About a year and a half ago, Arnaud and Augustin took a chance on me, making me a founding associate at OVNI Capital. Reflecting on our journey together and recent milestones, I wanted to share the highs and lows of building a venture firm from scratch. It’s not a topic often discussed in the VC world, so I thought it could be a good subject to talk about.
Fresh out of school, I joined OVNI with (very little!) experience as an analyst in various VC funds and a strong passion for entrepreneurship and tech. I was still craving the adrenaline rush of my athlete days at the time, and I was uncertain about my post-university path. I loved my experiences in VC, but still felt it was too corporate. On the other hand, I believed that getting involved in an early-stage startup would provide that rush. The contagious drive of Arnaud showed me I could merge both passions seamlessly → here I am, joining a fund with a (very!) modest AUM at the time, no brand name, and just one deal in the portfolio. Adrenaline at its peak.
Fast forward 1.5 years, we’ve significantly grown our AUM, gained the trust of six fabulous entrepreneurs (with a seventh investment in the making!), and begun collaborating with renowned international funds as co-investors. While we are still far from our final goals, here are some early learnings from our journey as financial entrepreneurs:
As an Emerging VC firm, you will likely face a strong cold start problem
At its core, VC serves as the bridge between capital and talented entrepreneurs — a marketplace where deal flow represents supply and LPs represent demand.
Before winning over LPs, you must prove your access to high-quality deal flow. And before attracting talented entrepreneurs, you must demonstrate how you can add value, often by having exceptional LPs onboard.
At OVNI, we tackled this challenge by prioritizing the consolidation of a strong supply to attract LP interest. With no established brand, we adopted both short-term and long-term strategies:
- Short term: employing an aggressive outbound approach using automation to target potential startup founders, and
- Long term: establishing a strong social media presence / network nurturing to generate highly inbound and proprietary deal flow from various sources.
Once we identify a deal that matches our thesis, we quickly turn into intro mode, connecting founders with relevant people from our network (founders, operators, investors) to prove our value. While many funds rely on proprietary deal flow from backed entrepreneurs, you need to be creative when you have very few deals in your portfolio. 😉
This led us to assess over 3000 deals, engage with 500+ French-based founders face-to-face, cultivate a community of over 300k individuals within 1.5 years, and positioning us in highly competitive deals by committing early. We have initiated the flywheel effect and now access high quality deal flow on a weekly basis.
Just remember, it takes time and daily efforts. :)
Stay true to your thesis
I recently heard a story about an emerging fund that found a promising team and strongly believed in their vision. But the deal they were considering was very unconventional, and they were worried about how it would be viewed by potential LPs (since it was one of the fund’s first investments and they were still in fundraising). Ultimately, they decided to pass on the opportunity because of this concern. Another fund with a big brand name and strong track record didn’t have this concern, and ended up committing to the deal.
I totally get it: starting a fund comes with a lot of pressure. Your first ten investments can shape the trajectory of your entire career because they need to perform well to enable the raise of subsequent funds. So you might want to fit into boxes. But LPs are typically attracted to VC funds because of the diverse perspectives they bring. If you start investing like everyone else, it becomes hard to stand out.
→ Stick to your investment thesis and back deals you truly believe in, no matter how it’s perceived. It’s the only way to distinguish yourself from other VCs. Plus, performing funds don’t really care about how it would look like to invest in a particular deal.
Choose Partners with Matching Investment Strategies
Many argue that diversity and differing perspectives are crucial in business. While I agree with this notion to an extent, I believe it doesn’t necessarily apply to venture investing.
Having partners pursuing different types of deals will lead to conflicts. If you’re aiming for high-risk, high-reward opportunities, it’s best to team up with someone who shares that goal. Conversely, if you prefer safer investments, find a partner with a similar approach.
The reason is quite simple: A risk-taker may feel burdened by carrying the fund’s performance, while a more conservative partner may criticize the high-risk investments for their failure rates.
→ The best funds are composed of individuals with aligned investment philosophies.
Be highly collaborative
The venture business is quite strange, I would say it’s one of the few sectors with such a robust coopetition (cooperation + competition) mindset. As an emerging fund, you need to form alliances: it is the key to 1) achieving broad coverage (yes, you have to benefit from the network of more established funds) and 2) delivering value to the founders you support by connecting them with relevant people. Connect with as many VCs, operators, and Angel investors as you can.
→ Motier nailed this and is now the top pick for any foreign investors eyeing France for investment (in only two years!).
Always keep the momentum
Much of the VC business involves waiting — waiting for LPs to commit, waiting for entrepreneurs to finalize their round structures (often your investment alone won’t seal the deal as an emerging manager). This waiting game can be mentally taxing.
I believe one of OVNI’s greatest strengths lies in our ability to maintain momentum even when circumstances are beyond our control. This involves continuously meeting with new founders and helping the ones in your portco, writing articles like this one (yes, we are currently waiting for a founder to finalize his round 😁), conducting in-depth sector analyses (stay tuned for our upcoming deep dive with Irénée 👋🏼), and bolstering our brand (check out our new podcast 🎙).
Find your place in the team, and embrace the imposter syndrome
Emerging managers often have small teams, leaving little room to hide and requiring a strong sense of ownership over all tasks. As a junior member, you’re also expected to ramp up at a faster pace, taking on responsibilities that you might not typically encounter in larger funds.
This often triggers imposter syndrome, as you consistently perceive yourself as the least knowledgeable person in the room, regularly engaging with individuals with significantly more experience (from founders to LPs).
It may sound dumb, but the best way I’ve found to overcome this is by being as kind as possible with the founders and adopting a proactive mindset whenever I see ways we could potentially help.
I can’t wait to see what the future holds. From how the founders we are backing will develop themselves, to the new subjects we will be exposed to, and the incredible people we will meet along the way… I could not hope for a better way to kickstart my career.
I know we still have a lot of work to do. We started from scratch. But I’m extremely proud of what we have accomplished in the last 1.5 years, and it’s hard to believe everything has happened in such a short timeframe. Even as an individual, I wouldn’t have expected to have grown that much in any other way.
Augustin, Arnaud, thank you for teaching me the basics of entrepreneurship every day. It’s an honour to learn alongside such caring yet demanding partners, and I believe I will be forever grateful for the opportunity you guys have given me.
At OVNI, we invest in pre-seed/seed stages and partner with founders who have global ambitions from day one. If you are a founder in this space or know someone who is, feel free to contact me at thomas@ovni.capital.
