SUCCESSFUL FRENCH VC SHARES SECRET SAUCE, INTERVIEW WITH REZA MALEKZADEH, PARTNER PARTECH PARTNERS
Do you pray for exits or just spray and pray?
Neither! We work with our entrepreneurs and companies. We try to help them as best we can and as they need it. It’s not a gambling bet.
How do you cold call a VC? How important is to come from another founder or entrepreneur network?
There is a commended value in the network and an implied chain of trust when someone comes to a trusted connection. I do not believe we have ever done a deal through a cold reach out. Generally, because the investment is more than just money, it is important to reach the right person for the right project. And you can best get that from people you know and are willing to endorse you by passing along your information.
How do you see the world differently as a French man in Silicon Valley? Does being French change your perspective as an investor or a founder?
Silicon Valley brings together an amazing set of entrepreneurs from a lot of different origins. Being a foreigner in Silicon Valley is just part of that overall environment. You know and understand well that people are going to all have very different backgrounds and cultures but they are here for the same reason, developing and bringing to success the project they believe in.
What can Silicon Valley learn from the European entrepreneur?
I think European entrepreneurs tend to be more fiscally responsible. Access to vast amounts of capital is much easier in Silicon Valley and therefore entrepreneurs in Europe learn to do more with less. European entrepreneurs with high ambition also know firsthand that each of their local market is relatively small. As a result they will need to think internationally much earlier in their development cycle.
Is Silicon Valley the only real unicorn “farm” for high tech companies? What’s your experience as a founder and a VC?
I do not believe Silicon Valley is the only place to build a unicorn. Looking around you see that there are more and more large success stories coming from other countries. Clearly Silicon Valley still has the lion share but there is a growing number of large companies coming from various other geographies. However, Silicon Valley still has a level of experience and expertise that other geographies I don’t have yet. If you are looking to scale the business it is much easier to find people who have lived through a growth experiences in Silicon Valley and elsewhere there are much fewer talents who have been through an IPO in a given geo outside of Silicon Valley than within Silicon Valley.
Can you tell us something unique about the French startup ecosystem? Can a drop out from the grand ecole raise money in France for a startup?
The French Ecosystem has been growing and maturing pretty dramatically. France has a great education system that helps build a vast pool of talent. There are a number of factors that the French are particularly good at and mathematics one of them. That is why you see a lot of French engineers in artificial intelligence and machine learning fields. Additionally, the French system allows it for a number of public aid as you start projects. You can actually have access to some non-dilutive funding for your project and allow you to get to a certain level before having to do a more traditional equity raise.
What is the reality vs expectations of being a VC? What is the funniest part of being a VC?
For me the biggest adjustment was going from an operating role to more of a coaching role. You have to realize that you are no longer at the helm of the company and are there to support the entrepreneur more than anything else. After being in an operating role for 20 years, it takes somewhat of an adjustment, but it is also very rewarding to participate in these entrepreneurial journeys from the sidelines. It is great to see these projects mature and be successful knowing that you are only one small piece of the support system around them.
What is the toughest part of being a VC? Loosing money? Roller coaster of portfolio company success and failure? Telling most people “no”?
For me the toughest part is back to the previous one: adjusting to the fact that you are no longer an operational person. The ups and downs of companies are just normal part of life. No one is on the linear trajectory and the path to success will contain down portions as well.
What makes Partech special as a VC? How do you compete for deals?
We are an international fund with the true transatlantic DNA. I believe that it helps us have a great understanding and perspective for companies that are truly international. For example, as European companies look to the US market, we can help them cross the pond and adjust their go to market to the American market. The market is vast and the opportunities are huge but it is very different from their European home market. Of course, additionally, each of us partners also brings their unique background to the table. I truly believe that the venture process is primarily a human way and great entrepreneurs don’t just look for money they also want people around the table that can help them. So we will try to focus on the deals where each of our backgrounds can be a competitive advantage.
What makes a company investable by Partech?
Regardless of the stage of the company, we primarily look at the team. I’m a big believer that you can change your product, your pricing, your positioning, etc. but people are what will take the project through. After that depending on the stage of the company (seed, series A, B or later) we will look at a variety of other things around the market opportunity, the technology, the product-market fit, etc.
