This is the question answered by Jean de La Rochebrochard from Kima Ventures, the most active Business Angel in the world
Portugal news - What represents a good deal for a Business Angel? This is the question answered by Jean de La Rochebrochard from Kima Ventures, the most active Business Angel in the world, in an interview with Décideurs Magazine by Olivia Vignaud.
For nearly ten years, Jean de La Rochebrochard has been running Kima Ventures, "the most active business angel in the world", owned by Xavier Niel and in which he also invests. With an average of two operations per week for tickets of around 150,000 euros, the managing partner sees many files come through, giving him a very precise vision of the market.
How did you become a business angel?
Jean de La Rochebrochard - Between 2008 and 2013, as an investment banker, I helped startups raise money. I was often frustrated in my interactions with investors, whom I didn't always find to be very good decision-makers or very friendly. I really enjoyed working on the Captain Train case, which was sold to Trainline for a valuation of around 200 million euros. At that time, I thought that I could do the same job as the investors I knew, but perhaps better. In 2015, I met Xavier Niel, who offered me the position of head of Kima Ventures. Since then, we have been doing around a hundred deals a year.
What makes a good deal?
There is no model for good deals, but several phases are common to all. First, sourcing. We receive files from our network, we hunt for deals, and we receive requests from entrepreneurs who contact us straight. These three methods that I have just listed are listed in order of importance. The deals that we look at the most are those that are brought to us by our network. Then, we look at the file. Our filters? The presentation of the entrepreneur. We check that his email is concise and complete, the way he expresses himself, if he has the codes, what he has achieved, etc. Only then comes the meeting part.
The entrepreneur has 15 minutes: 1 minute to make a good impression, 4 to demonstrate his credibility and 10 to convince. It's a bit like a date: you have to make a good impression and conclude.
What convinces you?
The key question is to ask yourself if the team is credible in its market. The signals that should alert you: verbose entrepreneurs, who don't listen, don't question themselves, do poor introspection regarding the mistakes they've made or believe they've thought of everything.
In interviews, I start with questions that I know the entrepreneur has the answer to, such as "how did you meet the co-founders?" I then move on to those that he or she doesn't necessarily have the answers to: "how are you going to stand out?", "what key growth stages do you think you'll reach?"... I expect founders to have a vision, an ability to learn and execute. We need entrepreneurs who know how to surround themselves externally and internally.
"A good business angel is someone who always enjoys talking to entrepreneurs"
You do one to two deals per week. Do you have time to meet with entrepreneurs and then help those you finance?
Yes. There is no such thing as an overloaded investor. Sometimes we can have time-consuming problems, but setting aside time for entrepreneurs is our job. We tell everyone: we are not proactive. On the other hand, we are systematically there when they call us. We have never failed in this task. For example, Marie Outtier did not ask us for anything in the three years following our investment in her SaaS company Aiden.ai. But when she wanted to sell, I was able to quickly put her in touch with the right person to get a good offer. There are always people who complain. But I believe that there are those who move forward and those who find excuses. That's how we sort things out.
What is a good business angel?
This is someone who always enjoys talking to entrepreneurs. Being an entrepreneur or investor is fashionable. Some people work in this sector for this reason. I am in it by vocation. I can't see myself doing anything else! When you are passionate, you transmit energy and even power. A good business angel is also someone who knows how to ask the right questions, does not judge, does not believe that there is only one way to do things. They must take a step back and know when to give their opinion while staying in their place. Finally, a good investor must make good deals, otherwise it is problematic!
You've written a book, you publish newsletters, you answer interviews, and you're present on social networks, all while being very direct. Is that a bit of a trademark?
I communicate a lot, and I like it. It's a way of introspecting on the things I've seen and learned. For some time now, I've been taking voice notes after my interviews with entrepreneurs. I transcribe them on Mistral, synthesize them and share them. As for my style, it's indeed direct. I say what I think, and I think what I say. I don't think that's a problem as long as we act with good intentions.
Entrepreneur or Investor: Who is Harder to Manage?
Investors, because they often give themselves an importance or a place that they do not have. They have the checkbook, therefore the power, and sometimes abuse it. Some entrepreneurs who have sought power can also be like that, but at least they have earned it.
What is the percentage of good deals that makes a VC profitable?
"With 20% of successful deals, we can make 3 to 4 times the initial investment on the entire portfolio"
Fundraisings are fewer and smaller than they were a few years ago. What does this change for you? Has profitability really become the alpha and omega to the detriment of dazzling growth?
We make more deals out of conviction than out of FOMO (editor's note: Fear Of Missing Something, i.e. being here out of fear of missing out on a good deal). Previously, we had to bet on every deal that came along. The context also makes entrepreneurs more responsible. When you have a lot of cash, you pay less attention to what you spend. It's true that some deals turn out to be less expensive. But very good files remain expensive. Furthermore, startups were growing regardless of the cost. Today, profitability is more important. In reality, what should take precedence is good business sense. You can invest money that doesn't bring in money right away, but you have to do it in a healthy way.
What kind of boss is Xavier Niel?
Xavier Niel is the kind of boss who trusts to the extreme. But you have to live up to this trust and not abuse it. He is also a nice person. Although he is tough in negotiations, he is consensual, he likes to spend quality time with people and does not appreciate conflict. He is competent, connected permanently and answers more than 1,000 emails per day. He expects his colleagues to be efficient on their subjects. He is also tolerant and demanding. He is generous but he controls his finances in business. Like all the great bosses of this world, he is paradoxical.
How many successful deals and how many failed deals make you profitable?
With 20% successful deals and 80% waste, we can make 3 to 4 times the initial investment on the entire portfolio.
Are the French better placed than before to catch up with the Americans in tech?
This question can be answered with either sarcasm or romanticism. The French are not consumerists or inveterate workers. They do what they like without hurting themselves. French employers may have the same energy and ambitions as Americans, but they have difficulty finding employees who want to give as much as they do. The French benefit from financial and social safety nets that Americans do not have. It is a problem that has no solution.
We are revolutionary romantics. We do not live to work. Ambitious French entrepreneurs must multiply their efforts to surround themselves with the right people. The problem is therefore not linked to the attractiveness of France, to taxation or to talent, it is just that we do not want to compete.
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