Falk Haurenherm

Discussing with many VCs in the past months has taught me a lot. Especially on differences between US and European investors. Everybody knows that investors are different on the other side of the Atlantic (works both ways). As European, we’re fully aware the market size is bigger, growth can be quicker, the average amount of $ raised by round is higher, investors are more willing to take risk. But theses considerations are kind of obvious. It gets more interesting when we dive in the process of US and European VC. At first they seem similar. Sourcing, 1st call, little bit of research, 2nd call, few other calls if needed, investment committee. And so on. But if we look carefully, the way of sourcing is super different: ➡️ European VC tend to focus on the country they’re based in so the potential pool of startup is pretty small. Consequence : most VC automate their sourcing to get a full coverage of every single early stage start-up that is created. It’s a lot of work and a lot of companies but it’s still doable. After all, France is only a 67M people country. ➡️ The way of sourcing in the US is very different. Too many companies are created each day. It’s impossible to source and screen every new deal. So sourcing in the US network based. The network of a VC (generally the network of the partners) act as proxy, filtering the good deals and allowing access to them. So no need for automation, but a big need to have a good network. To sum it up European VC tend to have more automated sourcing process (if it’s still not your case, we’re here to help) while US VCs, especially the small early stage ones, tend to have a more inbound and network based approach. For us it was a key learning because conceiving tools require to know how your client works. So a tool for sourcing in Europe could be useless in the US.

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2 days ago, I collected 52 answers about how startup studios attract founders. The top 4 problems mentioned while answering an open question: 1. Hard to find the “true founder material” 2. Studio culture & values fit 3. Hard to engage full-time with founders – lack of founder’s focus 4. Small network to attract founders – either the need to hire outside your industry/niche or inside it I think the answer to the first 3 problems lies in these statistics: – Only 10% of studios (5 answers) work exclusively with second-time founders, those who have tried to build their own companies but failed. 90% are ready to work with first-time founders. It’s usually hard to expect (or at least) test grit, perseverance, high level of commitment & risk tolerance in first-time founders. There are two ways: 1. Either you find ways to attract experienced entrepreneurs despite adverse selection (founders will be inclined to launch their own companies independently if a studio can’t provide a no-brainer deal) or 2. You turn the weakness (first-time founders) into your strength, allowing current full-time employees to test new business ideas with your support without the risk of losing jobs and becoming full-time co-founders only after validation and substantial revenue. DQventures is a good example. Suppose you’ve decided to focus on second-time founders. How will you seek them? Grant Morgan suggested one interesting idea for our (potential) future marketplace of venture studios & founders: “To target founders of companies that shut down or got acqui-hired recently. Founders that haven't been successful, but who have lived the startup lifecycle are great in our opinion, and there are / will be more of them than ever over the next couple of years following ZIRP (zero interest rate policy) environment where many companies raised too much and/or at valuations that their companies will never grow into, but the experience these founders have is very valuable, and they're often hungrier having tasted some level of success already.” – 73% of studios consider partnering remotely with candidates from their country. 52% consider co-founders in other countries as well. Yesterday, while discussing with my partner ideas around the marketplace, we thought that as our first MVP, there could be a job fair online conference where some studios will pitch to potential co-founders. 1. Do you think it’s a good idea? 2. Would you pitch to attract candidates (for free or for the success fee? Let me know in the comments, and if we decide to organize the event, I will invite you.

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