On January 1, HEC Alumni established a fund designed to work with start-ups by HEC graduates. The goal: to align financial performance and support for entrepreneurship. Frederic Jousset (H.92), president of HEC Alumni, and Benoist Grossmann, Managing Director of Idinvest Partners, discuss the project’s guiding principles.
What was the impetus behind HEC Ventures?
Frédéric Jousset: HEC has a very fertile entrepreneurial ecosystem. Its tradition of “learn to dare” dates back to the creation of the major in entrepreneurship by Robert Papin in 1978, while its incubator takes up the most space in Station F, and its community of 60,000 alumni is very dynamic. All HEC lacked was a vehicle to provide financial support to young entrepreneurs, like similar funds at leading American universities. To set up our fund, we needed a partner. The school’s job is to train students while that of the alumni association is to establish links, not to manage a major fund!
Why did you choose to work with Idinvest Partners?
F.J.: We solicited bids. We were looking for a specialist in innovation capital that was known for its ethics, transparent management practices and history of strong performance with this asset class. The partner also needed to be able to manage a large community of subscribers. The entry ticket to access the fund is 10,000 euros. It is open to HEC graduates and all interested individuals, as well as to companies wishing to establish strong connections with our entrepreneurial ecosystem. Idinvest Partners checked all the boxes. We were especially impressed that Benoist Grossmann came here to make his pitch in person along with all his team, just like a start-upper!
What attracted you to this project?
Benoist Grossmann: At Idinvest Partners, giving start-ups the boost they need is one of our main activities. We manage several investment funds, have 80,000 individual clients, and have established very stringent due-diligence criteria. To set up a dedicated fund with HEC, which has an impressive start-up talent pool, was a natural choice for us; 16% of the companies in our portfolio are headed by alumni, and our contacts with HEC teams has been excellent.
What kinds of companies will HEC Ventures support?
B.G.: New start-ups, mainly based in Europe. We are open to all sectors, with a special interest in digital activities. We will, however, avoid biotech and medtech, which are both capital-intensive and with long development cycles that can’t be shortened.
F.J.: Of HEC Ventures’ start-ups, 80% will be headed by HEC alumni. The remaining 20% will be open to others. For example, we could work with graduates of L’École polytechnique, which is HEC’s partner institution. Returning the favor!
B.G.: We are people specialists. At the beginning phase of a start-up, everything depends on the quality of the founders. Idinvest commits itself for periods of five to eight years. We rely on inspiring teams of entrepreneurs whom we enjoy working with, because we will meet with them every month and a half.
In what ways is the fund based on the HEC affectio societatis?
F.J.: Entrepreneurs will have access to both expert financial support and benevolent coaching: a unique combo of “start money” and “love money”. A full-time analyst will work at the association to promote and develop the fund within the HEC network. Downstream, 50% of capital-gains incentives (carried interest) will revert to the HEC Foundation. As for the start-ups supported by the fund, they will commit to donating to the Foundation and to providing it with a percentage of their profits if their ventures are successful.
Why should someone sign up with this fund rather than another?
F.J.: HEC Ventures offers an opportunity to combine returns and impact. Returns, because the fund has the potential to out-perform in its asset class. It is overseen by one of the best management companies, and it takes advantage of the pool of entrepreneurs and exceptional network of Europe’s top business school. Impact, because it will benefit HEC Foundation, which fosters social diversity through its scholarship program for HEC students. HEC Ventures will also offer subscribers a chance to give a helping hand to young HEC graduates who have great ideas for projects but lack the familial or social networks needed to get these projects off the ground. This aspect of the fund is particularly important to us.
B.G.: We hope that some of the 30 start-ups that join the fund will be tomorrow’s “unicorns”, start-ups worth $1 billion or more!
Contact and information: Louis Bo ̂ (H.13), firstname.lastname@example.org.