07 October 2020

While some start-ups get off to a flying start, others find it slightly more difficult to take off. There may be various reasons for this, such as an unclear proposal, lack of cash flow, market not mature enough... The latter was the situation in which Olivier Verdin (AppTweak) and Cindy Naegel, Business Angel within the BeAngels network, found themselves. After a modest start, AppTweak really took off after its third year. Today, the start-up employs 35 people, it generated turnover of EUR 2.5 million in 2019, which is expected to reach 4 million in 2020.

For Cindy Naegel, an investor and a Be Angels member since 2013 and, Olivier Verdin, an experienced serial entrepreneur (OpenHR, Wooclap, 87 Seconds…) and a Business Angel himself, the notions of trust and transparency are crucial to the start-up-business angel relationship. They met each other 7 years ago during a pitch at BeAngels, and have been (almost) inseparable ever since. Let us focus on their collaboration which they both describe as incredibly rewarding, despite the difficult beginnings...

First of all, what is AppTweak?

Olivier Verdin (AppTweak) - Today there are over 4 million apps on platforms such as Apple App Store or Google Play Store. 65% of apps are installed as a result of a search. AppTweak is a software tool that allows mobile application designers to increase their visibility on these platforms. It is referred to as “ASO”, which stands for App Store Optimisation.

Cindy, what did you like at AppTweak?

Cindy Naegel – First of all, the team. It was the team’s right mix of complementary skills and experiences that won me over. The fact that Olivier already had an impressive track record in other start-ups was a key factor in my choice. Then there was also the innovative aspect of the technology. Back then, in 2013, we increasingly became aware that one in two apps would be run from a tablet or smartphone. This represented an enormous potential.

Olivier, what did you like about Cindy?

Olivier Verdin (AppTweak) - Already from our first meeting, with Cindy and Xavier Huerre (cf. Wooclap Interview), I was charmed by their listening skills and goodwill. I soon realised they were both ready to take on the role I expect from a Business Angel: that of supporter and challenger. Finally, they deserve huge credit for their visionary side and their confidence in a completely new area.

Cindy Naegel – I would like to add that I also found a listening ear to the questions I had, more specifically about the business model and the conversion rate. At that time, there was still a strong belief in the move from freemium to pay-once. This type of business model was then still in its infancy. Their openness to these questions assured me that once the investment was made, we could continue along this line of communication.

So, AppTweak got off to a rather slow start?

Olivier Verdin (AppTweak) – Indeed… In 2014, at the time of the first fundraiser, we raised
EUR 130,000 from two business angels and EUR 130,000 as credit from Brustart, which is a rather modest amount. We hoped this would keep us going for one year. It took us a little longer than expected because the market was a bit slow, we had to find our price model, learn the ASO software tools, and adapt our product. In August 2015, we raised an additional EUR 500,000. And slowly, as we began to grow, we started convincing increasingly larger customers, our recurring revenue went up... What I found particularly positive in this whole process was that the business angels played their part and reinvested in the different capital rounds. We greatly appreciated that they were convinced that AppTweak offered real potential in the medium term.

Cindy, why, in spite of the slow start, did you reaffirm your trust in AppTweak when a new fundraiser was held in 2015?

Cindy Naegel - Ever since the start, we knew that Olivier was capable of taking AppTweak somewhere. Despite this harder-than-expected start, despite some difficult discussions, Oliver has always maintained our trust with his will to get AppTweak off the ground and his honest, regular and transparent communication. We also kept tabs on what was happening on the ASO market in the United States and realised that one day AppTweak was going to live up to expectations.

Olivier, why is transparency towards business angels so important?

Olivier Verdin – It’s my personal way of doing business. In this type of project, with investors and entrepreneurs, we are all in the same boat. Being transparent allows you to benefit from everyone’s experience and advice.

What advice would you give to start-ups that are off to a rather slow start?

Olivier Verdin - Opt for fundraisers of EUR 300,000 to EUR 400,000 rather than EUR 150,000. Of course, this has prompted us to be highly efficient, to quickly find customers, and to quickly move to the pay model. Having said that, I look back on it as a very positive and also very normal period in a start-up’s growth phase. Of course, it took longer than expected, and of course, we had to find solutions to attract funds, but in the end, the project was a success. We were able to launch a software tool with one million euros of funds. Compared with our rivals, this is a very modest budget.

When did this tipping point to becoming profitable occur?

We first became profitable in 2017, but the tipping point occurred in mid-2016. The second fundraiser of 2015 enabled us to invest: hiring staff, and participating in marketing events. We were soon able to convince some very large customers to join the platform. This heralded the start of a period of steady growth to reach profitability in 2017.

Today, AppTweak employs 35 people. In 2019, we generated turnover of EUR 2.5 million which is expected to reach EUR 4 million in 2020. We have an office in San Francisco and one in Brussels. In 2020, we are opening an office in Tokyo and one in Bangalore.

What is the role of a Business Angel in the growth phase?

Cindy Naegel – My role has changed since the start of the adventure when we met every month. Today, with AppTweak living its life, Olivier regularly provides us with feedback and KPIs on the company’s performance and we have a Board of Directors meeting every three months. Between meetings, Olivier knows he can count on us to assist with guidance, advice or important decisions to be made.

Olivier Verdin – Even today, as a CEO of a fast-growing start-up, I need a place where I can share my questions and problems. Having built this relationship based on trust over a period of 6 years, I know I can contact Cindy and Xavier with any question or problem.

Cindy, what is the advice you give most often?

Cindy Naegel – I don’t give much advice. My role is primarily that of a sounding board. I help people to try out new development ideas. I participate in brainstorming sessions, but the CEO always has the leading role. What I really like about this relationship is that Olivier knows he can call on us at any time and the same is true the other way round.

How would you rate the following terms in order of importance as to what a business angel can bring to the table: “Experience”, “Capital” and “Network”

Olivier Verdin: Capital and network are certainly the most important at the start of the relationship. And, quite obviously, capital at the very start. Today, it is without any doubt experience. It’s absolutely crucial to have people like Cindy in our team. I could, for example, turn to her for advice on the recruitment of non-European profiles.

My main advice to entrepreneurs is to carefully choose your business angels. Make sure that there is a genuine match. Your business angels are people with whom you will embark on an adventure that will last several years. In the case of AppTweak, 7 years. You should also link up with individuals coming from different worlds, who provide different skills and different experiences.

What is the role of a BA when the chips are down?

Cindy Naegel: I think that a clarification role is important. More specifically, assess whether the entrepreneurs at all times have the will and courage to address the real problems. Being able to stand back allows us to confront the difficult questions: are you willing to halve your salary while waiting for better days? Perhaps we should stop making costs in this market? The figures are bad, what is your solution? And repeat the question if no action is taken. This could even go as far as asking whether the CEO is actually the right person to lead us through the crisis.

Why did you join BeAngels?

Cindy Naegel: The reason that drew me to BeAngels and to become a business angel is the result of some thoughts I had in the wake of the 2008-2009 financial crisis. Like many others who had invested their savings in real estate and stocks, I asked myself if it wouldn’t make more sense to invest in the local economy and modestly contribute to creating a positive impact (job creation...) closer to home. The idea is to diversify my investments and to be no longer be subjected to crisis after crisis, but to take some modest action and create impact.

Olivier Verdin: BeAngels allows me to quickly reach out to a large number of people outside of my own network. BeAngels provides training sessions and good practice exchanges, which allows me to meet with people who benefit from this network. This is extremely important for an entrepreneur. Moreover, BeAngels develops new products to accompany the projects that emerge (ScaleFund I, ScaleFund II ). That is why it’s much more effective for me to join this type of network than to contact a multitude of people.

In what has BeAngels surprised you?

Olivier Verdin: I was quite impressed with the network’s development and size. They offer new products and new skills, which I find very interesting.

Cindy Naegel: In fact, the network changes in line with society. Today, the term “Business Angel” is much more known than ten years ago. I think this is partly due to initiatives such as BeAngels. At network level, I appreciate a lot of things that BeAngelsgives us, such as access to training programs where experts keep us up to date of innovations or new developments such as the recently revised Companies Code. This is important for both new and old members of the network.

- To find out more about AppTweak