Ekeland managed some successful investments over the years, including Elaia’s investment in Criteo. As a reminder, Criteo has had a successful IPO on the NASDAQ while retaining its main office in Paris. Criteo’s current market capitalization is $2 billion. She is also one of the founding members of France Digitale, the main startup lobby in France.
Yet, while Criteo is an undeniable success, a source has told us that Ekeland only received a tiny fraction of the amount of carried interest (the main performance fee that rewards VC partners).
This is probably one of the main reasons why Ekeland now wants to manage her own fund. And it raises an important question around French VC firms.
Most VC firm founders keep the carried interest for themselves in France. It is one of the best kept secrets in the VC industry. Only LPs and top partners know who gets the carried interest. It means that your best team members won’t stick around. Even if they do the hard work, they don’t have any financial incentive to perform well.
Similarly, there is a lack of a strong company culture in the VC world in Paris. Most firms tend to work similarly and don’t have any fundamental differences. You don’t get attached to your VC firm.
More importantly, a typical French VC firm doesn’t work as a team, but as a collection of individuals. Some firms have an incredibly good team, but they are individually good. They don’t try to leverage the “2 + 2 = 5” effect.
That’s why seeing Ekeland leaving Elaia Partners is a shame. I don’t think we need more VC firms. We need bigger firms.
At the end of the day, there will be one winner in the French VC landscape. Until now, there is no modern VC firm in France. What I call a modern VC is a company that is able to segment the different tasks with people who can talk to LPs, manage investments, build a tech platform that lets you scale your deal flow, and support your startups when it comes to hiring, accounting, legal issues and more.
No firm in France has been able to transform itself into this ideal VC firm. Of course it is capital incentive, but VCs must be able to find the money to grow their teams. Maybe Ekeland will be able to crack the code and head this modern form of venture capital, maybe not. But I certainly wish her the best of luck in her future endeavours.