On December 10th, we hosted our latest webinar entitled ‘Fundraising, from Business Angels to VCs: a must?’ as part of our Partech Shake & Learn series. We had the opportunity to hear from three incredible speakers who shared their expert insight and experience: François Ramin, Associate at Angelsquare, Emilie Daversin, founder of Vo2 Group, and Lucas Liabeuf, Seed Fund Associate at Partech. The discussion was mediated by Sarah Huet, Managing Director of Partech Shaker. The three guests gave us an excellent look into the state of fundraising in 2020 and shared their best practices for both investing and founders looking to raise funds for their startups.
Sarah launched the discussion by asking whether it has now become more difficult to fundraise because of the pandemic. Lucas kicked us off by arguing that in the current climate, there has never been a better time to fundraise despite the various lockdown restrictions in place across the world. He highlighted the shift towards online communication and notably the infamous Zoom meetings which allow contact between investors and entrepreneurs to happen much quicker. What is more, it also allows for a more global investment scope and he believes this trend is very much here to stay. François added that during a time of crisis, it is best to be an opportunist as it gives you time to build up your network and identify potential investors. Emilie, speaking from experience as a founder, underlined that although it gives you more time to create projects, it has harder to create a team and that is why it is necessary to have a clear vision when you are looking to fundraise.
The debate then moved to the question of investing and how investors choose the companies they decide to back. Lucas explained the seed fund strategy and what the team envisage for their investments. He outlined how they look for small ticket investments as primary investors after analyzing the chosen company’s team, market positioning, and vision to decide whether they can become leaders across all fields. They will then watch them grow and reinvest in the hope that 5 years down the line, the company can reach €1 Billion in funding! Emilie interjected to ask the very pertinent question to François and Lucas of what is a good success rate of their investments? François explained that at Angelsquare they might expect 1 or 2 out of 10 to be proper success stories which will refinance the losses from the other investments. Lucas corroborated this using the example of the €100 Million Partech Entrepreneur III fund which will have 30-40 companies in it, of which they would expect 3 or 4 to grow so quickly they also return the money from the other investments.
Sarah turned the conversation back towards the startups and asked the question what you should look for in potential investors. Emilie emphasized the need to pick investors wisely and identify those who will give your business the best training possible and maintain regular communication. However, she stressed the point that the entrepreneurs should still be held responsible for the business even after a round of fundraising. The importance of managing your company and your employees does not decrease in the slightest despite the high of a successful fundraising round. She spoke from experience when offering her advice to not rush into fundraising. She used the example of herself by highlighting how she waited to raise funds to scale up her business until she knew exactly how she wanted to do so. François underpinned the process of Due Diligence on your investors to perhaps identify someone who knows the sector well and has raised significant money with successful investments. He went on to say it is important to know why they have invested in you and what their mission is for the growth of your company, this helps you map out your potential future with the investors.
Another important step in fundraising is the process of contacting founders and when is the best time to do this. Lucas took the lead on this topic, by affirming that the earlier the better for the first point of contact. That is to say, long before the deal becomes concrete as it shows more interest and allows the investor to give the entrepreneurs important potential feedback on the state of the market they are looking to break. François and Lucas both spoke about the importance of identifying the right person to lead the fundraising process. They accentuated the idea that it should not always be the CEO as this might not be his or her area of expertise and first impressions for investors are of paramount importance! The three speakers spoke collectively of how it is necessary to build up a personal relationship with your investors and not simply a professional one. This allows for a better mutual understanding of what the other is looking for and makes the working relationship that much more profitable.
A big thank you must go to Sarah and our 3 speakers who led such an engaging discussion. The questions from the floor at the end encapsulated the stimulating debate that was created by our panel. They gave us invaluable insight and spoke from their own personal experience to make their advice resonate with all our participants.
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