Philippe has been Co-Founder of GSI (that became n° 1 in Europe in HR Outsourcing with 500M€ in revenues and was sold to ADP for 27 times the original LBO valuation 8 years thereafter) and served as COO of Alcatel for 6 years (after managing the mega merger of Alcatel France with ITT telecommunications). Retired at 62, he became a Business Angel and invested in 22 start-ups and 5 Venture Funds (he has been n°1 French BAN for 5 years). Now Philippe is President of the Paris Business Angels and President of BAE (Business Angels of Europe, the Confederation of European Federations of Business Angels).
Below you can find our Q&A.
Philippe, how do you see the startup environment in Europe? Which countries/regions are more active?
I see a high growth of the number of start-ups everywhere in Europe, specifically in the UK, Germany and France. The Italian start up market environment seems now to be much more attractive since the new regulations passed by the government at the beginning of this year.
What’s the impact of the current economic situation on the venture capital and early stage investments?
The debt restructuring policies in all European countries have a major negative impact on the venture capital market: fund raising has become very difficult (we had a 50% decrease in France this year), and tax incentives have been reduced in France, while in other countries still remain favourable (UK and Germany).
How do you evaluate the crowdfunding phenomena? How is going to affect the venture capital industry?
Crowdfunding is going to develop everywhere, since it is perceived as a way for private individuals to invest directly in the «real» ecenomy after years of bad results from the intermediated investments. But the equity part of crowdfunding is in fact quite a small part of the total, and regulators are not going to accept a total liberalization of the equity investing sector, due to the risk involved in this kind of investments. Business Angels should stay apart from this business, but ready to develop co-investments with electronic crowdfunding platforms.
What are in your experience the most frequent mistakes startups do?
Too many startups are of the «me too» type, not really differentiating from others.
And the most frequent mistakes angel investors do?
Many angel investors are reacting too quickly to a new proposal, and are not spending enough time and effort on due diligence, particularly on the human capital of the start-up.
What are the most difficult things to be evaluated while investing in early stage startups?
For sure the quality of the founding team . Most business plans are not going to be achieved and the founders should be able to pivot (business plan and business model), when there is still enough time to do it.
What’s the best financial return you got investing in startups? And the best deal ever? And the worst?
I got 5 times in 2 years. The best deal was in cleantech, where I went through an IPO after 2 years (with no revenue). I have plenty of worst deals: 8 of my 22 investments are already been written-off, and some others are going to be in the near future. Exits are still far ahead for some others.
What’s your main message you’d like to convey to angel and seed investors?
Spend more time with the team. If you think that the founders are just looking for your money (and not for your coaching), let them go.
You can meet Philippe in Milan @ Mind the Bridge Angel Investing Global Forum (Milan, November 8-9, 2013).