By André Aubert, MBA ’00J, Pan Pan, MBA ’03J and Roman Pelka, MBA ’00J
Fireside Chat with Index Ventures‘ Bernard Dallé, October 2015, Geneva
The fully booked event organised by IPEC Geneva (Pan Pan, MBA’ 03J, Pantèra Ventures and Roman Pelka, MBA’00J, Montfort Capital) was moderated by Pan Pan. The featured speaker was Bernard Dallé (pictured left with Roman Pelka) who has been with Index for over 18 years and currently also manages its operations. Index Ventures is a multi-stage VC fund manager that has raised seven venture capital funds totaling US$3 billion since 2005. It was founded in Geneva, with offices in the tech hubs of London and San Francisco, and has a network of entrepreneurs in dozens of countries. It also offers a three year venture associate programme for pre or post-MBAs.
Fireside Chat with Index Ventures & IPEC in Geneva
Key Takeaways
On Geneva: “Geneva is almost a hub for VC. It attracted a billion dollars in VC fundraising this year alone,” said Dallé, pointing out that Highland Europe, a growth-stage technology investor, raised a new US$365 million and Index just closed a US$700 million fund.
On European Venture Capital: “European funds raised US$3 billion this year. Several of them were first-time funds… Two or three years ago, the view on Europe was negative. Top-tier institutional investors said they would invest in VCs in the US, Silicon Valley, India, China, Israel but not Europe. But that has changed. It has never been as good as in the past few years,” said Dallé, pointing to both institutional investor interest and exit opportunities.
On Measuring Returns: Returns are measured across the entire portfolio. “If you look at an early stage fund, it will have about 30 companies. Over its lifespan of 10 to 12 years, 20% matter in terms of returns and 80% don’t matter. You cannot predict the first few years which investments will matter. A startup can seem dead but turnaround and be a star in five years’ time,” said Dallé.
Venture Funds & Performance: Consistency of fund performance is important to be able to raise multiple funds over time. Typically a venture fund aims for a 20% to 40% net IRR (after fees), or 2x to 4x fund multiples.
About the Loss Ratio: “The early stage fund loss ratio is immaterial to performance. It is calculated simply: you take all write-downs and write-offs versus the total money invested. There is no correlation between loss ratio and the performance of the fund. VCs do not worry about losing money. What you should worry about is not backing the big winners,” said Dallé.
On picking the right entrepreneur: “Over time, you develop ‘pattern recognition’ of the entrepreneurs with the highest probability of succeeding,” said Dallé. They are the ones that want to change the world and make an impact. They are rarely motivated by money but by their vision. Surprisingly, the ones that succeed tend to be those that have failed earlier, sometimes repeatedly, not necessarily the serial entrepreneurs [ones that have already had a successful exit].
Sectors with the biggest potential for VCs: Fintech, big data/cloud computing, robotics/artificial intelligence, cyber security, mobility and personalised healthcare.
Forthcoming IPEN events in Europe
IPEC Cocktail Event @ SuperReturn International 2016
Date: 23 February, 2016 @ 18:30 CEST
Venue: LA Café at the Intercontinental | Berlin | Germany
Registration: No need to register, Cash bar
The event will be hosted by Benjamin Revillon MBA’04J. If you have any questions, please contact Benjamin.
2016 IPEC Annual Gala Dinner
Date: 26 May 2016 @ 19:00 CEST
Venue: To be confirmed | Paris | France
Speaker: To be announced
Registration: Register here. Tickets are sold on a first come first serve basis.
Password: IPECDinner. This is a private event, and meant of industry professionals and INSEAD and Wharton alumni only. Tickets are provided on a first come first serve basis. There is limited seating.
If you have any questions, please contact Francois, and / or Jonathan. Please stay tuned for updates.
Transportation from Paris to Fontainebleau for the IPEC Annual Gala Dinner
Date: 26 May, 2016 @ 22:00 CEST
Venue: To be confirmed | Paris | France
Seating: Complementary
Password: IPECTransport
Registration: Register here. Complementary transportation from the IPEC Annual Gala Dinner to Fontainebleau is provided to IPEC’s guests. Seating must be reserved to be guaranteed a spot through the online portal, and is provided on a first come first serve basis. There is limited seating.
If you have any questions, please contact Francois, and / or Jonathan. Please stay tuned for updates.
Early Bird Sales @ 14thAnnual INSEAD Private Equity Conference
Date: 27 May, 2016 @ 08:00 CEST
Venue: INSEAD Fontainebleau
Speakers: To be announced
Registration: Register here, as early bird sales are available for a limited time only. Tickets are sold on a first come first serve basis. There is limited seating.
If you have any questions, please contact Francois, and / or Jonathan. Please stay tuned for updates.
