March 9, 2009

Parisian investors share valuable tips with startups

Ayelet NoffBack in January, when I attended Seedcamp Tel Aviv, I wrote about some of the priceless tips that investors shared with the startups there.  In a similar panel discussion at Seedcamp Paris, Parisian investors and VCs shared more valuable tips.  Among the investors in the panel discussion, which was moderated by Index Ventures’  Saul Klein, were Anne Gousset of Paris Développement (an incubator), Chipper Boulas of Boulas Ventures, Luis Courtot of Courtot Ventures, Xavier Lazarus of Elaia Partners and Philippe Colombel of Partech VC. It was interesting to hear what they all had to say.

The investors in Tel Aviv spoke a little bit about the current economic crisis. However, in Paris last month this crisis seemed to be a focal point of the investors’ discussion. Xavier of Elaia Partners brought up the point, right off the bat, that many companies that would have easily been funded a couple of years ago are now dealing with a much higher hurdle. Startups now not only need to show that they have a great product but also that it is sustainable, because nobody knows how much time it will take for the economy to improve.

Luis expanded on this, saying that now it is important for startups to demonstrate “proof of concept.” He said that a couple of years ago, as an investor you could simply fall in love with a product or service. However, he said, “today there is still love in the air but you need to demonstrate proof.”

Chipper emphasized this point and added that when startups are preparing to present their product to investors they need to make sure that their product offers a very clear value to a targeted set of users that solves a real problem.  In this day and age “you don’t want to be a luxury – you need to be a must have.” Chipper said that in order to invest in a business he must believe that the aspiration is big enough that in 3, 4 or even 5 years this could be a major business. There must be a burning need for this product and the startup team must demonstrate very concrete stepping stones on how they are going to become a success.

The investors also mentioned that you don’t just need to have a good product – your startup’s team is just as important.  If your team doesn’t have a clear mind or vision, as well as a good set of personal values and morals then it will be hard to build confidence. You must not only present your company well, but you must present yourself in a positive light as well.

Anne of Paris Développement added the fact that investors hear presentations from a huge number of startups and the ones they remember are the ones that kept their presentation simple. Don’t try to squeeze too much into your five minutes – whet the investors’ appetite with your presentation and when you’re done presenting they’ll ask you more if they are interested in what you have to offer.

To watch the full panel discussion, see the videos below.

Ayelet Noff is a partner in Socialmedia.biz and founder and Co-CEO of Blonde 2.0, an award winning digital PR agency with branches in Boston and Tel Aviv. Contact Ayelet via The Blonde 2.0 website , email, or follow her on Twitter and Google Plus.

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