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Entreprises

CHAIR "FINANCE FOR INNOVATION" NL #2 - Interviews & insights

30 avril 2019
Interview of Jean-Marc Bally, Managing Partner at Aster Capital Partner

Find here the interview of Jean-Marc Bally, Managing Partner at Aster Capital Partner. He presents his activity, his background, Aster Capital and his evolution within the entrepreneurial financing ecosystem.

Can you tell us about your background and your career and your arrival at Aster Capital?

The two are linked because I started my career at the same time as Aster Capital.

A little over 18 years ago, in the 2000s, Schneider started a Corporate Venture activity called Schneider Electric Venture. I joined the entity at creation. There were two of us: Jean Netter and myself.

I was a Schneider employee at the time and we started in the heart of the internet bubble with the focus on investing in what people called startups at the time. We didn't really have a structure. We started with a lot of enthusiasm and very little experience and as we went along, we structured ourselves into a management company. The first fund was registered in a FCPR. FCPI is the exact term now.

A team of 4-5 people was initially formed to invest the funds in North America and Europe, mainly in the fields of energy, industry and construction. Jean Netter left in 2005. I then took over the management of the entity in 2006 and since then I have been in charge of this activity.

In 2008, we have the idea of emancipating ourselves from Schneider by welcoming other industrial investors alongside Schneider, which makes it possible to free ourselves from Schneider's strong dependence. We have taken a real step forward. This was achieved at the end of 2009 with the arrival of Alstom and Solvay, which enabled us to become independent and to have a majority share of the management company. We launched a 2nd fund whose size was 107 million after the first fund of 50 million. The team has grown, branches and subsidiary companies have opened in San Francisco, Israel in Tel Aviv. A branch was then opened in Cambridge, England.

Even more recently, a latest generation of funds has been launched with new players, including Plasicomium. We’re still focused on industry and traditional sectors: energy, construction, mobility and industry. And we recently became totally independent with 100% of the capital.

My journey is linked to this. I’ve been in finance before, and this has led me to focus on venture capital. But I wanted to do something innovative, I had more of an entrepreneurial spirit than a conventional employee spirit in Corporate. I had the opportunity to be able to marry the two, that is, not to have to free myself from Schneider Electric while continuing something that allowed me to be more in the matrix. I had no expertise in venture capital at the time, but like all those in venture capital today. The 2000s were the first years.

How does Aster Capital position itself in the market?

We are sectoral. We develop an expertise unlike the generalist. We invested in startups, meaning "growth companies". We are positioning ourselves from seed to advanced development. But we stay on companies that have to be financed, otherwise they die. The biggest challenge of this business is to find the best entrepreneurs capable of developing fast-growing companies. It’s not something that is self-evident.

What are your differentiation levers in terms of supporting the entrepreneurial teams you finance?

The idea is to serve the growth of companies by using our networks. Our historical networks were built largely on our proximity to the corporate entities that made up the funds we had raised. It is a vector that we have always wanted to develop.

First of all, we developed an approach called AsterHub: an approach made up of people dedicated to the business development of our financed companies, with the objective of helping entrepreneurs develop market access, and partnerships with industry to provide leverage and an additional growth driver.

More recently, we have done this more broadly with AsterFab, which expands the corporate and ETI ecosystem we work with. We sell innovation strategy consulting services in order to have a broader network and better serve companies. 

Finally, we have also launched a crowdfunding activity in partnership with Sowefund, to give a network effect with the general public.

Is it precisely the emergence of these new forms of financing, particularly with crowdfunding here, that forces you to join forces with them?

No, the new forms of financing are an expression of the public's desire to intervene more directly and disintermediate intermediaries, in order to give more meaning to money. ICO and Crowdfunding are two trendy vectors on which people say to themselves: "rather than putting my money on life insurance or the “Livret A” passbook, I will lend my money to my boyfriend through a platform or a local company. "It is an emerging phenomenon, but today the interest is not to fight it, but to embrace this possibility and to leverage what it brings. It brings a network of individuals made up of people who are supposed to be benevolent because they have an interest in aligning themselves with investors.

One of the difficulties of crowdfunding is that it represents a platform that tries to combine two things: the development of a network of individuals who can become funders and the selection of investment opportunities. However, this is not natural, as some platforms are unable to access equity investment opportunities. They do not have access to this market because they do not have a value proposition that meets the expectations of entrepreneurs.

The venture today brings certainty. For example, if you sign a TimeSheet with a funder, it will be for a specific amount. In Crowdfunding, on the other hand, you never have the definition of the precise amount. It's a real hazard.

The second uncertainty is the timing. If I sign a TimeSheet, with a company, I will tell him a two-month deadline, so I will try to respect these two months. In crowdfunding, the amount is dependent on a risk over time. It sometimes takes four months to reach a goal that could have been achieved in two months.

The 3rd hazard is the uncertainty of getting there, beyond the fact that you don't know the amount. It may not work. Thus, entrepreneurs have so little certainty when they have this approach, that they like to have certainty with a funder.

There is an additional element that is a little pejorative and that may not last over time: the aspect of notoriety. Today, a startup that finances itself through crowdfunding probably has a less significant notoriety effect in its fundraising than with a traditional VC. But this aspect will diminish.

But I believe in crowdfunding, which is why we have formed a partnership with Sowefund, a partner of the Chair.

We told them "you can hardly access VC deals, so you can come as co-investors in our deals that we offer you". This allows us to bring the public in together with us. On the other hand, the condition that we impose is that we are the only head in front of the entrepreneur. They manage the general public fundraising part, we manage the entrepreneur. We share the two components of development.

To conclude, can we come back to the crucial notion of "support" in Venture Capital?

We provide support. Accompaniment is getting on a ship and trying to reach a port, even if you are never sure you will make it. We do not do what entrepreneurs have to do for them. We are at the same time support, coach, manager and father whip. We compose the governance body that will guide the future of the company. Entrepreneurs feel, even more in their mentality than in their action, completely in charge. Often there is discredit between investors and entrepreneurs. They really think that the investor is a banker rather than a partner and this is a real problem. But in the end, we are here to try to contribute but also to direct the future of the company and act accordingly.

Interview realized by Géraud de La Bretesche, student at Audencia Business School involved in the Chair.


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