Venture Capitalists will often tell you that it’s very difficult to tell how good a VC is until their 7th year (when they begin to see if their earliest investments will make a significant ROI); accordingly, it can be very difficult to tell whether a VC firm is good or not. VC firms are separated by “Tier”s, mostly referring to a combination of the value of the assets under management, as well as, potentially, the value of their most successful investment (although investing in one $1 Billion startup does not a Tier 1 VC make).
With the advent and perpetuation of incubators & accelerators, “Assets under management” has a near equal important to the services, or value-added, that a VC can provide. Andreessen Horowitz, generally considered to be the face of new-age VC, has over 80 partners in its firm, of which less than 30 are investors. They break down partners into categories, including Investors, Market Development, Corporate Development, Operations, and Technical Talent. They also have partners on staff who are “special advisors” and “Board Partners.”
Sitting on the 10th story rooftop of Partech Venture’s new office space Partech Shaker, which in the coming 18 months will be an optional home to the dozens of investments they will make (1-2/month on average), you get the impression that you’re at the first Tier-One VC in France. Across the pond, Accel Partners (the only VC that is tier-one in Europe & the Silicon Valley), Balderton Capital & Index Partners paint the scene of Tier-One VCs in Europe – other VCs, like Passion Capital & Atomico (both founded by former Skype employees/founders), are fast-rising Tier-Two VCs, along with Alven Capital in Paris & Earlybird in Berlin – however, Tier-one is an exclusive branch.
So what makes Partech Ventures Tier One?
The first, of course, is assets under management. Partech has already announced the intention to raise a large fund for 2015 – what hasn’t been announced is that the fund size will be at least €300 Million. Next to Index Ventures’ €400 Million fund, this begins to look pretty good. Add on Partech’s current €130M fund and the other fund that they are raising – Partech Entrepreneur II, a follow-up to the 30 Million seed fund they raised last year, and you’ve got the right amount of ammo. Given that the aforementioned Tier One European VCs all now have boots on the ground in Paris, this looks like the right place to be.
Next of course, are the services. While a coworking space may not be a big deal in Berlin or London, finding office space in Paris is a pain. So Partech Ventures snagged LeFigaro’s former headquarters – a 10-story building in the heart of the sentier – and reconverted to offices that can fit teams of 3 – 25, at 400€/month/person. The office space is meant to be temporary, and current investments for the most part already have office space (such as Sketchfab & Pricing Assistant, who are share 39.io with a handful of other startups), so they have opened up the space to a handful of non-portfolio companies – there are also spaces for organizing events (such as their rooftop terrace/bar), spaces for corporate partners (yet to be announced, as the venue officially opens in December, despite being refurbished and occupied as of Sept. 15th), as well as meeting rooms and, soon, a Fab Lab for hardware startups (Partech invested in Lima earlier this year).
In addition, Partech has built their name off of their ability to bring European startups to the United States – their first major success, in the 90s, was Business Objects, where they were a seed investor. Business Objects founder Bernard Liautaud is now a partner at Balderton Capital. Increasingly, with their US investments, they will be helping them come to Paris – their ‘plug and play’ office space is very attractive to companies used to using services like Regus for temporary office space.
Partech’s got the money, they’ve got the network, they’ve got the experience, and they’ve got the services. Some in the Paris startup scene might comment that Partech is ‘old’ in a young man’s game – both in terms of age and in terms of mentality – however, Partech is bringing on many new partners and has been for some time in order to manage growth, and many of those new hires – Corentin Kerisit in Paris, or Otto Birnbaum in Berlin for example – have rejuvenated the company. The company is set to bring on 3 new partners for their new larger fund, and at least 1 new hire for “Partech Entrepreneur II,” though official announcements have not been made yet.