Marc Penkala | Why Being Wrong is the Secret to Venture Success (SPARK20 – 139)

How do you succeed in a business where being wrong is the norm?

Marc Penkala has lived both sides of the table: as an entrepreneur who built, sold, and failed with companies—and now as a venture capitalist running his own fund. What makes his story different is the radical honesty about what actually drives success in venture: failure, timing, and taking risks that look stupid at first.

This Spark20 episode distills Marc’s hard-earned lessons into a 20-minute masterclass for founders, investors, and policymakers navigating uncertainty.

What you’ll learn

• Why timing, not brilliance, often decides who wins.
• Why failure is the ultimate credibility builder for investors.
• How European founders hold themselves back—and what mindset shift is overdue.
• Why down markets are the best time to build companies.
• How the “stupidest ideas” sometimes create the biggest outliers.

Timestamps & Quotes

📌 (00:00:38) Entrepreneur → VC
“My route into venture capital felt like a paid executive MBA… I built, I sold, I bankrupted, and then I joined the so-called evil side to truly understand investors.”

📌 (00:03:31) Failure as Fuel
“Failure is the bigger success… many of my failures turned into the best things that ever happened.”

📌 (00:05:32) Credibility Through Scars
“If I had never built a company, how could I authentically tell a founder I can help them?”

📌 (00:07:29) Wrong = Right in Venture
“As a VC, you’re more often wrong than right. And strangely, the more you’re wrong, the higher your actual output.”

📌 (00:10:38) When Tourists Arrive, Leave
“The moment angels and LPs with no clue flood the market, you literally have to stop investing. That’s when the tourists arrive.”

📌 (00:12:22) Outliers Make the Portfolio
“One angel had ten bets—two of them gorillas and Tier. Didn’t matter what else he had—the outliers alone defined him.”

📌 (00:13:02) Europe vs. US Mindset
“US startups think in billions. European startups think in millions. That mentality shift is everything.”

📌 (00:15:02) Stupid Ideas Win
“If everyone agrees it’s a great deal, don’t do it. The best investments sound like the stupidest idea at first.”

📌 (00:17:42) Why Down Markets Build Giants
“In down markets, founders get humble, go back to fundamentals, and focus on capital efficiency. That’s why the best companies come from downturns.”

This isn’t just a highlight reel—it’s a reminder that in venture capital and entrepreneurship, the rules are upside down. Being wrong isn’t a weakness—it’s proof you’re taking the swings that matter.

👉 Listen now, and share it with someone who needs to think bigger.

🎙️ With over 200 interviews, panels, and livestreams, Beginner’s Mind ranks in the Top 10% globally—and is recognized as the leading deep tech podcast for

Transcript

00:00:00:00 - 00:00:11:12

Christian Soschner

In venture capital, you are more often wrong than right. That's the truth. But one home run can make up for everything.

00:00:11:12 - 00:00:27:14

Christian Soschner

In this spark 20 episode with Mark Ben Carter, we explore why being wrong is actually a sign you are doing it right and why European founders must and learn what they have been taught about playing it safe.

00:00:27:14 - 00:00:38:03

Christian Soschner

Mark, you started as an entrepreneur before moving into venture capital. What made you cross to what you call the evil side?

00:00:38:03 - 00:00:51:07

Marc Penkala

my route into venture capital felt like a paid executive MBA into venture capital Y, because looking at, like, what you would cover in the typical MBA, you you get a very holistic view of the whole landscape of what there's, out there and possibilities.

00:00:51:09 - 00:01:09:19

Marc Penkala

And that's exactly what I did. I started listening to Preneur. I built a couple companies. I sold one, I bankrupted one, one is still alive. Doing very well, is very profitable. From there, I kind of moved over to the evil side, with a very simple thesis. To be fair, my thesis was in order to become a better entrepreneur, I need to understand how offices operate.

00:01:10:16 - 00:01:13:23

Christian Soschner

to understand how they think, how they evaluate why they invest, how

00:01:13:23 - 00:01:34:02

Marc Penkala

they invest. And, by just having that knowledge that implied to me that, if I build a company, I can tailor exactly, what I'm building towards venture capital. So, I, actually joined, VC in Switzerland roughly 12 years ago. And there I literally learned everything bottom up, how to invest early stage.

00:01:34:02 - 00:01:56:22

Marc Penkala

I did global venture development. I've been structuring a venture to do some company building infrastructures, and I've been working with and structuring funds around the globe. and just give me a very broad set of lots possible. so I kind of, sneaked in all these little sub segments of venture capital. And while I've been doing that, obviously you get the high risk if I can do this CVC, I can do this as an angel.

00:01:57:00 - 00:02:13:14

Marc Penkala

And that's the vehicle I was talking about earlier. So I created my own little angel vehicle because I always had the feeling if I want to be a successful angel, have to have a brand. So, ever since I've been doing, like roughly 30 investments and, mainly around the globe, all of them have one thing in common.

00:02:13:14 - 00:02:40:00

Marc Penkala

They're all at this stage, the early bets on founders and things where I had, like, strong conviction that they could work out. And, after I, left my former position, I started working with many funds and actually helped him as a commercial advisor to structure the funds. So I took all the learnings from being a VC, being an angel, being an entrepreneur, and pulled them in to, hey, I can help you to actually build a fund not only from a legal point of view, but rather from a commercial point of view.

00:02:40:02 - 00:03:00:03

Marc Penkala

Like how do you actually build the thesis, how you validate the thesis? How do you actually wrap this and put this in the deck and sell it to a piece? And how do you actually build the on the until I model the fund model and everything around it to, to make sense of what you're doing. And I think looking back, all this actually helps me to run my own fund.

00:03:00:03 - 00:03:19:19

Marc Penkala

It's always nice to be on the sideline, explain to other people what they should do as a consultant, but it's a complete different thing when you do it by yourself, because you're gonna expose yourself to a different type of risk and expose itself to a different type of decision taking. And, I think, my, my story to get to that point actually helped me to master this, in a proper manner.

00:03:19:19 - 00:03:31:07

Christian Soschner

People often believe that successful founders can repeat their points from your experience, but road to failure and timing actually play.

00:03:31:07 - 00:03:38:19

Christian Soschner

Failure is the biggest success. So, I think there's there's a there's many types of entrepreneurs out there. There's some entrepreneurs who are very lucky in the beginning,

00:03:38:19 - 00:03:46:24

Christian Soschner

and they over estimate how smart they are. And they've just been lucky. So A, B, C as well as entrepreneurship, it's

00:03:46:24 - 00:03:52:01

Marc Penkala

a lot about timing. So I'm thinking about Groupon, thinking about Facebook, thinking about many companies.

00:03:52:01 - 00:04:10:07

Marc Penkala

These companies have been there before. They didn't work because it was not the right market for these companies. And, some people just have the right timing, maybe not even smart. And they're lucky to sell a company. And, a small fraction of them, they, they get this hybris. Hey, I was so smart. I can do this again and then realize, well, they can't.

00:04:10:07 - 00:04:31:08

Marc Penkala

There's a certain subset of people who can, built multiple companies and they're they're constantly successful, have a very high hit. They tried, but to be very fair, the likelihood that you build multiple companies and actually sell them and build like great sustainable businesses, it's not very. So, for me, looking back, yeah, I think timing is a very important aspect element.

00:04:31:10 - 00:04:52:24

Marc Penkala

and failure is the bigger success that's, looking at all the big failures in my life, many of them turned into very great things, such as I failed with the company I was running. But one of the investors, I actually happened to work with him for over ten years, and now we build a fund together. So if I wouldn't have failed, maybe I would have done something very differently.

00:04:53:01 - 00:05:08:23

Marc Penkala

And so it's a matter of perspective how you perceive failure and what you do out of it. And we have this weird mentality in Germany, and it's very contrary to to how the U.S works. The failure is something that, you felt didn't work. You know, it's my life is not good enough. It's like, no, totally not you.

00:05:09:00 - 00:05:26:14

Marc Penkala

You have to fail. And, that the principle of resilience fast. You actually get up again and do it again. That's important. And entrepreneurship, nobody will ask. You almost have to fail when you have this one home. And it's totally fine until you paid off, unless you learn and don't do the same mistake twice.

00:05:26:14 - 00:05:32:18

Christian Soschner

what makes it biased from a venture capitalist? Truly credible to founders?

00:05:32:18 - 00:05:54:09

Marc Penkala

And referring back to failure, it's a very important component of investing and working with entrepreneurs on a daily basis. If I would have never built a company, how can I authentically sell to an entrepreneur? I can help you. I never walked in your shoes. I never raised a single dollar, I never failed, I never succeeded like you will always be, pointed out like you don't understand.

00:05:54:14 - 00:06:11:08

Marc Penkala

You're giving me money, but you have not done this. You know it's not experienced as you don't know how the pressure is. And if you have actually experienced that yourself, well, if somebody is just finger pointing at you, it's like, no, you don't understand. Like, no, no, I do. I did this, bankrupted the company, I lost money from others and yes, I did.

00:06:11:08 - 00:06:31:09

Marc Penkala

I actually, built the company and I sold it. I know the process and I know the ups and downs are not challenging. It is an immense mental mind space thing. So, I think it makes you simply more authentic and, honest, actually listen to you if you can tell them from real war stories, if you just always have been on the sideline.

00:06:31:11 - 00:06:47:23

Marc Penkala

Yeah, it's, you know, it's like a doctor who never done the surgery. It's nice that he know it all on paper. but like, in a moment of a crunch, it's not going to be super helpful. So I think, it was very valuable to fail and to succeed along the way. It's not a no to become a better VC.

00:06:48:00 - 00:07:10:03

Marc Penkala

And I think that's, you've seen it in a couple of 10:10 years. The rise of operational VCs, X founders, exited founders and entrepreneurs actually becoming deceased. Are they the best VCs? I don't know, you still have to learn how to do VC, but you obviously understand how to actually build companies and you know what kind of mistakes you've done and you know how long it takes to iterate.

00:07:10:05 - 00:07:18:01

Marc Penkala

And that's very valuable knowledge to assess a company in order to derive whether this company can be successful at some point.

00:07:18:01 - 00:07:29:03

Christian Soschner

Truth is, most professions punish mistakes, but can venture capital. Is it true that being wrong can actually make you more successful?

00:07:29:03 - 00:07:38:03

Marc Penkala

Just imagine, you know, a doctor, a lawyer, a pilot or any of, like, these, very, very important, jobs.

00:07:38:05 - 00:07:40:00

Marc Penkala

Do you think you're going to be successful

00:07:40:00 - 00:07:49:11

Christian Soschner

if you're wrong? Most of the time? No. You don't lose your job immediately. If you're pilot, you crash the plane, you lose your job. If you're a doctor and your patients keep on dying, I'll lose your job.

00:07:49:11 - 00:07:55:07

Marc Penkala

If your lawyer can never win a lawsuit, you lose your job. As a VC, you're more often wrong than right.

00:07:55:09 - 00:08:07:17

Marc Penkala

And there's an inverse correlation between being wrong and being successful. So the more of you wrong, the higher the actual output of your fund. And this is something you don't learn by knowing it. You learn by experience.

00:08:07:17 - 00:08:13:07

Christian Soschner

What was the moment you decided to stop consulting and build your own fund?

00:08:13:07 - 00:08:30:19

Marc Penkala

So I actually stumbled into that and actually ended up working with many funds. And my, my main, motivation was I want to work with funds from different areas early stage, later stage, primary, secondary funds, ICT, Web3, all across the board finding was looking back

00:08:30:19 - 00:08:35:13

Christian Soschner

what I actually learned more than I gave away.

00:08:35:15 - 00:08:36:15

Christian Soschner

the things I gave away

00:08:36:15 - 00:08:51:01

Marc Penkala

valuable for, for the people I worked with, but I kind of learned how to do it differently. Why people approach challenged this in a different way. Just because I do it this way doesn't mean it's the right way. Just one option how to do. And this is what's amazing for me.

00:08:51:01 - 00:09:09:22

Marc Penkala

That's why I decided to do it for multiple years. Because, your learning curve actually is very steep in the beginning. and, you just get better at doing that. And, but at some point, I woke up some morning, I realized I'm a consultant, and I never had vision to be an consultant. So I said, well, now it's maybe time to put my outfit.

00:09:09:22 - 00:09:15:19

Christian Soschner

Mark, tell me, how do you read the signs of market cycles in venture capital?

00:09:16:01 - 00:09:37:14

Marc Penkala

it's a very good question. so looking at all the funds I worked with and looking at the market back in the days, I think the only that you didn't even need a huge justification to be in the market. Why? Because the market was very liquid. So there was so much money in the market for funds as well as for, startups that, raising money was like, not the issue.

00:09:37:16 - 00:10:01:23

Marc Penkala

So you went out, you might have had some track record a little bit and the okay too. Good idea. You could have raised funds as an entrepreneur and as a VC fund. So to be fair, looking at the macro, looking at the past 25 years of venture capital here in Europe, that's an interesting correlation. If there's lots of money in the market, Tvxq, no doubt if there's not that much a lot of money market TV prices go up.

00:10:01:24 - 00:10:28:06

Marc Penkala

Why you become more mindful where to put your money. So fundraising becomes harder, SBC fundraising becomes harder as an entrepreneur. And that's because it's harder. It's just the top people. Raising quality is going up for funds and fund openness and that market. What I found scary was I saw people raising money, founders as well as funds. So said, wow, okay, I'm people that must have a lot of conviction that this is going to work

00:10:28:06 - 00:10:30:20

Christian Soschner

or there's a lot of money.

00:10:30:22 - 00:10:38:06

Christian Soschner

And this is one saying the venture capital, when the tourism like arrive, you should leave. And this usually happens when the market's flooded with money.

00:10:38:06 - 00:10:51:24

Marc Penkala

Angels investing into companies having no idea peace coming to the landscape because they think, hey, this is the new gold trust. I have no absolutely no clue about venture capital, but let me put some money into funds and startups because I think to school this is on the books.

00:10:52:01 - 00:11:14:21

Marc Penkala

So the moment this happens, you literally have to stop investing because the tourists arrived. And I don't mean to sound arrogant manner, it's just a very dangerous time because there's too much stupid money for not good ideas. And I remember at the time very well, like when when I looked at, like that, two commerce companies and when I looked at the micro-mobility companies, I backed down as an angel.

00:11:14:23 - 00:11:37:19

Marc Penkala

So most of them decided to not invest because none of them worked. There were piggybacking on the idea that they can pull off the same thing as food delivery did. Hey, look, there's going to be ten players. They're going to consolidate at some point, they're gonna IPO. That happens. And people thought they kind of can replicate this, but roll ups thrust your models and Razr and stuff like this.

00:11:37:19 - 00:11:56:16

Marc Penkala

They thought they can do it in micromobility and they thought that they can do it with cucumbers. Eventually. None of them worked. Leading to another point, because so much about timing, when to enter and when to leave. If you missed these two points, a good story of minus. I met an angel back then and he's a dude. I have ten angel investments.

00:11:56:21 - 00:12:15:05

Marc Penkala

One of them was one of the first tickets in tier and one of the first tickets, and gorillas. So I was like, okay, all right, dude, you are an outlier. If you have these two home runs in your portfolio, I don't even care what else you have in your portfolio because it's the magnitude of outliers in a portfolio.

00:12:15:10 - 00:12:22:10

Marc Penkala

The rest doesn't matter. I said, you, you must be the smartest guy on earth. Well, he eventually didn't see a single dollar on either of them, even though he was the first

00:12:22:10 - 00:12:30:22

Christian Soschner

Mark, you have often compared European founders with those in the United States. What's the biggest difference in mindset? You see?

00:12:30:22 - 00:12:31:13

Marc Penkala

So, yeah.

00:12:31:15 - 00:12:34:08

Christian Soschner

Like, your favorite thing I heard the other day is like, the

00:12:34:08 - 00:12:50:16

Christian Soschner

mentality delta between us and, and Europe is very simple. US startups think and $0 billion companies and European, companies thinking $0 million companies. You have to have the then before you get it. But, at least it was for me. It's like, oh yeah, exactly.

00:12:50:16 - 00:12:51:24

Christian Soschner

Just think bigger.

00:12:52:17 - 00:13:10:13

Marc Penkala

the most important thing is risk appetite and risk profile. That's a very different risk profile in the US. And, I like to say that because I think it's very true in Europe, we just have the mentality of what could go wrong. Do you guys see little? Yeah, absolutely. You look at your risk, speak 200 pieces. But how do you assess companies?

00:13:10:15 - 00:13:24:18

Marc Penkala

90% of the conversation will be circling around, oh I don't know the if the GTM is going to work. I'm not sure if that's the right CTO. I'm not sure if, they actually find product market fit. I'm not sure if they can scale their sales to tech whatsoever.

00:13:24:21 - 00:13:28:00

Marc Penkala

We are members of this ecosystem. So we are the same basically.

00:13:28:02 - 00:13:31:16

Christian Soschner

Yeah. And then us you rather think about what can go right.

00:13:32:13 - 00:13:47:10

Christian Soschner

So can this be an outlier. What about if they crack this nut and become the market leader in this. what's the potential of this happens. So the mentality looking at an early stage company from a different part of the table changes

00:13:47:10 - 00:13:57:09

Christian Soschner

the whole view on things. The second component is liquidity. That's more money in the market. Think about how much money in the venture capital market in the US and how much money there is in Europe.

00:13:57:11 - 00:14:15:22

Christian Soschner

Accessibility, it's a easier be. It's more so, even companies which might not seem like the best of smartest in the world receive more money. So yeah, just a higher hit rate because more companies get funded. and, I think Europe still has

00:14:15:22 - 00:14:32:03

Marc Penkala

to learn quite a lot. It's going to take quite some time. And here again when kindergarten, then college. So it's totally fine. But we're picking up fast. That's very important to to learn and to understand. And and the mentality shift will come with next generations with experience and as well experienced managers, not only entrepreneurs.

00:14:32:03 - 00:14:55:12

Marc Penkala

The ecosystem lives on both sides of the table. And, we will eventually get that. This is the bottom line, but it's still going to take some time to actually catch up with, what I said and what people built in the US is global footprint. What people built in Europe is European footprint. So we built companies for the European market, namely one which is a global player and B2C.

00:14:55:14 - 00:14:56:10

Marc Penkala

That's not

00:14:56:10 - 00:14:57:01

Marc Penkala

investor.

00:14:57:01 - 00:15:02:22

Christian Soschner

does the best investments sometimes sound like the stupidest idea at first?

00:15:02:22 - 00:15:11:23

Marc Penkala

when you think about venture capital this is one very awkward thing. And it is so counter-intuitive when you think about it. But if you give it a second thought, you like, yeah, actually you're right.

00:15:12:00 - 00:15:28:05

Marc Penkala

So if you look at deals and everybody looks at a deal like an a Nike and everybody says, this is great, still in the world, you should not do the deal. Very simple. Why? Because the deal in an early stage company especially doesn't have the risk profile. It has to it has to be contrary. Somebody has to.

00:15:28:05 - 00:15:49:17

Marc Penkala

That's the stupidest thing I have ever heard in my life. It's the stupidest thing. Don't do it. So when you think about venture capital funds and how they operate and how they become successful and with outside the returns, any fund about five x TV return have one thing in common. They have a very high loss. Weight loss rates range between 40 and 50%.

00:15:49:19 - 00:16:14:06

Marc Penkala

Funds which are mediocre are still good. But my bad Have a loss ratio of 30%. What does it mean? It means, you know, smaller returns on the companies which you hit. And, yeah, that leads to smaller outcomes for the whole fund. But you try to opt for less beta. But in venture capital, the power law is the most apparent thing.

00:16:14:10 - 00:16:36:18

Marc Penkala

Like one big hit, but change the whole idea. So, the top funds. But they have incumbents, not only the loss ratio, but the magnitude of outliers. So the magnitude of the outliers, which they have in their portfolio is twice as high as the magnitude of outliers, which not well-performing, fund anything between 2 and 3 x, which is already good fun to be fat and half.

00:16:36:20 - 00:16:57:07

Marc Penkala

So you have to kind of wake up and say, nope, I have to take the risk in order to create outsized returns. And the US have mastered that. They look at those, this idea, it's pre-seed. There's three smart guys to take a market, try to kind of revamp the whole market and do something differently. They receive a 20 million check.

00:16:57:09 - 00:17:11:17

Marc Penkala

We had these weird times, like here in Europe, where gorillas all of a sudden got funded, was the fastest unicorn I went there, I like all these companies, but we kind of said, oh, yeah, we have to, you know, you have to take everybody kind of jumped on this train and said, you're going to be the next week.

00:17:11:17 - 00:17:26:06

Marc Penkala

Turned out not to be, but what we like to do in Europe, oh, it didn't work. So we're not going to do it again. What the people do in the US to say it didn't work. So we're going to do it again. Till it works. But in Europe people are scared away and say what are we. Oh I'm so biased.

00:17:26:06 - 00:17:42:11

Marc Penkala

I did this already. It didn't work. I'm not going to do it again. But then you miss on the opportunities which will work eventually. And the mindset towards taking risk and accepting that risk is the biggest part. On the most important part to assess a venture capital. It's not that.

00:17:42:11 - 00:17:48:21

Christian Soschner

looking at today's environment, why might their own markets actually be the best time to build?

00:17:48:21 - 00:18:06:02

Marc Penkala

like fundraising is always hard. And up my Conan Doyle market, the only thing which changes is the narrative. And then upmarket, everyone is excited. So the narrative circulating and you're missing on this great thing which is currently happening, right? The other side is lots of people are not everybody's going after a lot of money in a down market.

00:18:06:07 - 00:18:24:08

Marc Penkala

Not many people are out, but there's not much money. But you're selling the exact opposite. Look, now is the time to buy. If you want to buy into the market when the market is down exactly like an illiquid market, you don't want to buy the peak. You don't want to buy Bitcoin $100,000. You want to buy it when it's down, it's going to go up again.

00:18:24:10 - 00:18:45:02

Marc Penkala

You see the same thing. Look, when a down market entrepreneurs are humble, B so humble. Everyone is going back to fundamentals. We're going back to default a life mentality. People are looking on one KPI for capital efficiency. What can you squeeze out? Going to give you a million and an upmarket I give you a million. And then you you kind of think you're a rocket star.

00:18:45:02 - 00:19:06:18

Marc Penkala

When you create hundred thousand in revenues and double market. Yeah. Somebody gives you a million and you create 2 million revenues out of that. So capital efficiency changes because the market's not liquid. That's why best companies are created in down markets. The shift in mentality from VCs giving companies to smart founders who deploy, in a smart way.

00:19:06:18 - 00:19:28:05

Marc Penkala

And, that's the beauty about a down market. Less money, less pressure, more time, more conviction building better deals. And, it's the money is flowing in again. It will stack, stack, stack until we have this weird situation that you have, I don't know, X billion dollars in dry powder is only in Europe, which has to go somewhere.

00:19:28:07 - 00:19:54:08

Marc Penkala

It will attract stupid people, building stupid companies, receiving money. Just stupid money as well. And the great people will be hunted down by the great funds with outside valuations and droughts. Which leads to the next problem. You have to create $30 billion company to actually make these companies somehow, relevant in terms of returns. And, it has been like that will be like that.

00:19:54:08 - 00:20:06:10

Marc Penkala

And, if I would say whether we learned out of the last, I would call it friendly correction, or, step back. maybe. Yes. But I thought.