Episode 77: Delphinus Venture Capital: Mathias Brink Lorenz on the Evergreen Advantage and the "Low Inclusion, High Margin" thesis

In this episode, I sit down with Mathias Brink Lorenz, CEO and Managing Partner of Delphinus Venture Capital, a newly formed €80M evergreen fund backed exclusively by four major Danish corporates and a university endowment. Mathias pulls back the curtain on the perverse incentives of the traditional "10+2" VC model, explaining how the pressure to generate management fees often forces GPs into bad deals and inflated valuations. He breaks down why Delphinus operates as an evergreen structure focused solely on long-term Net IRR and why they are hyper-focused on the Danish ecosystem. Finally, Mathias delivers a masterclass on FoodTech unit economics, explaining why commodity alternatives (like cocoa or bulk protein) struggle, and why the real venture returns lie in "low inclusion, high margin" ingredients like enzymes and complex savory flavors.

Key Facts Delphinus Venture Capital:

Goal: To deploy an €80M evergreen fund into Danish research-focused startups (Pre-Seed to Series B) across AgriFood, Bioeconomy, MedTech, and Dual-Use tech.
Milestone: Successfully launched the fund with an unusual and highly aligned LP base of three major Danish corporates (Norlys, Heartland, Salling Group) and Aarhus University Research Foundation (AUFF).

Alex’s Top Findings:

The Flaw in the Traditional VC Model. Mathias offers a candid critique of the standard 10-year venture capital structure. He argues that traditional VCs are incentivized to optimize for management fees and short-term paper markups to raise their next fund, rather than focusing on the long-term health of the startup. Delphinus uses an evergreen structure with a lower management fee, tying GP compensation almost entirely to carry, ensuring alignment with the founders' actual path to profitability rather than artificial valuation bumps. "A traditional VC is under pressure to invest at a certain pace no matter if the deal is good or not... What is it you are solving for at seed stage? A high evaluation... just to get to the next fund. So all of those behaviors inherent in the ecosystem of VCs, we're trying not to go to."
The "Picks and Shovels" Strategy for FoodTech. Startups building massive, capital-intensive indoor farms or attempting to replace bulk commodities often suffer from terrible gross margins. Mathias advises focusing on the technology that enables the industry—the "picks and shovels." He looks for B2B solutions and enabling technologies that offer high-margin support to the broader AgriFood ecosystem. "Often it's better to put on the picks and shovels approach... those would be the great sort of VC bets rather than the individual miner going into the mountain and maybe striking silver or gold... And I think I see the same in agri-food tech... betting on the high-tech solutions, high-margin supporting technologies."
The "Low Inclusion, High Margin" Ingredient Thesis. Why did Delphinus invest in Reduced (savory flavors) and Orbiotics (prebiotics)? Because they follow the enzyme playbook. When your ingredient makes up only a tiny fraction of the end product's total volume (low inclusion rate) but is critical to the product's function, flavor, or label (high value), you can command massive gross margins without significantly impacting the FMCG's overall unit cost. "If you sell a loaf of bread, the actual cost assigned to the enzyme is minuscule. What really matters for your unit cost is the flour... So if the color [or flavor] makes all the difference for how the yogurt is perceived... you can charge a premium. It's really about how much of the total product cost do you constitute with your own ingredient."