Herve Lebret: Difference in European & US Venture Capitalists

Video interview with Hervé Lebret, Manager Innogrants @ EPFL (the Swiss Federal Institute of Technology in Lausanne), a program supporting startup creation

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Video interview with Hervé Lebret.  Hervé manages the Innogrants @ EPFL (the Swiss Federal Institute of Technology in Lausanne), a program supporting startup creation. The program includes grants to entrepreneurs and conferences where role models share their entrepreneurial experience with students and researchers. From 1997 to 2004, he was with Index Ventures, the pan-European venture capital firm which invested in Skype, mysql, Virata, Addex, Genmab. He began his career in academia in electrical engineering and applied mathematics at ENSTA and ONERA (Paris). He is also the author of the book “Start-Up, what we may still learn from Silicon Valley” . Hervé Lebret is a graduate of Ecole Polytechnique (Paris) and Stanford University. He holds a PhD in Electrical Engineering from Université de Rennes. You can find Herve @ his blog & on Twitter @hlebret

Transcript follows & video above

  • I understand you were a venture capitalist in the past & that you still do seed investments through the University. Could you tell me a little bit about your history & what brought you to this point?

Well I’ll try to do that in 3 minutes. My background is in engineering. I studied in France, I studied at Stanford University. Basically there is a big difference between the European culture where we were just studying & Stanford University where I discovered all my classmates wanted to do startups. This pushed me to go further in the direction of innovation. So I moved from academic research to venture capital in 1997. I stayed with Index Ventures till 2003. Really I was interested in trying to understand why Europe was so far behind Silicon Valley. Then I moved to a University EPFL which is a Swiss Institute of Technology in Lausaunne. I’m helping students to become entrepreneurs. So I have a seed fund. I have spent about $4M in the last 5 years. I give about $100,000 per project. I have funded about 40 projects in the last 5 years. These are not companies yet, but 20 companies were created out of the 40 projects. So thats the background.

  • What percentage of women do you get involved with, as regards funding startups?

I would say about 10%. Out of the 40 projects, 3 women were funded. And 10% is probably the number of women you have in engineering at EFPL. My experience as a former student in engineering, you have about 10% of women in science & technology, business management & probably as entrepreneurs.

  • Have you noted differences with women entrepreneurs in how they pitch & build businesses?

Well that’s a difficult question. I would have to answer that I believe there are no differences. They have the same level of energy. I hear very many different analyses about why they are different. I am not convinced about that. I think society is making women different, they put them in a different position because of families, right. The men want their wives to take care of the house or of the kids but once you’ve forgotten about that, you discover they are very similar. I have a daughter who is 15 years old, she is studying science. When I see her personality, I would have the feeling that she could be very similar to a man.

Fantastic & its obviously why you are contributing to projects like this, because you want your daughter to have a different playing field, right?

I hope so, I hope so.

  • Cindy Gallop, Founder of IfWeRanTheWorld, said in a recent interview: ‘VCs fund in their own image: white, male. The cycle is self-perpetuating, so (predominantly male) VCs have a preconceived notion in their heads of what they think constitutes the kind of entrepreneur to back. John Doerr apparently said, ‘If you’re a white, under30, tech geek with no social life and a Harvard/Stanford dropout, line up for VC money.’ He didn’t say ‘male,’ but he might as well have. If it had been a 17-year-old Russian girl who came up with ChatRoulette would there have been as much interest in funding whatever she might do next?’  What is your take on this & if this is happening how can women startups find an opening in this culture particularly in Europe?

Well it’s a tough comment that you’re making but it has a lot of truth. I was thinking about the movie about facebook, right. When you look at the women in the movie, they don’t have a very nice role, right. Zuckerburg except his former girlfriend was in a very nice position. Yes you may be right, we may really not be helping. I was also thinking how many women are in venture capital? There’s Ann Winblad, Esther Dyson. When I was at Index, there were women. There were 2 or 3 out of 20 people. But you’re right, we’re always copying our past models, right. In Europe is it different than the US, I am not sure?

  • Cindy also says: ‘I think not as many women as men actively seek VC money because they’re not as tapped into the boy’s network as male entrepreneurs are. Young male entrepreneurs can very easily become the flavor of the month and get introduced around from one VC to another — get the perception going that they’re ‘hot’ and get their funding. It doesn’t happen for women that way.’ Do you think that networking with Venture Capitalists is harder for women entrepreneurs in Europe?

It might be, it might be. It’s a network, it’s a club. Women don’t belong to the club. But it would be similar for any minority, right, even students in engineering with no business background are shyer. If you think about any kind of minority it would be the same. In fact let me read a small quote that I found in ‘Founders at Work’ by Jessica Livingston a book about entrepreneurship. Mena Trott (Six Apart) said : “I think one of the reasons happens to be that women aren’t always necessarily that motivated to prove themselves in the way that men are.you can’t do something like that without wanting to be exposed. I’ve always identified more with guys at school and I’ve always been competitive with them.” Many women are in marketing or design. I think marketing and design are a lot harder to learn than engineering.” So she’s saying something interesting, right, that you have to be ready to be exposed, that you have to be in front, to stand up in society.

Yes, that takes more confidence, doesn’t it?

It does

Yes, yes you’re right. Jessica Livingston has done some great work in paving the way for women here in the valley particularly.

  • What do you see as the obstacles for inclusion of women entrepreneurs in achieving funding? I guess we’ve got to build up our confidence, right?

On the very basics right, from school to study science & technology (I’m not saying that entrepreneurship & technology are related) but in my case in high tech yes. If we do not have enough women in science & technology first, there’s the first hurdle right. And then yes we have to show them that they have to think about the career. But the obstacles are much before just entrepreneurship, right. It’s about being ambitious with a career & not being afraid of having a career & having kids. These things are not open. There’s another quote I like very much. I think it was Ann Winblad, (Open Systems then a VC with Hummer Winblad): “A friend “My daughter’s worried about appearing too nerdy” if she invests in science. She was adding however some successful women including herself & Carol Bartz, who is now the CEO of Yahoo, ‘we really had fun teenage lives as well as adult lives as well we have been very successful.’ So the problem is that we need role models right. Role models like Steve Jobs, Mark Zuckerburg, you need role models as women too right. So if you put in front such women & Jessica Livingston then it will give a lot of confidence to women.

I think you’re totally correct & many people say that we do need more women role models.

  • Cindy also says:’ VCs tend to say that they back the person, not the idea. But if they always back the same kind of person — male — then women entrepreneurs have a better chance of getting funded when they have something that’s actually working in the marketplace.’ Do you agree that women need to have their business developed before they can achieve funding?

It may be true that basically the level of trust which is given to women compared to men is a priori so they have to come up with something which is more mature. It’s very understandable. I tend to agree.

  • Often advice for sourcing venture is equated with dating, implying that there is a matching that needs to happen with entrepreneur & investor. Have you noticed a general psychological profile of venture capitalists and also of entrepreneurs that promotes the attraction & synergy between them to develop a great startup?

I’m not sure that I have good answers for that. You have to remember that in Europe venture capitalists have less of an entrepreneurial background compared to the US. Venture capitalists here are probably former consultants, former bankers, former business people right.

So that makes them even more conservative, right?

Certainly, certainly, the risk taking in Europe well this has changed. You have a number of new firms with former entrepreneurs, you know the skype people are now investors , the people I was working with at Index Ventures where I worked are really great people. We have a number of good firms in Europe but of course we have to improve this before I’m even able to answer your question about the link to women. Sorry.

No I understand but if we are talking generally, if you hark back to your days as a venture capitalist, what were the things that made you decide to invest in a business when an entrepreneur came in?

It was clearly the people I agree, it’s not the idea! But of course in Europe because of the lack of long history with entrepreneurship, you cannot bet on serial entrepreneurs or former successful entrepreneurs so you have to bet on the talent. So it’s more engineering talent, the level of the energy of the people also. The level of self confidence maybe less important because that’s not a typical feature of Europeans compared to Americans. But you’re looking for talent, raw talent, engineering talent & then we would add to these people management talent. We may have to go & find in the US by the way. I’ve done a lot.

Brilliant thank you.

  • In the dance with an entrepreneur both in the decision making process of funding a startup & then in working with those startups what are the necessary qualities that make a good venture capitalist in Europe. Some of the talents mentioned: Would you trust your gut instincts & feelings that happen within the relationship with the entrepreneur as signs about what’s happening in the business, in the startup? Or would you ‘manage by influence or persuasion’?

So the gut feeling is tricky because when you have a lot of experience its very good. But when you are new like we are in Europe, I would be careful about gut feeling. But I think it’s important. I think the most important quality of venture capitalist is the quality of the network. Certainly they cannot manage companies but they can certainly influence entrepreneurs in saying ‘you don’t know everything so try to partner with people who can help you building a big company.’ I think that is a key feature. Of course in Europe we are very conservative this image of its better to have a small share of a big pie than a big pie of a small cake. If you manage to convince the founders of that element they can be successful which means also think global from day one, think international. Because buyers are not in Europe, whatever market initial buyers are in the US. So I think the quality of European investors is to be connected to the US so that both in terms of hiring people, finding partners, finding customers, finding future investors the quality of the network will be key!

And I guess, because you mentioned earlier venture capitalists in Europe are mainly consultants or from banking backgrounds, they wouldn’t be able to contribute to the business in the way that venture capitalists here do who often have a background in some sort of technology or life sciences or whatever. So I guess there’s a difference there in how they manage & what you’re saying is that they have to have good networks in Europe to be able to help the businesses or the startups that they’re working with?

I think so. Investors are better & better in Europe. Twenty years ago it was not good. Ten years ago it was better. Now it’s much, much better! I still think we really have to use the network yes.

Brilliant, brilliant, thank you so much for your time today Herve. It’s been really a delight meeting you & I really appreciate your contribution.

Written by
Pemo Theodore

Pemo Theodore is a Media Publisher & Event Producer and a great people connector.. She is Founder/CEO Silicon Valley TV which has served the San Francisco Bay Area for 11 years! She has produced Silicon Valley Events for Investors & Startups for 9 years. Pemo loves to video interview venture capitalists & founders to engage the human behind the success stories.. She has been Executive Producer of FinTech Silicon Valley for 5 years, organizing twice monthly FinTech talks & panels in San Francisco & Palo Alto. She believes in learning through a great discussion with experts in the domains. Pemo has a talent to bring the right people together and is an incredible networker. Pemo's events have been seen as supporting Venture Capitalists & Angels in sourcing great deal flow from startups who attend her events. Many founders have received funding through meeting investors at her events. Her favored medium is audio & visual media and she has built up a great body of work of podcasts & videos of panels & interviews in Silicon Valley.startup ecosystem.

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Written by Pemo Theodore