The French government will fund expatriated French entrepreneurs (& the VCs that back them)

Oct 7, 2014
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You may recall that back in June of this year, during the FrenchTech month, François Hollande spoke in front of 200 members of the FrenchTech community (and a few distinguished guests, like GigaOm founder & TrueVentures partner Om Malik as well as VentureBeat Editor in Chief Dylan Tweney). During his speech, which had its ups and downs, Hollande evoked the idea that France’s national investment fund, BPIFrance, would pursue co-investment strategies with US VCs willing to invest in US companies with a footprint in France.

We hadn’t heard much since that speech, until now – this past month, Romain Serman, former Consul General for the French Consulate of San Francisco, has been making his rounds as the new Director of BPI USA. I sat down with Serman last week to talk about what BPI USA would become, and how he went from Diplomat to VC (basically the same thing in the Silicon Valley, without the special license plates). Serman says it happened earlier this year when President Hollande made his trip to the Silicon Valley, accompanied, among others, by BPIFrance director Nicolas Dufourcq. During the short time they were together, Dufourcq told Serman he was looking for someone to bring BPIFrance to the Silicon Valley, and Serman, already well familiar with the SV Tech Scene, volunteered.

What BPI USA is & isn’t

There are so many different ways that BPIFrance could expand to the US, and so few have been tried by other governments – this is one area where France is among the leaders in its market. Here in France, BPIFrance has a variety of roles:

  • At a seed level, BPIFrance co-invests as an LP into seed funds (Elaia Alpha, Partech Entrepreneur, etc.)
  • For larger rounds, such as Withings, BPIFrance invests alongside other funds as a direct investor
  • For larger amounts of money (as well as very small amounts) BPIFrance provides debt to startups

There are other activities; however these are the principal ones that concern us when imagining BPI USA. Serman says that step one is making direct co-investments in French startups with a Silicon Valley footprint – Scality, for example, who spoke at our Summer edition of Paris Founders Event. In addition, a slew of New York-based French startups, as noted by Index’s Martin Mignot.

Step zero is, of course, to get the word out that BPI USA exists.

However, the longer-term goal is to enable French entrepreneurs in the Silicon Valley to raise money from BPIFrance – currently not an easy task, as all VCs are Paris-based – however necessary. One possibility would be to identify Silicon Valley VCs with a track-record of investing in companies with a French footprint – Sequoia, SoftTech, or even SVAngels – and coming in as an LP. Serman points out that this is, of course, easier said than done, as getting in as an LP to the next fund is all about who you know, and what you can provide for VCs – especially good VCs.

In a first stage, however, picking out companies that follow the growing formate of “R&D in France, Fundraising in the Valley,” and being there to provide them with capital in order to continue growing their R&D team in France is not a bad idea. The question, of course, will be ‘why choose BPI USA?’ – or, more politely, how will BPI USA get in on the best companies – however, getting in on oversubscribed deals for French startups may not be the goal, as much as it is to catch the startups who just need that first 20% of their fundraising subscribed in order to get things rolling with other VCs.

France is growing what it means to be ‘French,’ something that I hope will be a growing trend in its Public Sector. It was seen where its talent is going, and it is following them there, providing the same level of support as it would if they remained in France – it’s a bold move, and I look forward to the first deals.