Don’t think you’ve won. Don’t take anything for granted.
With Xavier Niel, we have two easily identifiable entities : one is Kima Ventures, it’s only Xavier’s money and we invest $150k checks in about 100 companies per year. It’s a portfolio of 1200 startups. The other one is New Wave, it’s Xavier & Friends and with my other partner Pia we invest between 500k and 4M in about 7 companies per year. The difference between the two is very simple. Kima Ventures invest in teams with quite a lot of uncertainty in regards with ambition, founder-market fit, product-market fit. We love taking those risks, we’re easy to deal with and we’re super reactive.
On the other side, New Wave invest in repeat founders and post product-market fit first time entrepreneurs. We’re high conviction investors and we have a very pro-active approach. we help founders find their first customers, hire their first employees, build the right equity story, trigger the right, sometimes challenging discussions, support them in difficult times.
When we closed the first vintage of New Wave with Pia in December 2020, our investors only included successful entrepreneurs and venture capitalists such as Xavier Niel, Philippe Lafont, Victoria Van Lennep, Peter Fenton, Jerry Murdock, Tony Fadell, Yuri Milner & Tom Stafford, Antoine Martin, Alexandre Yazdi, Laurent Ritter, Luca Ascani just to mention a few of them, the others will hopefully pardon me... As we’re wrapping up the first close of our second vintage, New Wave II, we were introduced to a handful of institutional investors for our fund.
During those discussions, I understood that outside our first circle of connections, people genuinely didn’t know what we were doing, how we were doing it, and why they should back us. We had to be more intelligible, thorough, concrete about what we do. Let me give you three consecutive example that arise when we talk with potential investors.
When we mention the name of companies we helped like Sorare, Sqreen and the previous companies of the repeat founders we back such as Docker or Zenly, our investors who are themselves fund managers or entrepreneurs get immediately excited by our network of founders whether they are promoters of New Wave or form the next generation of companies we will fund at some point. Institutional investors are genuinely less knowledgeable about them and consequently less excited about what we feel is quite a force in our industry. We must walk them through the stories of those companies first.
With our investors we often talk about what we’ve done well and where we need to improve from a decision making standpoint, from an economical perspective and obviously from a competitive angle. It’s easy to say that we’re a functional partnership with a clear, honest, constructive decision making process, that we work towards increasing our ownership in deals. But when it comes to our competitive advantage, it’s again easy with founders and other venture capitalists because we’ve worked together, they’ve talked with other entrepreneurs, they know what we bring on the table, they know our touch, the subtleties of our approach. It’s not true with institutional investors who demand to understand clearly why we win.
Finally, when it comes to helping entrepreneurs, our wall of fame both at Kima and New Wave usually speak for itself. The ones who have managed to leverage our value got served and rave about it :) when it comes to institutional investors, they ask how we support entrepreneurs, concretely. Again, we help founders find their first customers, hire their first employees, build the right equity story, trigger the right, sometimes challenging discussions, support them in difficult times. But it’s not just about that, it’s about doing it in a timely manner, about finding the right tone and the right angle, it’s about intelligibility and style as well. Here again, institutional investors demand clear examples, if not to understand our full process.
I’m writing this down today because it’s an important lesson. Sometimes you feel like you are on the spot, you’re part of a group who knows you. People don’t question you anymore, and as a consequence, you loose the details of your narrative and how important it is to make yourself clear, intelligible, concrete when you speak with people who aren’t part of your inner circle.
Every single one of us ends up taking certain things for granted. One of my close relative really killed it during the written exams to join the most prestigious french business schools in France. The oral exam should have been a formality. Yet he failed. Why ? Because he took it for granted, he didn’t make the necessary effort with the jury and acted like his current rank was speaking for itself.
I always say that you start losing when you think you’ve won. Well, if you take for granted that people should know or understand certain things, you might just lose an opportunity to win their attention and respect because to them you are maybe just a loose canon who can’t articulate clearly why they should be considered.
Don’t think you’ve won.
Don’t take anything for granted.
Make yourself clear, detailed, intelligible.