was an evolution that we totally underestimated. So don’t underestimate the pivot. That’s what I think I want to say at that point.
Anke Huiskes:
Okay.
Anke Huiskes:
Mm-hmm.
Anke Huiskes:
And during that time when you went through that process, did you call your peers who then went through this like previously or did your investors help you or what were the key things that helped you although it was still super difficult to do it in a successful way.
Patrick:
Yeah, I mean you are investors, so I try to be polite. Yeah. I mean, I’m not a big fan.
Anke Huiskes:
Be honest. No, we can handle it. No, you should be honest. So bring it on.
Johan van Mil:
And we’re Dutch, right? So we can handle directness, Patrick.
Anke Huiskes:
We can. So we can learn.
What a Startup Needs From Investors
Patrick:
Okay. I mean, most of the investors weren’t helpful at all.
And how can I say this? Yeah, there were some investors that were really trying to help and it was very painful for them and for us. Because when you are in this situation, help from the outside sounds good, but it’s not always really helping.
In the end, we had a small group of investors and the other investors also voted for this group, like a small buyout in Germany, you would call it. And this in the end, was very painful, but I think in the end, this was helpful. We had a Friday call together.
And yeah, I think in the end this was helpful, I have to say.
Johan van Mil:
What was it Patrick, if I may ask and double-click on this, what would you like to have from investors? Because you mentioned they were really helpful and you pooled them, I think also to improve communication probably and to have the right people around the table and not every investor. But how could these investors in general help a founder in that position?
Patrick:
Yeah.
Patrick:
At that time, these investors have all been more or less corporate. They never founded a startup. And I think we had always a little missing link because they came from corporate companies that are super successful. And they tried to apply their management principles to us and so we, it was not the same flight height. Yeah, so what would I want? You need people that have really experienced the same super hard things and learned their lessons and then I think those people could be of much better help.
Anke Huiskes:
Yeah.
Patrick:
It pains me to say that they weren’t helpful because they took a lot of their time and invested that into us. So it would be wrong to say this was not a good exercise for everybody. And maybe it also showed us a little bit of their thinking. So, in the end, somebody who really lived through the same things could be a much better help.
Pre-Seed Funding
Anke Huiskes:
And this is maybe also a good takeaway for the founders listening to it. Like when you decide to erase external capital, to be pretty mindful of who you want to be on your journey. Because everybody knows it’s never gonna be this linear line. And I guess having a good mixture of people going through the pain or like going through health like I think how you message yourself. Might then have better understanding or better coming around when shit hits the fan, which always happens.
But on the other hand, sometimes you don’t have that luxury position to choose. And in your case, I think, when you’ve been through a few pivots, and you’ve been in a few cases where you had to do the bridge round, it also has two sides of the coin, right?
Patrick:
Yeah, I mean, beggars can’t be choosers. And if you’re in, as you said, if you’re in such a position, it’s more begging. Which is not a nice situation, but anyway.
Anke Huiskes:
Yeah.
The Growth Phase
Anke Huiskes:
Yeah, switching, I guess, to like the growth phase, like maybe related to what you mentioned earlier, when you have that dashboard, so people could see, your employees could see you’re getting to like break-even point and to your point, like that was really like the tipping point. I guess my question is twofold. One is like, how much information did you share with the rest of your team? It seems you have a pretty transparent communication line. On the other hand, how did you manage that growth? Because now you’re with 50 people. Yeah, curious to learn about that journey.
Patrick:
Anke, this is still a question I really work around every day now because it’s such a delicate balance. Because we have been super transparent with everything. And we got the feedback as a management team that this sometimes creates insecurity.
Patrick:
Things that don’t work so well. Some people feel better if they don’t know so much. You have to find a good balance between being super honest, being super transparent, but also protecting your people, and keeping some things from them. So this is really a skill you have to develop and to get some experience in.
Anke Huiskes:
Yeah.
Patrick:
I think now we are quite good at it. And to share the key KPIs, the key figures, I think that always makes total sense. And I always speak about the figures because, you know, you can be super-visionary. That’s nice. But in the end, what’s tangible, it’s just figures. You can say, Hey, this year we want to load 140 million on cards.
This sounds so tangible. And then you can check on a monthly basis: Hey, are we going in this direction or not, you know? So I prefer visions that are tangible and that’s for everybody to see. And it’s so much easier to identify with. So we still have a dashboard that’s available to every employee. And we also have a Slack channel and each morning those figures get popularized in this channel and that’s the way to go.
Anke Huiskes:
And then you have maybe like weekly all-hands where people can ask me anything or how do you work on that?
Patrick:
Yeah, we asked how often people want to have all-hands. And in the end, we settled on monthly. So people are not, at least in our company, they want to do their work and be left alone. That sounds not so nice, but you know what I mean. And so we have a monthly all-hands and that’s good.
Anke Huiskes:
Okay.
Anke Huiskes:
Yeah.
Johan van Mil:
And we read, perhaps also going to the exit topic, we read in an article that at a certain point you realized that the company would be too small in the long term, right? And that’s also the reason when you decided to look for acquisition partners, wonder about, let’s say, the exit process, but especially I was wondering also as a founder, what kept you back to strive for, let’s say, a bigger company on the long term. Because the market that you’re in is pretty big, right? Also, let’s say, look at the company who acquired Givve right now, also the size of them, that’s a lot of potential. What was the reason for you personally to decide to go to the textual process?
Patrick:
Again, several factors. One was that with our cap table, we were kind of in a lock because there were some investors that were willing to go with us through the growth phase and invest, and maybe leave breakeven for a while to grow again. And then the other half was so happy that we were break-even and weren’t willing to go into a risky phase again. So it was a question of the cap table. In the beginning, our idea was to find one new lead investor who would maybe cash out those who weren’t willing to go into a risk phase again. And we did an open bidding process.
And then the offers were so good that also the pro-risk investors took the chance to cash out. That was the process. And on a personal level, I mean, this was 2018 when we finally sold the company. And after eight years of really intense things and intense periods, it’s also a question of how long can you manage this intensity.
Anke Huiskes:
Can I ask a personal question about that? Because when you look into your profile, you are mountain climbing, you’re very outdoorsy. And then, but also listen to you, you’re like deep in, heads down, always building, grinding. Like how did you combine these two while building a company? Because for eight years, that’s a long time. So curious how you balance keeping your sanity as well.
Patrick:
Yeah.
Patrick:
It’s a very good question. Um, and that’s so important. And I, these eight years, I, I mean, I surfed here in the Munich Iceberg, it’s a river and you can surf there. Yeah. And more or less for eight years, evenwhen this location is so central and nearly all offices by luck have been not far away for nearly eight years, I didn’t surf.
Anke Huiskes:
Yeah, yeah, with the bridge, yeah, I’ve seen that one.
Johan van Mil:
Yeah.
Patrick:
So I started losing too much of my actual life. And this is a vicious circle or positive. If you can really manage work-life balance and other buzzwords, but nowadays we are really good, not only for me but for the whole company to have everybody live a really good life.
And this makes us so much more efficient and effective.
But at that time, I really, yeah, I was, I was losing this totally this work-life balance and it was just too much. And this is also a sign when you see that you really have to change things.
Anke Huiskes:
But do you think it’s like a utopia that you can still have that because it’s such a big part of who you are. Do you look at peers who’ve been through a same-like growth trajectory? Do you have to have that other part of your life integrated in being a CEO?
So you can run the marathon. Maybe at that point you might have thought like… I don’t like it’s an open question. I don’t know the answer but I’m curious what you think.
Patrick:
I can, for me, it was a kind of an investment, you know? Now I have a much better life because I built it, and if you ask Alex, he will tell you the same. We built this company because we couldn’t find this way of work in other companies. Everybody can work from wherever he or she wants. And so we were remote first. Actually, we always have been remote from the beginning. But now we have built such a strong foundation with the tools and with our discipline and with the recruiting process. Nowadays we are much better able to find these people who wanna work the same way as we do.
I often work only three, four, five hours a day. And that’s because nowadays I’m so super efficient and the team around me is doing the same thing. And having built this, this summer I served a lot at the Eisbach, to be honest. Ha ha ha. Because I can.
Anke Huiskes:
Good for you, good for you, yeah.
Patrick:
I can not be on the same professional level I have been before. I’m more efficient today, but this was an investment. With our current tools and the culture, it’s easier to build such a company today than it was in 2010.
Anke Huiskes:
Yeah.
Patrick:
But I guess it always has a phase where you really have to give it all.
Anke Huiskes:
Call all in. Yeah. Do you think that it’s now maybe a little bit more balanced or a little bit more accepted? It’s also like leading by example. I’m curious if you see a difference throughout the years.
Patrick:
Absolutely. Yeah, absolutely. I also listen to podcasts and I see more and more of the newer companies that are really thinking in this direction and that are really good at managing their people this way.
Johan van Mil:
Yeah, I partly agree, Patrick, because I see a lot of companies doing that, fully agree. And I think we all realize how important the life-work balance is, right? But I think if you look, let’s say, at truly successful companies, I think the companies that we all know, right? There was a big discussion, for example, in the Netherlands about Dunk, probably Anke also read it right. Ali, the CEO there, built three unicorns with his own hands.
Now working on the third he is very rigid about managing his team and fully demanding everything, etc. And I think Tesla, Elon Musk is also known for that. So I think we also see other examples. But indeed it’s shifting. And I think in general, right, I think it’s good to have a better work-life balance, especially in the long run, because eventually, it will be really hard to especially to do it for eight or 10 years, right?
Patrick:
Ahem.
Johan van Mil:
So I think it’s shifting, but I haven’t seen the real success cases yet from that end, right? That’s a little bit what I haven’t seen, yeah.
Patrick:
And Johan, here we are exactly at this question. What is success? You know, like Elon Musk, he’s burning through all his people like crazy. So this for me is not successful. Successful is for me a sustainable, healthy work environment and being successful.
Johan van Mil:
Indeed.
Patrick:
And allowing everybody to thrive and do their work and their personal development on a very high level. That’s success for me. In the end, it’s not if we load 160 million euros, or 140. Success for me needs a different definition today.
Anke Huiskes:
Hehehe
Johan van Mil:
Yeah, I think it’s also related to the group who bought your company. Can we go to that, also to that process? Because as you mentioned already, you realize that the company would be too small in the long run. So you decided to start for an acquisition and also, as you just mentioned, right, because of the cap table. How did you start with that process? Did you approach buyers yourself, did you get help? We are shareholders and investors, we are involved in many special effects processes.
Patrick:
We were lucky because we had the experience of another funding round before where we already worked with a finance boutique, a small one, and this didn’t go super well. But at that time we were in a super-growth phase, so we already were working a lot at high intensity and we knew that we needed outside help.
And then our CFO at that time, we had a very good one coming from one of the investors. That was actually a really good help. And with this CFO, we did a super intense search and we invested a lot of time in pitching, letting finance consultants pitch for us.
And we took a long time and we found a really good one that was fitting for us and with whom we wanted to work. So the key learning here is probably you need external help because during this process you need to grow the company. Because you can’t go flat during this acquisition process. You need to grow and this takes a lot of focus. But on the other hand, selling a company is another full-time job. So outside help is good, but invest please in finding the right one. It needs to fit your standards, whatever they are. So this was a good investment this time. I said it now three times over and over.
Johan van Mil:
And what was exactly the role that they took and what you took and what your shareholders and investors took, right? And especially in that exit process, because you mentioned already it was key to keep on growing the business.
Patrick:
Yeah.
They were extremely helpful in creating a good pitch. You know, I mean, I can pitch our company, but somebody who has pitched so many other companies, knows much better what triggers a potential buyer. So with their help, we got to know Givve through their eyes.
And this was actually also helpful for growing our business. So this was a really good process and we needed them also to manage our investors, our cap table because in the end it was an open bidding process and we surprisingly had five interested buyers and Up Group was not the one with the highest price tag.
We wanted to go with Up Group even if they weren’t the ones who wanted to pay the most. So you can imagine this was not something the investors were happy about.
Johan van Mil:
Yeah, because that’s very interesting, right? And that’s also good that you share that. We read somewhere that you indeed decided to go together with your management team for not the highest bidder. What was the reason for you, not to go for the highest bidder?
Cooperative SaaS Owned By Staff
Patrick:
As I said, Alex and I invested so much energy in building a company where we loved to work and we wanted to stay on. Because, you know, money is nice to have, I mean, money makes you happy because it buys you stuff. But for us, it was always this workplace we have built.
That’s so valuable. It’s still so valuable to us. And with Up Group who is employee-owned, it’s a cooperative. They are different, but this core value is the same for them, it’s humans first. And this was from the beginning a very fitting buyer.
Anke Huiskes:
Which probably is also the reason why you’re still there. Like often people leave once they can.
Patrick:
Exactly.
Patrick:
We are still all here.
Johan van Mil:
You mentioned it’s a cooperative owned by the staff. Can you elaborate a little bit more because that’s an organization model that you don’t see a lot? You see it a lot in farming and in other industries but not in tech companies where we normally work with. Can you elaborate on how that works for a company?
Patrick:
Yeah.
Patrick:
Yeah, it’s a French cooperative. Maybe that’s important to mention and it’s owned by the French, by all the employees that work in France and they are also in a big transition, because it was a French company and now they have 20 other countries where they are active. And now they need to rethink, 3,000 people work at Up Group but only 600 in France. So the biggest part is now outside of France and outside of the cooperative. So there’s also a big change going on there, but it’s owned by the people who work there and they have an election every four years for their council members.
Now it’s 14 council members and then these council members vote for the president. So, it’s very different and it’s tougher to make hard decisions because it’s everybody’s on eye level. But this is so good for communication and for everyday work.
Patrick:
It’s the same. Like if you’re the president or somebody else, you speak on the same level because you are all part of the cooperative. That’s actually like how we manage Givve. I mean, everybody can tell his opinion to everybody else because that’s how it should be. That’s the same.
Anke Huiskes:
It’s pretty remarkable that you found an acquisition partner that has a very similar culture. And I think in one of your previous podcasts you said something about kindness. Like looking at people positively, always. Like that’s one of the first principles of how you work. I guess maybe to start wrapping things up. It has been an incredible journey, I guess 12-13 years in the work.
Patrick:
Yeah.
Anke Huiskes:
Sometimes it was a bumpy road with founder split-ups, refinancing or doing bridge-fronts, getting new investors on the table, being in a position where you’ve got multiple offers from people wanting to buy your company, and then being in a position to choose which party to go with in the long run as well because you didn’t want to leave. So I guess like for our listeners, it’s an incredibly honest, really insightful story. About how to grow and exit a company. Are there any questions that Johan and I didn’t ask that you really wanna hone in on as well?
Patrick:
I have because I know that it’s about exits and I want to shine a little light on their process, especially because it took us one year and it was remarkable. Because Up Group had one of the top five lawyers worldwide. And we had a normal lawyer, he’s also very good, but this was just a very different level. So what happened was that the lawyer’s partner invested two or three months to bring us to their level of communication. So this was an excellent experience. What I want to say is an exit is very different than a financing round, it’s extremely different because I thought that this is like another financing round, but it’s not. So it’s very different on so many levels, but an exit is also the best learning curve you can have. I’ve gained so much experience because we often had calls at 10 or 11 pm because that’s when everybody could find time and I have a very good saying I wrote a little differently because that’s how I felt. I’m tired, it’s too late, it’s too intense, it’s uncomfortable, it’s so complex. Let’s go!
And that’s how in the end you show up at 11 pm.
Anke Huiskes:
Wow, and that’s for a year, right? That’s what you mentioned, like a year, an acquisition process of a year, which is not what I expected.
Patrick:
Yep.
Patrick:
Yeah, thanks to our wives and families. Nobody got divorced, which is kind of a miracle. So it’s a lot if you’re listening in. Thanks.
Anke Huiskes:
Yeah, yeah.
Johan van Mil:
Could also blow up the deal, right? One question about the exit also, we read somewhere that I think the exit price was roughly 20 million euros, right? How did you decide on that price? Because you had a lot of shareholders on your cap table.
How Do You Establish The Right Exit Price?
It’s always everybody’s perspective about the value of the company. I mean, you’re running it, but early shareholders and especially later shareholders might have a different perspective. How did you decide upon the price? Because you could also, in your case, say no and continue to grow the company. Right. So how did you decide on that point?
Patrick:
Yeah, that’s the reason why we decided at the beginning to have an open bidding process, which was a risk because it could have also been that bids would be very low or no bids would come in. So it was indicated by the market, all the bids more or less were then in the same region. That was also good for the investors because they thought, hey, more or less, all the prices are two or three or four millions plus minus, then this cannot be so wrong. Yeah. That was a very lucky situation.
Johan van Mil:
That’s the benefit of also having multiple bidders.
Patrick:
Otherwise, it’s so super hard, you know, for a tech startup to really find a good value. Because what do you base it on? So yeah, having an indicative process is really a good, elegant way of solving this. I think.
Anke Huiskes:
Mm-hmm.
Johan van Mil:
And a last question on my end, because also as a founder myself, having a few companies before, I like to give myself something, right? Especially after building a company and selling it, right? I think it’s always good to give yourself a gift. You have a very impressive career, right? From being a snowboard teacher, having a bar, etc. What did you give yourself as a founder after the process, right? What was the gift that you bought for yourself or for your family or somebody else?
Patrick:
Yeah, it’s okay. I bought a Tesla. This is the one thing I always wanted to have in 2018.
Johan van Mil:
Oh, it’s a German and Tesla. That’s interesting. That’s for another podcast.
Anke Huiskes:
hahahaha
Patrick:
But in the end, and this sounds now super pathetic, but I mean it. In the end, the biggest thing for us is that we could develop and we still develop this workplace that we have now, that I’m able to go, I mean, in these eight years, the maximum length of my holiday was one week. And often it was only one week per year.
So being able now to travel again with my family for three weeks and knowing that this is not at the cost of the company, that it’s not growing at this time, but on the contrary, that everybody can take holidays and come back recharged. And in the meantime, also great things happened. I mean, that’s the best. That’s the best. I will give back my Tesla and everything else for having just this. Seriously, this is so good.
Anke Huiskes:
Yeah, you’re really are a very positive person. I think the things that you’ve mentioned before, how you want to build your company is how you are as a person, which is so interesting I guess, in the company culture that you set for yourself. So thank you. I guess this is it. Incredible to learn about the journey. Thank you for being so open.
Patrick:
Thanks.
Anke Huiskes:
No matter where founders are in their journey and even some advice for us as investors, that’s always good to hear. So thank you for your honesty.
Patrick:
Hahaha!
Patrick:
Thank you, that was a good…
Johan van Mil:
Yeah thanks Patrick really
Patrick:
Well prepared, that’s big fun actually.
Anke Huiskes:
Good. See you next time on the wave in a month.
Patrick:
Oh yeah, that sounds really good.
Anke Huiskes:
Yeah, okay. Ciao!
Patrick:
Bye.