Here is what that taught me (and what I wish I had known earlier):
Not every company that looks right on paper will grow the way you expect.
One instructive investment was in a EUR 20m revenue enterprise software company. Strong
recurring revenues, enterprise customers, blue-chip shareholders, and a solid product. Every
box was ticked.
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Within 12 months, growth did not materialise…
Revenues that were supposed to increase stayed flat and the burn-rate was still there.

What saved us was the structure. Because payments were tied to revenues, not a fixed
amortisation schedule, we continued receiving monthly distributions, protected our exposure,
and the company did not default as royalties do not require bulky amortisation payments that
cannot be fulfilled. Without default, we exited cleanly at 18% gross IRR and 1.2x.
Under a traditional debt structure, that story ends differently.

Lesson 1: Structure is your first line of defence.
The second came from the opposite situation.
We backed an enterprise automation company when revenues were below €1m. The product-
market fit was undeniable.
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We stayed close, kept deploying as they grew rapidly, and by 2025 revenues had surpassed
€20m. It was a win-win. The company could grow without dilution and without the strain of
bulky amortisations, and our royalty income kept on increasing.
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Whenever management needed more capital, they came to us instead of going to the market.
Lesson two: Aligned capital builds relationships for future rounds.
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Both cases confirmed the same underlying truth. Royalty-based capital scales with growth
and protects against the downside. I believed that before these investments, but what they
taught me is that conviction alone is not enough.
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You need a structure that enforces it.
That is the constant across 40 investments.

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