The following is a guest post by our Rude BA, Jerome Camblain.

I mentioned in a recent post the need to prepare for the series A crunch. The recent rise in the number of seed-financed deals will create a massive arrival of companies to the first round that follows the ‘Friends & Family’ or Angel seed round. This time, startups will come to the market for needs circa €1 million and guess what?: there will not be enough money for everyone. It does not mean VCs will be less active; the actual number of series A deals might go up. But it will focus on financing real companies, not an app This is true worldwide. Mortality in business angel financed deals will go up. This even more true in the new French tax environment.
On top of the usual suspect that should make your six slides deck (1- problem you solve, 2- your solution, 3- best possible team to do it, 4- market size, 5- go-to-market strategy and 6- use of funds), Investors expect at this stage the candidate for funds to be able to demonstrate an early traction OR an ability to execute internationally. In France, you will have to be able to show BOTH.

Traction

In a tough funding market, teams should focus on revenue generation. At such an early stage, customer validation may be enough. Don’t panic. Investors are looking for a market acceptance with early metrics such as a well documented funnel showing good conversion & little churn. This proves that the product fits a need and that you have well thought out the go-to-market strategy. A large enough sample, that can demonstrate this, will be sufficient. You do not need a huge volume.

Global Reach

This is not a crazy expansion plan, far from it. The only thing you should do at this stage is to develop a product that can be sold worldwide with little adaptation needed and to hire from day one a multi national/cultural team in Paris, to make sure you have an open culture that will support your future ambitions.
The question I often hear from French startups is “when should we open an office abroad?” There are as many answers as individual cases; nevertheless, investors generally only wish to fund international expansion after two conditions are met:

1. you have demonstrated that you can gain some significant market share in your home market, and
2. you have replicated your model in at least one other target country.

This will not happen at the time of your series A funding, therefore don’t go out there trying to conquer the world before you can demonstrate the PMF (Product/Market Fit) at home and then your ability to replicate in just one other country.
Hire foreigners and create an easy to translate/transpose product. An idea could be to attract a non-French board member prior to that round. It would demonstrate your sense of planning and also could help in areas where France is not most famous for such as marketing, sales, UX…
Show global execution potential in that sense. Don’t spend before you are ready. Exporting too early could stretch your resources and kill you. I have seen so many firms rushing to occupy the space worldwide… and realizing they were pushing (with limited resources) an unfinished product that did not fit. Remember, you never have a second chance to make a first impression.

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