Partech Ventures: sourcing and attracting the top start-ups
To keep step with tomorrow’s digital game changers, Partech Ventures identifies and tracks the most promising companies from the seed stage through to growth capital raising. Co-Managing Partner Jean-Marc Patouillaud tells us more about Partech’s sourcing approach.“More than a strategy – it’s a state of mind”
As Jean-Marc sees it, sourcing does not follow a defined strategy: “It’s more than a job – it’s a state of mind. We are constantly, sometimes even unconsciously, picking up market signals as we keep our ears open for new opportunities. Research into one firm might easily open up other doors and new pathways”. Partech Ventures can draw on several stand-out qualities that support its sourcing activities.
For one thing, its international reputation ensures spontaneous deal flow. Says Jean-Marc: “Partech Ventures boasts years of experience and is the only truly transatlantic European fund operating today. As a result, we are regularly approached with proposals, from San Francisco to Helsinki”.
Since its inception, the fund has built up a network of business angels, tech and marketing experts, entrepreneurs and major industrial and service groups spanning more than 20 regions. This network is another important factor in the number and quality of new deals proposed to the fund. “With 130 start-ups in our portfolio, 90 entrepreneurs or former entrepreneurs invested in our funds and over 25 corporate partners, we get lots of proposals from within the Partech Ventures community, including up to five a year from one entrepreneur that we work with. Partners such as Cisco, Nokia, L’Oréal and Accenture also regularly propose major opportunities.” Aside from the sheer number of deals that it yields, this approach saves Partech Ventures precious vetting time. As Jean-Marc explains: “Having due diligence performed by the experts from our network boosts our speed fivefold”.
It goes without saying that the fund is also constantly on the look-out to widen its spectrum and spot new opportunities. “At trade fairs, tech conferences and during our daily meetings, we are always watching for new trends and companies that can disrupt their market.” With this in mind, the members of the investment team make a point of showing up at key international gatherings, such as the Web Summit, the Noah Conferences, TechCrunch events and the Las Vegas CES. Jean-Marc sums it up like this: “Start-ups know who we are and how to get hold of us, but we also need to reach out to them before they come knocking on our door”.
Delivering genuine operational value added
Partech Ventures then has the job of convincing these companies that it is the right fund to support them. “Competition is stiff, especially in the venture segment. Beyond financing, companies are looking for funds that offer genuine value added”, comments Jean-Marc.
Partech Ventures can point to success stories that, together, offer a compelling argument. “One of Partech’s big strengths is our track record. We have 21 initial public offerings to our name, as well as 50 acquisitions by industry or service firms involving enterprise values of USD 100 million and up”, says Jean-Marc.
Exits can count on Partech’s international network, with most of them involving US firms. “We are present in North America, where European companies are keen to break in, particularly in the software sector. We have had a team in San Francisco since the fund was first started in 1982. By leveraging that presence and our local network, we can help firms get established and onto the radar of potential buyers.”
To ensure that sourcing leads to collaboration, Jean-Marc stresses another key point, namely the quality of the relationship between entrepreneurs and fund partners. “There needs to be real intellectual and personal resonance, mutual understanding and empathy. Shared trust is vital to ensuring that the right decisions are taken, together.”
To conclude, Jean-Marc offers this final piece of advice: “Don’t pick Partech Ventures if you want to work with a team that will always uphold the consensus. Our role as investor and director is to help firms to ask questions of themselves and push their own boundaries, even when things are going well”.