French payroll startup PayFit is now valued at $2.1 billion after raising a Series E round of $289 million. However, it’s not France’s only recent unicorn: Ankorstore, Qonto, Exotec and Spendesk also joined the club this month.
If you add Back Market’s $510 million Series E round, valuing the company at $5.7 billion, things are looking good for French tech in 2022.
As you can imagine, the pace of breeding and raising new unicorns has generated a lot of press coverage in France, but there is one article in particular that caught my attention: portrait from PayFit Firmin Zocchetto, OVHcloud Octave Klaba, Technology of Change Jeremy Jawish, and Contentsquare Jonathan Cherki.
As the French financial newspaper Les Echos pointed out, these four founders of French technology have one other thing in common: they founded a unicorn on the first try.
If it’s possible for a first-time founder to build a billion-dollar company, why don’t we talk about it more often?
Of course, entrepreneurs sometimes get the press because they’re under 30, like Zocchetto. But even 20-somethings aren’t always first-time founders – Glovo’s Oscar Pierre it is not, for example.
This post is not about young founders. It’s about remembering that, regardless of age, first-time founders can build great companies.
Strangely, this seems underrated in the startup ecosystem. This fact reminded me of a funny outburst by Expensify CEO David Barrett when I first interviewed him for my deep dive into his company, which has since gone public.
I think the whole idea of the serial entrepreneur is a strange concept. The only time there is a ‘something serial’ is a ‘serial killer’.
Imagine a ‘serial father’. I meet someone, I fall in love, I have a bunch of kids. And then I go out, and I do it all over again. And so I say I started seven families. You’d be like, “Man, you’re a monster.” But if you do it as CEO, we celebrate it! “Oh, that’s great, what a great job.”
There are so many weird incentives in Silicon Valley, and all the Silicon Valley hero stories are wrapped up in this really morbid concept of serial entrepreneurs.
Expensify is not Barrett’s first startup, but as someone who set out to “build a company that [he] wanted to work forever”, praise for the concept of “serial founder” is his pet peeve. He’s right: There’s nothing wrong with long-term commitment, and there’s something inherently wrong with glamorizing serial entrepreneurs because of it.
This is not to say that the experience is without value, but that it comes in many forms. Having founded another company has lessons, regardless of whether it has succeeded or failed. However, it is perhaps equally valuable for a founder to have relevant industry experience, especially if it is directly related to the problem they are facing.
Unfortunately, when it comes to venture capital checklists, years of industry experience at unattractive companies doesn’t tick a box the way having held a C-level role at a former startup. This is especially true in places like Latin America, where the market is split into two layers – hot or not.
Latin American VC Hernan Haro confirmed my perception: “Most Latin American VCs are chasing the same entrepreneurs, those ‘proven’ by a track record as founders or previous leadership roles in unicorns. It is true that they are more successful in raising capital, but this is more of a self-fulfilling prophecy than anything else.”
Pattern matching is part of what VCs do, but when they’re looking at the wrong signals, they’re doing themselves and their LPs a disservice. “VCs who only look at ‘proven’ founders are seeing correlation, not causality, and missing opportunities,” said Haro.
That VCs are missing out on opportunities doesn’t keep me up at night. After all, it makes room for others, like the Haro seed fund MrPink. My concern is with the founders; out of the spotlight, first-time entrepreneurs may not be getting the resources they need.
Fortunately, there are more and more resources available to founders in general – not just capital, but also helpful communities and content from trusted sources.
For example, you can now find advice online from leading venture funds on how to raise your first bucks or get feedback from one of their partners, when a few years ago this was mostly behind closed doors at major accelerators.
Quality online resources are particularly valuable to first-time founders, not just for knowledge, but also as a reminder not to underestimate themselves. Experimentation and bootstrapping are also great ways to learn, and VCs who ignore this type of profile may regret it.
My prediction, however, is that competition for hot deals will make VCs look beyond their turf and pay more attention to startup entrepreneurs. Let’s just hope it’s not just young people or those who tick other boxes (best accelerators, best schools, etc.) – but simply those who are able to deliver high returns.