EUVC Newsletter | 8.5.23
Unlocking France, announcing your fund on national TV & sharing carry with LPs that roll their sleeves up, Maslow’s Hierarchy of Venture Fund Investing, Participate in European Women in VC Report 2023
Welcome to the GP/LP newsletter of Europe🙏
Firstly a heartfelt welcome to the 236 newly subscribed venturers who have joined since our last post! If you haven’t yet, join the 9,039 LPs, VCs & Angels that do or share it with your besties🤗
Table of Contents
Open in browser for clickable ToC 👆
Unlocking France, announcing your fund on national TV & sharing carry with LPs that roll their sleeves up. An eu.vc-episode w/ Augustin Sayer from Ovni
European Women in VC Report 2023 Survey - please do participate! 📥
Latitude59 - don’t miss out!
With 1.3M people, Estonia barely beats Prague with the size of its population. But when it comes to startups, they know what they’re doing! Their tight-knit IT-savvy community just unleashed its tenth unicorn into the world.
In other words, don’t miss out 👊
SuperVenture LP Series
See you at the after-party?
Let’s get you in the mood for this newsletter:
Unlocking France from a UFO
Interview with Augustin Sayer, founder of Ovni 🛸
A couple of weeks ago, we welcomed Augustin Sayer, founding GP of OVNI Capital on the pod. I’m a big supporter of what Augustin is building and loved the conversation, so wanted to share some key highlights with you 👀
“Why no LP will get excited by your 2-3x net”
In fact, I owe Augustin a thank you as this quote inspired me to say that venture funding isn’t about 3x or 5x, but YOUx. Something which you may have noticed I’ve started saying a bit too often lately 🙈
I don't think anyone is going to be super excited about this. If someone is like: "Wow, this sounds like the best deal I've heard all year" then he's lying. I think what 80% of investors want when they're investing in a fund is access to a community. When you're talking about a seed fund, it's access to tech, access to entrepreneurs, access to younger people, and that we're going to challenge them on new innovation, interesting innovations, disruptive innovations for their own businesses"
Another thing that I wanna share is Augustin’s thinking around marketing, ‘cos on February 6, Augustin went on BFM Business (a national French TV station) to launch Ovni in the best broadcasting hours. So I asked him:
How did you get to announce Ovni on national TV?
Who did we hire for our PR? No one. We did everything ourselves. We are a startup, we're not going to spend three or four or five or six grand for someone to set up interviews, right? So what I did was, I emailed the people I know at BFM, ad I said, "Look, we're announcing February Sixth. Can I go on February six and 9 p.m.?" And they said: "Look, you've been available for us for five years, every month. Sure, come on February Sixth."
So what did he say? Check it out below 👇
And finally, Augustin is doing something pretty interesting - again, underlining that he’s serious about building community:
On reserving 20% carried interest for LPs that roll up their sleeves
"My co-founder and I said, "Look, we're not going to be on the board. We're available 24 seven on WhatsApp by email, by phone number, anything" Instead, we're going to put on the board an LP of ours who had built a similar business, exported it to the US and sold it six years after inception for more than 100 million to a New York based business. We're going to put him on the board. And we're telling the company: do not compensate this guy financially. You don't have to pay the burden of having this guy. But we're going to give some carried interest to this person. So we're incentivizing not just on this company, but on the entire fund, and as an entrepreneur, he thanks us for this. He feels like he's giving back to someone who's 20 years younger and he's loving it. And we've reserved 20% of carried interest in our fund specifically for LPs who are going to take board seats in every single investment we make.
Needless to say, we’re super excited for this one. Take a listen to the full episode below 👇
Things were getting too serious. Know this feeling? 👇
Maslow’s Hierarchy of Venture Fund Investing
As said, I’m overusing my freshly-coined concept of YOUx in venture fund investing. But just to restate: it’s not about 3x or 5x, but YOUx.
In fact, it is not rare that I meet a family who flat out says:
“yeah, that GP probably isn’t going to give me the returns I was hoping for, but I’m probably gonna recommit anyway.”
Why does this happen?
On our Super Angel podcast, one of our guests recently said about his startup investing that whatever the financial outcome of any investment, he makes sure that he’ll walk away richer.
Did he learn something new that made him grow? Did he meet new people he otherwise wouldn’t have? These things are equally important as the financial upside.
Of course, saying that returns are secondary would be taking the argument too far. Instead, I propose considering it as a hierarchy of needs:
In the bottom two are terms and returns. Just as sleep, food and safety cannot be disregarded in the pursuit of the higher needs, so can’t terms and returns.
You shouldn’t be doing a fund if you can’t deliver on fundamentals. But they’re hygienic factors.
The next two levels up are insights and access. Insights can come in many different forms and so can access. As a GP, I think it’s worthwhile thinking about how you can deliver on these to LPs. As an LP, I think it’s worthwhile not only thinking about these but also diligencing for them. There are some funds that do this very well, there are some that don’t. There are some to whom you’ll be an important LP and who’ll make sure to fulfill your higher needs to keep you close. And there are some to whom you’re not.
And finally, in the top of the pyramid are relationships. Foundationally, for any relationship of meaning, is trust. And for trust to be built is commmunication. Do you have good lines of communication - and lines that you enjoy and take value from using? Obviously, you’re not whatsapp’ing daily, these relationships are long term and for that reason, frequency is not the issue. But intensity and deepness of the conversation when it occurs is.
The GPs that sweep my legs away at our interactions, be they frequent during our DD process or quarterly after the investment is made, that’s what matters. Do they leave me smarter and in a better place?
Join us in our LP community if you’re also looking to partner with funds that have aced the top of Maslow’s Hiearchy of Venture Fund Investing.
European Women in VC Report 2023 Survey - please do participate! 📥
Although Venture Capital in Europe did not achieve such spectacular growth as in 2021, it still grew significantly in 2022. However, structural issues remain and capital distribution balance between genders has not changed. Women and ethnic minorities are still underrepresented and struggle to raise money.
IDC in collaboration with European Women in Venture Capital (EWVC) and other mission-aligned partners, is exploring women’s presence in the European VC ecosystem and the impact diversity can have on venture capital funds' performance, as a continuation of the research efforts conducted in 2022.
We kindly ask all Fund Managers to fill in the survey!
To thank you for your participation, we will send you the final study, highlighting the key results of the research to be freely distributed among your partners.
As part of this research exercise, we would like to invite you to complete a short 15-minute survey. The data will be processed anonymously and on an aggregated level only.