For foreign investors willing to back startups in France
Kima Ventures has the largest portfolio of French companies in the world. We’ve had the opportunity to observe over the past few years the incredible rise of the following phenomenons:
- There are more and more French entrepreneurs, with either remarkable learning curves and/or past valuable experiences, making them more talented and ambitious than ever.
- This growing environment foster excellence and velocity on top of talent and ambition. It’s creating compounded effects that make us believe that we are just at the beginning of a remarkable ride for French startups.
- As a consequence, more and more foreign investors are interested in investing in French VC firms (Which have still to step up their game and ambition) but more importantly, in French startups.
Having seen (too much) so many foreign investors trying to engage with investors and entrepreneurs in France, without knowing where to start and how to operate, but also having observed both good and bad patterns from them, I thought it was worth a short piece in order to help all of you navigate through the charming intricacies of our ecosystem.
Let’s start with the underlying matter of everything venture: entrepreneurs. We all have our singularities that translate into great qualities and flaws, paradoxical traits that make them do things the way they do.
I don’t want to fall into giving generalities about French founders. However, they are surely not American, German, British… Learn to understand them before you make your mind about them. Meet with French entrepreneurs, go to their offices, see companies of different sectors and stages, ask about the tech, the product, the sales, the strategy.
Otherwise, you might end up judging what you do not understand, which will make you miss the outliers and also make terrible mistakes along the way.
Also, the more genuinely interested in French founders you are, the better your reputation will become among them over time.
Whether we talk about Venture Capital firms or Business Angels, they are now over-solicited by foreign investors.
If you show up just to get to know each other or to talk about that hot company that you’ve heard about, there is no way you will end up in the top decile of foreign investors that people respect and praise words about.
Either both your credentials and reputation (and not just the former) precede you, or you have to show up with real value upfront to build your reputation.
Do not just throw an event. Do not try to make a big splash. Build meaningful relationships with few people, make yourself useful to the founders you get introduced to, make sure the words spread about your valuable feedback and helpful comments.
Here are the mistakes that some foreign investors did recently, and that should help you understand what to do and not to.
- If you get excited about a company, engage for real. Do not send a term sheet that will get revised or pulled out because you realize that you’re finally not so comfortable with the stage of the company or the terms you’ve set. We’ve seen that. I have a couple of investors in my blacklist.
- If you send associates and principals, make sure they are legitimate and liked among founders, with the ability to make partners engage quickly and more importantly thoroughly (Eleonore Crespo at Index has probably been the best example out there).
- Whenever you engage with a founder, provide clear feedback, quickly, so they know where you stand. Foreign investors tend to speak with founders thinking it’s kind of a fun trip in Paris Startup Lalaland. It’s not. Founders expect meaningful interactions with you and a clear position from you. By default, their time is more valuable than yours, regardless of your status.
- Of course, you can make calls with founders and engage from abroad. However, that’s not enough. If you are interested in French Founders, come over once a quarter at least to make your presence meaningfully visible.
At Kima, with our team of three people, we see approximately 250 companies in our dealflow every week and invest in one (mostly French) company every three days. We are trying to build an index of the best french startups, performing in the top decile despite our wide portfolio distribution. We are fast to deal with, ambitious, and convinced that quantity and quality match through honesty and efficiency in the process of making deals and supporting them.
Aside Kima, we have invested in companies that we believe can profoundly transform their industries, therefore building new leaders that will be worth at the very least 5 billion by the time they exit or go public. Among them are Alan.eu, Dice.fm, Doctrine.com, Payfit.com, Ibanfirst.com, Openclassrooms.com, Side.co, Sourced.tech.
Our job is to foster the ambition of remarkably talented teams. We do not optimize for returns nor mitigate risks. Our purpose is to maximize potentials toward building worldwide category definers.
If you believe we can then reach out to us, French founders and investors. If you don’t, that’s ok, come enjoy wine & cheese & snails & foie gras & frog’s legs… :)