Primarily known as a pioneering figure of « French Tech », Bernard Liautaud is today a well-respected investor who just happens to run one the most performing VCs in the world. Looking back over his recent promotion and his responsibilities within Balderton Capital, he also touches on the French Start-Up ecosystem.
Leaders League. First of all, congratulations on your promotion as first managing partner of Balderton Capital. A Frenchman at the top of foreign company is a pretty rare situation, isn't it?
Bernard Liautaud. I am responsible for Balderton Capital's development but I won't be the only member of the firm to decide whether we should invest in a company or not. In practice, there are five managing partners and choosing if a start-up should enter or exit our portfolio is always a collective process. Likewise, the profits we make are equally distributed between each partner, irrespective of seniority or involvement level in the closing of a transaction. Naturally, this promotion will give me more weight when it comes to steering the global strategy of Balderton, the daily business we have, and the fundraising of our next vehicles.
Leaders League. What is the roadmap to get Balderton Capital to rise up in the worldwide hierarchy of venture capital?
B. L. We will continue to follow out our overall ambition which is aimed at investing more towards the European early-stage phase. Our front door will stay the Series A financing round. For the next rounds, we won't hesitate to adjust our equity stake although we won't throw money at overvalued companies.
Leaders League. You are one of the pioneering figures of French Tech, but you seem to feel comfortable in your new financial role. Don't you have any form of nostalgia when looking at entrepreneurship?
B. L. Being an investor or an entrepreneur are not the same because they have different goals. One looks at the profitabilty/liquidity of a business whereas the other is interested in building a key player in its field of activities. I had great time building businesses but I decided to join Balderton Capital eight years ago. Actually, I still have an interest in a personal company I founded, Dashlane (providing safety solutions for passwords), where I serve as a board member and a shareholder. From the financial side, the intellectual journey is exciting : you must keep up to date with the latest changes of a wide range of jobs (software, mobility, safety, consumer, social networks...). Despite what some entrepreneurs think, being a venturist is a hard task. You may not have to be in two places at once for your company, but you are certainly in one place for dozens of firms...
Leaders League. Regarding your capacities to invest, how much have you had to put in so far? How do you plan to allocate these resources?
B. L. We have to invest the last third of our fund 5, which received a bit more than $300m. Its predecessor, with $480m, is still very active. Globally, we netted about $2.3bn since the launch of our first vehicle. On average, we put between $12m and $15m into each company we support.
Leaders League. As an entrepreneur at Business Objects, you accurately predicted the future. What type of thriving business would you create today?
B. L. If I were to set up a company, it would be about business software. To start with, I know this sector very well and one should always be close to the structure one wants to establish. Secondly, I think business software has a lot of value to create. Users are very frustrated by the lack of technological improvements this activity provided in the past, especially in comparison to the quick advancement of smartphone and home applications.
Leaders League. Prodigy Finance created quite a buzz. Where do you see its potential?
B. L. It's a fintech which provides financial support to international students enrolled in prestigious schools or universities in the USA or in Europe. Today, this part of the population does not really have full access to loans whereas their potential capacity to make reimbursements is very high.
Leaders League. French Tech made more than $1bn in 2015. Do you believe in some sort of worldwide harmonisation regarding start-up growth or will the USA always have a financing head start?
B. L. What some people may call the "imbalance" between the solutions American start-ups benefit from, as opposed to those European ones enjoy, will disappear. In our region, entrepreneurs are more and more ambitious. Yesterday, the typical French business founder settled for a light roundtable and an exit at €100m. Today, they want to build a multi-billion euro company. And this vision is supported by investors that have deeper pockets to help them make it.