Digital for all now

Juan Hernandez, L’Accélérateur: “There’s never been such promotion of entrepreneurship in France“

Juan Hernandez 25 Jun 2015

Created in early 2012 by a group of serial entrepreneurs, L’Accélérateur is a private investment fund. In addition to financial support, it also offers young startups high-level, personalised assistance to maximise their chance of success.

 

So what do the entrepreneurs who come to L’Accélérateur need? What sort of problems do they come across? Is it easy to be an entrepreneur in France today? We found out from Juan Hernandez, co-founder of L’Accélérateur.

 

 

A telecoms engineer by training, Juan Hernandez joined Lagardère in early 1995 to help set up the group’s Internet activities, including Club Internet, one of France’s first ISPs, and Studio Grolier. In 2004, he set up a few companies in the Internet and IT service sectors, which he sold off in 2010. In 2011 he began giving startups support and advice in strategy, financing and organisation and came up with the idea of setting up L’Accélérateur.

 

 

SUPPORT THAT GOES BEYOND MERE FUNDING

 

What sort of help do you give companies?

 

Juan Hernandez: We give four main types of assistance:

 

> ongoing tailored business coaching: we work with entrepreneurs to help them draw up their value proposal, design their business model, marketing strategy, distribution channels, etc. We have around fifteen business coaches, all of whom are experienced entrepreneurs who have already set up a number of companies, developed them, sometimes expanded them internationally and then sold them off.

 

> personal development assistance: our personal development, leadership and management coaches help the entrepreneurs work on certain skills or overcome psychological barriers that may appear as their company expands.

 

> access to a vast network: major clients, potential partners, institutions, public authorities, the media; etc.

 

> financing: we invest in the companies we support, between €20,000 and €50,000 at the start. In return for this financial support and coaching, we take a stake in the share capital. Later on, when the companies grow and need to raise several hundred thousand euros – or more – we also help raise capital or reinvest ourselves to the tune of €50 and 200K, and help the entrepreneurs draw up a funding strategy by introducing them to our network of business angels and investment funds.

“In nearly three years, we’ve raised capital for our companies over forty times, for a total of over thirty million euros.”

 

What sort of companies come to you?

 

We get both startups and companies which are already generating revenue. They’re young companies: 80% are in digital and 20% are in more traditional sectors. If we decide to help them, it’s because we think their staff are up to the challenge and have something really innovative to offer in their field.

 

There are around fifty companies in our accelerator. In B2B, for example, there are companies such as 1001 menus, which helps restaurants with their online marketing and is in the process of raising a huge amount of capital to expand in the French and European market. In B2C, there’s FioulReduc which sells domestic fuel online at guaranteed low prices. In the tourist industry, Guest App helps hotels, camping sites and restaurants get feedback from their customers and thus improve their online service. We also have entrepreneurs in the sports, software and cosmetics sector.

 

In most cases, the entrepreneurs who contact us are just starting a project: they’re either at the project phase and the company’s about to be or has just been launched, or the company is a year or two old.  Often, the companies don’t have any staff when we select them: it’s just the founders, and the team expands as the company grows.

“We hardly ever select companies with just one founder. On the whole, they’re teams of 2, 3, 4 or even 5 people. The first time we meet them it’s a short interview, just so we can get an idea of the nature and strengths of the project but also, more importantly, the quality of the team. We then take a more in-depth look at the teams we’ve shortlisted.”

Most entrepreneurs are about 30; a lot are business school graduates, but we also get some engineers. About 60% of the companies are in the Greater Paris area, and the rest are in other parts of France.

 

 

entrepreneurs NEED SUPPORT…

 

Why do these companies come to you?

 

Usually, it’s because they realise that, by asking for support, they can avoid making mistakes and save time and even money.

 

My partners and I have years of entrepreneurial experience. We are very clear-sighted and realistic in the situations we analyse – which is always a little difficult for the head of the company.

“Entrepreneurs are sort of schizophrenic: on the one hand, they have to be optimistic and determined to engage their teams, clients and shareholders, whilst on the other hand they have to remain humble and keep a sense of perspective.”

The fact that we’ve been through the same process and know their business well, but are not in charge of it gives us a special insight: we can analyse situations objectively, whereas entrepreneurs aren’t as impartial. Basically, we help them ask the right questions and find the answers.

 

 

What sort of problems do these entrepreneurs come up against?

 

Often, the entrepreneur devises an offering and thinks they just need more resources to communicate better and on a bigger scale in order for it to sell well. They don’t realise that there might be something wrong with the offer, which no amount of communication can help to sell. It’s important to have a good value proposal if the product or service is to sell and the business model has to be well-thought out if the product is to sell for a profit and for the company to make money. But there are many other sorts of problems entrepreneurs can come up against: differences of opinion between partners, strategic choices, problems recruiting key staff, psychological barriers which arise as the company grows, etc.

“Everything, from launching a company to expanding it, is a series of ups and downs, and having a partner who’s always on hand to assist the company is extremely important.”

We offer long-term support because problems change over time. In the first few months, it’s about developing the value proposal, having a fast national development plan. Then you have to adapt to changes in the competitive environment or think about an international strategy, financing, having the right teams and partners, etc.

“Just because you’re a market leader now, it doesn’t mean you still will be in two years’ time. There are constantly problems which mean you have to ask the right questions throughout the life of the company.”

 

  

IS IT EASIER FOR ENTERPRENEURS TODAY THAN 20 YEARS AGO?

 

In the 3 and a half tears since you created L’Accélérateur, have you noticed a change in entrepreneurs’ needs?

 

There are more and more companies that help startups: incubators have converted into accelerators, usually offering short-term support; investment funds now do seed funding too… The landscape has changed and, consequently, the entrepreneurs who come to us are now asking for more details about exactly what we do and how we’re different.

 

When I first became an entrepreneur, twenty years ago, at the beginning of digital, the difficult thing was getting started and getting the funding for all the necessarily technical resources: bandwidth for Internet access was very expensive, servers cost tens of thousands of euros, you had to buy the software… It was often difficult to get started if you didn’t have a few hundred thousand euros.

 

Nowadays, it’s much easier because the cost of technology has plummeted: prices have been divided by 20 or 30. So now you can get started, try out an idea, with €20 or 30,000, which is a fairly easy amount to raise.

 

Another thing that makes things easier now: there’s never been such promotion of entrepreneurship in France as there is now.

“For the past 2 or 3 years, a lot of incubators have been set up, there’s the FrenchTech lab, there’s BPI which supports lots of projects through funding and grants; the Pôle Emploi (the French government’s organisation which registers the unemployed, helps them find jobs and provides them with financial aid, Ed)subsidises people who’ve been made redundant if they start up their own company. The whole public environment is favourable to entrepreneurship.” 

On the downside: competition has never been so fierce. When there’s a good idea somewhere, someone else takes it up: if you start up a business with an interesting concept, within six months you’ll have 5 or 10 competitors.

“Unless you’re really strong in terms of your strategy, choices, competitive edge and your ability to raise funds to expand quickly in better areas than other companies, you won’t last long.”

 

 

Further reading:

3 tips for bringing entrepreneurial spirit into corporations

 

 

Photo credit: Nathan E Photography – « Going nowhere fast » / Flickr.com / Licence CC BY 2.0

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