Founders Club

Founders Club expands to France – targets healthcare, technology and cleantech

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founders-club[France] The Founders Club, a reverse venture capital fund, is opening its doors to VC-backed startups in France. The fund enables CEOs and founders of companies to “use their shares and stock options to become limited partner investors”, essentially betting a small percentage of their personal future equity through investing in a wider portfolio than just the startup that they are involved with.

The fund will target the areas of healthcare, technology and cleantech.

From the press release:

Members of The Founders Club agree to pay a small percentage of their personal cash exits from an IPO or M&A transaction into the fund which is then distributed to all the members in that specific fund. Each fund balances risks of 30 different VC-backed early and later stage companies to maximize returns and synergies among participating entrepreneurs and VCs.

All participants must be already funded by tier one VCs to qualify to apply to join and each fund closes when 30 members join.

The Founders Club includes 15 VCs and advisors from Silicon Valley, New York, Boston, London, Paris, Stockholm, Munich and Tel Aviv who “source deals, vote on the admissions committees and work with members to achieve exits.”

To launch the French offering, The Founders Club is hosting two free VC and entrepreneur events in Paris. This first is focused on technology and cleantech and will take place on January 26th, and the second – healthcare and life sciences – on January 28th.

The events will feature senior VC speakers from AGF Private Equity, Ventech, 360 Capital Partners, Demeter Partners, Innovacom, Edmond de Rothschild Investment Partners, Seventure and Auriga Partners.

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  • CE

    Has a single entrepreneur joined this outfit as a member?

    What VC in their right mind would allow an entrepreneur to transfer a portion of their shares to this “club”?

    Good luck to them, but this is not going to fly (notwithstanding the free cocktail parties).

  • Andrew Romans

    Thanks for the comment. Let me give you the facts. We launched the Tech & Cleantech portfolio officially on December 10, 2009. We have signed CEOs & founders of VC backed companies with 7 in the US, 7 in Europe and 1 in Israel. So that answers your first question.

    Regarding your question of why VCs would “allow” their management teams to participate in this let me first direct you to where you will see 13 General Partners and senior VCs that openly support this. Our legal agreement is between the founder / CEO and The Founders Club. It is simply best practice to work within the VC community for the VCs to send us their CEOs.

    The reasons why this is great for VCs are many, but 2 key points are that if you are a VC in London for example and you manage to get your CEO into one of our portfolios, that CEO has immediate access to all of the VCs in the Valley, Southern California, Boston, NYC, etc. that have invested in the other companies in the same portfolio. That is good for VCs who typically see advantages in syndicating their investments with other “smart money” VCs often from other geographies that can help build global companies. Second no-brainer for VCs to see is that when it is time to sell their company and they get a term sheet from Yahoo!, the club of CEOs can unite to bring Microsoft, Google and Newscorp to the table quickly and get a bigger exit. The advantages go on and on.

    Call me and I can talk to you about the VCs that are working with us unofficially and as Venture Advisors as well as the specific 15 companies already signed.

    — Andrew Romans, General Partner of The Founders Club

  • Cleantech Man

    Interesting story – I would love to get informed about THE FOUNDERS CLUB in the future again.
    I am expecting exciting a cleantech portfolio of this organization in the future…

    • Andrew Romans

      Hello Cleantech Man, we have 1 cleantech company from Denmark in our first group of companies. We decided to combine cleantech with Technology (ITC / TMT) for now, because 1) there are not enough cleantech companies we feel we can bring in to reach critical mass and be all great companies, 2) the cleantech deals take longer to get to exit, so we want to bring the value of liquidity to cleantech entrepreneurs and diversify Tech entrepreneurs into this important sector. We will launch a cleantech only portfolio as we mature our business and the landscape of strong cleantech companies also develops. Contact us from our web site and we can speak offline.

  • Andrew Romans

    BTW, we have since signed numerous cleantech companies in the US, Europe and Israel making this sector a critical one for us. For the moment we continue to see value in including our cleantech entrepreneurs in the same entrepreneur exchange fund along with the other technology companies.

  • Michael

    I like this model, not sure if I would like competitors in the same fund. Wondering if CEO has a say as to who can join once he decides to become a member?
    Does anyone know?

  • Andrew Romans

    Michael, each new member must be accepted by our selection committee comprised of VCs from premier VC firms in the US, Europe and Israel. Beyond that they must also pass a 75% vote of acceptance from existing members – one member one vote.

    On competitors in the same fund, we encourage this. We have competitors in the same fund both in our Tech and Healthcare funds. We restrict the information they see on each other, but ironically, they probably know more about each other than anyone.

    It’s actually a cool thing:)

    Andrew Romans, founder of The Founders Club

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