How Belgium’s best VC stopped investing offline and went all-in on AngelList

Sep 28, 2016 · 7 min read

AngelList works with a number of dedicated funds and professional investors, who each deploy millions or tens of millions of dollars on the platform.

Today, we hear from E-Merge partners Laurent Drion and Patrice Decafmeyer, two successful European technology investors who ran a traditional venture fund for years before redirecting their website to AngelList and moving their venture investing online:

  • They stopped investing offline altogether because of the diversity and quality of dealflow they’re getting on AngelList
  • They say their portfolio of 200+ early stage investments (including some completely outside of their geography and historical investment focus) would not have been conceivable without AngelList
  • They think proper due diligence online should take hours, not weeks.

Julie Ruvolo: What were you doing before you started E-Merge, investing or otherwise?

Laurent: I started my first company with Grégory Hédo, E-Merge’s third partner, when I was at university in 1990. It was a Mac mail order business, with printed and mailed catalogs, a call center, and fax order-taking. We bootstrapped with $6K and were profitable every year for the 14 years before we sold (and for years after). We learned a lot about entrepreneurship and bootstrapping.

That early success generated some dealflow from friends, and we had the opportunity to write our first angel check for $25K to what became the first and biggest ISP in Belgium. It was acquired a year later by the incumbent operator. We invested our second $25K check in a company which was quickly acquired and became eBay’s Belgian representation office. After such an exciting start, we were hooked on angel investing.

Patrice: I went to university with Laurent, then went to work for Citibank in Chile, leading a risk management team. When I came back to Belgium, E-Merge invested in a comparison shopping website I co-founded. Eventually, Laurent and Grégory proposed I join them.

Are you only investing through AngelList at the moment, or also offline?

Laurent: Before starting to invest through AngelList, E-Merge had done about 40 offline/direct investments over the last 20 years. Mostly as the lead Seed stage investor. We did 25 investments in Europe and 15 in the US.

In Q3 2015, we started investing small amounts in AngelList syndicates, at first mostly driven by curiosity for a whole new way to do angel investing. We could get educated on new verticals and models without having to write large checks or take care of the paperwork or legal stuff that is managed for us by AngelList.

We were rapidly amazed by the diversity and quality of the dealflow that we were receiving from AngelList. In Q1 2016, we decided we would only invest in new companies through AngelList syndicates and private SPVs.

We are receiving 2–5 carefully screened deals per day from AngelList (and not only on weekdays). It had become impossible for us to analyze that dealflow on top of the huge, un-vetted dealflow that we were getting directly. So we decided to focus our efforts on AngelList.

You are based in Brussels, and you are primarily investing online. I’d like to get some thoughts on this.

Laurent: One thing is for sure, without AngelList, we would never have been able to start investing in the US while remaining based in Belgium. The quantity of information you can gather online nowadays is incredible.

We have been in the business of angel investing for over twenty years, and we are convinced that in 2016, a few hours of online due diligence provides a lot more relevant and actionable information than days of classic due diligence could provide ten or twenty years ago.

The quantity of information you can gather online nowadays is incredible. In 2016, a few hours of online due diligence provides a lot more relevant and actionable information than days of classic due diligence could provide ten or twenty years ago.

What is your investment focus on AngelList?

Laurent: Regarding stage, we still focus our largest checks on Seed and Series A, but thanks to the convenience of investing through AngelList, we are also writing small checks in some Series B and C rounds.

For large checks (over $150K), our preferred models and verticals are the same as for our past offline investment: mostly SaaS and marketplaces, specifically ecommerce infrastructure, Internet infrastructure, telecommunications and “new space” opportunities like CubeSat constellations and related services.

For smaller amounts, AngeList allows us to broaden our scope since we can write small checks without incurring any legal expenses. We have done all kinds of investments outside of our historical verticals, from drones and automatic container farms to bio-fabricated leather (Modern Meadow) and an AI-driven hedge fund (Numerai). We are learning a lot about new and exciting industries, most of the time co-investing in a just a few clicks alongside established VCs leading the rounds.

How many investments have you made on AngelList?

Patrice: Over 200.

Laurent: Our large syndicate investments (over $300K) include companies like Onfleet (on-demand economy deliveries tracking & optimization), Happyco (real estate onsite inspection SaaS solutions), Sezzle (online ACH payments made as easy as Paypal payments), and Plasso (an online payment solution built on top of Stripe without requiring a single line of code to start accepting payments). (*Read AngelList’s interview with Plasso founder Drew Wilson.)

How do you do diligence on these online deals? There’s usually less information and less time to decide, compared to offline deals.

Laurent: It depends on the amount we want to invest. For small checks, we rely on the information provided on AngelList, the lead’s investment memo and signaling from other co-investors. We also spend a lot of time reviewing the company and founder’s social media, demo days videos, reviews, interviews and so forth. Most of the time, we test the product or service ourselves.

For larger amounts, we do all of the above in more detail, plus calls and emails with the founders and lead investor. The biggest difference with the old way of doing things is that the quality of dealflow we get is unusually good since it is already filtered and vetted by AngelList and the syndicate leads. It gives us more time to work on what we enjoy and what we think is important.

And once we have made up our mind to invest in a company, AngelList provides us with a one-click investing experience that takes care of the legal and tax paperwork for the lifetime of our investments.

Once we have made up our mind to invest in a company, AngelList provides us with a one-click investing experience that takes care of the legal and tax paperwork for the lifetime of our investments.

What is your interaction like with the lead investors you’re backing? Do you tend to back a small group of leads you’ve gotten familiar with?

Patrice: We’ve worked with about 100 different leads. Out of that, there are nine leads with whom we’ve worked on five or more deals, and 25 leads with whom we’ve worked on two to four deals.

Laurent: We back most of the syndicate leads. That’s the way to go if you want to get the largest dealflow from AngelList. We are in touch with many of them on an ongoing basis. Their write-ups are usually very useful in the decision process. They are also the gatekeepers to the founders, and they will often make an intro to founders only after we’ve proved we can be helpful to the startup, and are considering writing a large check.

The syndicate which got the biggest dollar amount from us so far is Gil Penchina and Shawn Merani’s SaaS Startups by syndicate, which has collected about $2M in backing and commitments from us. They are one of the largest syndicates, and we are very much into SaaS models.

What did you think about paying carry on these deals?

Laurent: The private dealflow through syndicates and the huge savings in time and lawyer fees are worth the downside of having to pay carry on the deal. We wouldn’t have been so interested if syndicates charged management fees. Paying carry is a good win-win, and it keeps the interests of all parties aligned.

What does portfolio management look like for you?

Patrice: We try to concentrate on interacting with very early-stage companies where we think we can contribute to the discussions and bring an outsider view to their decision process.

Laurent: Of our 200+ AngelList investments, we are in direct contact with the founders of 50 startups. We interact with most of them several times a month and get regular business updates. And we travel six to eight times a year to the US to meet the founders and leads.

Any advice for founders?

Laurent: Time allows you to create outstanding value without burning high amounts of cash. Our two biggest successes so far are great examples: (a leading European payment gateway) and (a market leader in virtual phone numbers) raised only low/mid single-digit $M Seed money from E-Merge and a few friends.

Ogone ended up being acquired 13 years later by Ingenico for $484M, and last year, ten years after our investment, Voxbone was acquired by Vitruvian for an undisclosed amount. So we always tell our founders that if their burn rate is low, time becomes their best friend instead of being their worst enemy.

Learn more about professional investing on AngelList.

Originally published at on September 28, 2016.


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