Timoteo Rouchon of Upscalers: 5 Things We Need To Do To Close The VC Gender Gap

An Interview With Jilea Hemmings

It starts with schools. Schools should talk a lot more about entrepreneurship and set up proper career advisory programs where entrepreneurship is revalued as a viable job option for anyone.

As part of my series about “the five things we need to do to close the VC gender and racial gap” I had the pleasure of interviewing Timoteo Rouchon.

Tim is a 26 year-old French tech enthusiast, who’s spent the last 9-months building a European community of operating angels called Upscalers. Prior to Upscalers, Tim worked as a strategy consultant. With Upscalers, his mission is to create the N°1 community of operating angels in Europe, he says.

Thank you so much for joining us! Can you tell us the “backstory” that brought you to this career path?

Because that’s the best job in the world! You get to meet amazing people, founders and investors, from whom you learn so much on very different topics. I’ve always said that the best job I could do would be one where I would be constantly challenged intellectually by the people around me. That’s exactly what I found when starting Upscalers.

I believe we have a unique position on the market being in touch with both sides of the ecosystem: investors and founders. Our job is to connect founders with the right investors / mentors, and investors together within a community. So we are constantly challenged by really smart founders, whose ideas force us to keep up to date with the latest tech trends in multiple industries. But we are also challenged by brilliant investors who assess these ideas as investment opportunities.

Plus, we do this at a European level. There is no better place to be right now than Europe for Tech. I’ve always been a strong European, so the vision perfectly fitted my ambitions!

Can you share a story of your most successful Angel or VC investment? In your opinion, what was its main lesson?

It’s only been 9 months since we started Upscalers. I guess our most successful investments are the ones where we can feel that we collectively bring value (beyond money) to the founders. It can be as advisors on specific topics, by making the right intros or simply by showing them support and making life easy for them (especially when raising funds, we all know how much of a nightmare it can be for founders). Thus far, our success is measured by the trustful relationships that we create with and between our founders and investors. And I am pretty sure that this will translate into financial success in the near future.

Can you share a story of an Angel or VC funding “failure” of yours? Is there a lesson or take away that you took out of that that our readers can learn from?

This summer, we wanted to invest in a climate tech company with a great product and roadmap. As usual, we went through the whole due diligence process, involved experts from the community in analysing the deal, and collected interests from our investors.

Eventually the deal never happened, for a simple reason: the day before signing the term sheet, we discovered that we had no more allocation.

Truth is we loved the idea. Execution was good, but we didn’t have this little spark with the CEO.

The lesson we took from this setback was that we needed to review our priorities in the decision-making process. Now, the first thing we make sure of is that we (and the founders) are excited about working together. It needs to be ‘a match made in heaven’. A simple yet very efficient way to assess that is to ask ourselves: do we want to go for a beer with them? If not, we’ll pass.

Second, we make sure that the founding Team is open to receive feedback and to be challenged on the business. Writing checks and staying silent is not what we like to do. We want to bring value beyond money. So if the team is not willing to be helped, we pass.

Was there a company that you turned down, but now regret? Can you share the story? What lesson did you learn from that?

We try to involve experts from our community in analyzing deals as much as we can. The general idea behind this is that if we use collective intelligence, we limit the risk of turning down good investment opportunities or proceeding with bad ones.

However, there are companies where all lights seem green, but where you end up not investing because of external factors you can’t really control. This can be frustrating when you are almost 100% sure the company can be a huge success, but your gut feeling tells you otherwise.

In the end, there are so many good projects out there that you can’t spend your time regretting the opportunities you miss. It’s only a question of matching founders with the right investors and vice versa.

Ok let’s jump to the main focus of our interview. According to this article in Fortune, only 2.2% of VC dollars went to women in 2018. A similar number went to minority owned companies. Can you share with our readers what your firm is doing to help close the VC gender and racial gap?

We are well aware of these numbers… They are the same in Europe, and have not changed since 2018. That’s appalling.

First, we look for ways to be more vocal about this. That can be through a podcast, or with a video series we’ll soon be launching called Upscalers W. A lot has to be done with awareness and education. In the end, we are all players of our own ecosystem. We have the power to shape it the way we want it to be.

But being vocal is not enough. We also need action. And action requires accountability.

At Upscalers, we hold ourselves accountable for investing in at least 50% companies with one woman as a founder. This means that we source, screen and prioritize deals accordingly. Diversity is an investment criteria that we look at just as we would look at more traditional KPIs. Diverse teams tend to be more successful so it should be a no-brainer for any investor.

As of today, we invested in 6 companies, 3 of which have a mixed or women-only founding team.

Finally, we try to onboard as many diverse investors as possible in the community. Simply because investors are more likely to invest in founders they can easily relate to. The beauty of our model is that we are cross-border, so we onboard people from very diverse horizons.

Can you recommend 5 things that need to be done on a broader societal level to close the VC gender and racial gap. Please share a story or example for each.

We need to see founders with more diverse backgrounds. 83% of all founders in Europe identify as White / Caucasian according to Atomico latest State of European Tech report. We need to de-construct the whole system that pushes women and minorities to not even consider entrepreneurship as a viable option because it’s a “white boys game”.

- It starts with schools. Schools should talk a lot more about entrepreneurship and set up proper career advisory programs where entrepreneurship is revalued as a viable job option for anyone.

- Self-education should also be considered as good education as any university program. Close to 85% of European founders have a university degree. Yet, the Internet is a much more inclusive learning tool than any school or university. We have this fantastic tool at our disposal that is not valued by the job market and does not play out well with the traditional education system.

We also need to see a step change on the investors’ side.

- Let’s invest more in women and minorities fund managers. Female investors are 2X more likely to invest in startups with one female founder, and more than 3X more likely to invest in a female CEO, Pitchbook data says. That way, we’ll create fairer opportunities to raise funds.

- Let’s understand that mixed-teams tend to perform better than white-only or men-only teams. It makes perfect economic sense to look at diversity as a KPI. Just as you’d look at churn rate or revenue growth! But we need more data on this to make it widely accepted.

- Let’s make investing in startups easier and accessible to everyone. We’re seeing positive changes with Gen Zers, who are rocking the traditional structures of VC: setting up their own funds, using social media as a way to break into VC, creating communities… Harry Stebbings, Mac Conwell or Megan Loyst are great examples for this. I’m sure that if we lift the barriers to investing in startups, the ecosystem will be more diverse overall.

Those are just ideas. I don’t have the secret sauce. There is just so much to do in our modern societies to close the gender and racial gap. There is no one magical solution.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

I would completely revamp the education system. Schools should provide children with the basics of reading, writing, counting, history and self-conduct… but then, it makes no sense to spend hours in classrooms studying theory. Schools have to leverage all the fantastic resources that are available on the internet (for free), help children to navigate through them and provide space to discuss them.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“One person can change your life”… so take your chance. When I decided to move to Tech and investing, I had no idea where to start. I knew I wanted to learn and was completely open about ways to get involved. So I reached out to people in the industry, who carried projects that appealed to me. I ended up finding my business partner.

9 months later, we built a cross-border community with top operating angels, collectively invested more than €1M in six startups, started working on raising a fund and building a new company as a side project.

Some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might see this, especially if we tag them. :-)

I’d love to meet with Ryan Breslow (founder of Bolt and The Movement). He is exactly what I consider leaders to be: amazing at doing business, and equally amazing at doing good for the people around him. I would have so much to learn from him.

This was really meaningful! Thank you so much for your time.