The Quest of Company Building - The first year of Le Studio VC.

Some History

In the beginning of 1887 there was nothing but the idea to construct an iron tower on the “Champ de Mars”, 300m of height, in order to pay tribute to 100 years of French Revolution.

107 applications later, Gustave Eiffel and two talented engineers were chosen to construct the tower, known today as landmark of the city of Paris — Justifiably the right choice, since 22 months later, after relentless execution, using compacted world class engineering and architectural knowledge and composing a team of 400, the Eiffel tower was erected. What made them succeed, where others would have failed ?

One year after the inception of Le Studio ( ), a Parisian based Startup Studio and VC, and the co-creation of three startups (and having done multiple VC investments, but that’s another story) we side with the pioneers in the startup studio approach, coming to the conclusion that there is a clear rationale behind building a successful company, just like building a timeless landmark.

The Pain Point

Everyone in the Ecosystem of early stage investment knows that very talented individuals with the drive to create a startup often fail, because they are missing very essential key elements of company building. Effectively it is a bet against the odds to have the right team, the right idea, the right accelerating environment, expertise in a specific field, a great network, experienced advisors and enough financial backup — and all that at the same time.

Our Approach

We therefore decided to take on the mission to provide talented founders with the essentials of company building, and think that by doing so in a data driven and scientific way, we can increase the chances of the founders to create successful startups. Under these circumstances, we think that the deal terms of a pre-seed investment from our side are more attractive than participating in regular seed rounds, in times of competitive investment environments and unreasonable valuations.

Here is what we did: In July 2015, the founders of Pricematch, a yield management B2B SaaS company for hotels, acquired by, and myself decided to create a Startup Studio, based in Paris.

The Candidates

We started by finding a number of talented CEO profiles (if possible in a scalable way) that were hungry and driven to start their own company. We used Linkedin, other HR agencies but also (and mainly) our network to generate a stable “ People Flow” and came up with an own methodology and interviewing process, that (as we hope) ensured us to filter the strongest and most passionated future startup leaders.

As with every startup, this part was difficult, and our discussions evolved mainly around which profiles are the best to kick off and likewise lead a company when it is growing. Former entrepreneurs, usually with lots of passion and drive, but potentially with less sense for “birds eye” strategy who can lose grip of the company as it is growing OR strong hard skills as in former consultants or investment bankers, full of knowledge, but maybe without the necessary understanding of what startup life is like, without juniors and PA’s.

Since no stereotype is perfectly true, we made our decision on a case-to-case basis and chose to work with people that combine strong backgrounds with entrepreneurial drive.

We also decided that part of our value proposition will be to act as an “invisible” co-founder, balancing some of the Founders tendencies and shortcomings giving hints and advices.

We shortlisted a number of business ideas, scalable and in multiple sectors (an approach that we decided to change very recently). The sectors went from B2B SaaS to marketplaces, e-commerce, real estate, reached from Pricematch pain points to the observations of market trends — freely following the principle of “Doing things that don’t scale” in the beginning of a journey. We also learned to listen to our candidates, that often brought better business ideas than ourselves.

The Process

When a CEO had proposed or chosen a business idea, and presented us with a detailed Go To Market Plan, we supported him with finding the best CTO and invested amounts tickets around 200k in the newly incorporated company. After long consideration, we decided to create a simple and fair equity deal: We take as much equity as every Co-Founder, propose a simple SHA without preferential rights, and do everything to keep the process of incorporation as simple as possible.

Having complex Shareholder agreements and long negotiations on equity and drag along clauses is in no-one’s interest at such an early stage, we decided in pragmatism, and dropped other plans that included more complex stock option agreements. For an investment of 200k for in-between 25% and 33% equity, many recommended us differently (especially lawyers), but for us, leadership comes with ownership and without empowered CEO’s the companies will unlikely be able to generate an upside for its investors. This decision was not easy, but we preferred to lose 30k in legal fees that we had already invested in complex legal documents, than to lose our agility and ability to move ahead.

After having co-created three companies, whose stories are unique and I will leave it to the CEO’s of Elephoners ( , Tolteck ( and Homeloop ( ) to explain the inside-outs of their businesses,new challenges are ahead. I feel comfortable in saying that we were able to give access to finance, create strong teams, come up with reasonable good ideas, opening our network and mentor on ad-hoc issues.

The steps ahead are likewise complex, needing to maintain our “value added” through regular weekly calls, progress benchmarking, “ad-hoc problem solving on slack”, regular focused discussions on key topics in tech and strategy and finding the right areas in which we can hire mutualised resources — able to work on all projects at the same time. All this while pitching for financing to be able to create new projects and building a brand to attract future CEO/CTO candidates.

One strong takeaway of the company builder approach is the work in cycles, the “building” cycle, in which we co-create new companies is fundamentally different from the “execution cycle” in which we need to increase the likelihood of existing companies succeeding. I believe the biggest challenge, will be to upheld and automate both workstreams and run them at the same time.

Some additional lessons we have learned in the last year:

1. For Startups, Leadership comes with Ownership: We learned that the founding team must own the big majority of the equity of the company to ensure future success. Expecting someone to lead a company, without real equity, might attract executors, but no leaders and will always create friction on the long run.

2. A Startup Studio needs to focus on a sector/vertical or industry: Having started as a space agnostic startup studio, we came to the conclusion that, to provide really strong unfair advantages and concentrate unique business expertise, we will have to focus on one sector. We take Rocket Internet as example, that managed to build unique expertise in B2C customer acquisition. Having projects in different sectors makes hiring mutualized resources more difficult (maybe impossible) and creates a natural burden for the development of synergies. Our ambition is to build a similar expertise in B2B SaaS since the world is too competitive to be good in everything at the same time.

3. A Startup Studio is a Startup, not an Investment Fund: There is no Playbook for Startup Studios, differently than for VCs (some might say I am wrong, and yes there is a lot of innovation amongst VCs, but still..) We have to constantly change the way we operate to walk with our customers (the Founders), iterate and take in feedback, change the way we operate.

4. Every project is different: Every project and every founder is different, has different needs, strengths and weaknesses. A lot of our value proposition is to be sensitive and find the right fields where we can add value.

5. So far Startup Studios have not proven to be innovative, but good in execution:We think that the advantage that we can provide our customers with, lies in execution. For projects with a high level of innovation skills, a company builder principle might not be the best playground.

So ?

Many challenges are ahead, but the belief in the company builder model is stronger than ever. Focusing on our current projects, we still plan ahead and evaluate new project opportunities, looking for more talents and other Startup Studio believers, that want to be part of this amazing journey.

Interested in Le Studio or any feedback ?

One clap, two clap, three clap, forty?

By clapping more or less, you can signal to us which stories really stand out.