French startup accelerator TheFamily is launching a new project called TheFamily Full Stack. As the name suggests, a small part of TheFamily team will now focus on full stack startup investments.
The company will set aside $1.3 million (€1 million) for the next 18 months to invest in full stack deals. Similarly, Tristan Vyskoc will become a partner. It’s an experiment, and a risky one on top of that given how little money TheFamily has raised so far.
There are hundreds of family offices in Europe who could fund these startups Oussama Ammar
As a reminder, according to Chris Dixon, a full stack company builds and controls the entire stack of the product or service without relying on existing giant companies in a legacy industry. These startups tend to be very capital intensive, highly disruptive and very hard to execute. Some notorious examples of companies that are slowly becoming full stack include Netflix, Amazon or Uber.
“We bet that full stack startups no longer need to raise between €500 million and €2 billion. Raising between €20 and €50 million should be enough,” TheFamily co-founder and partner Oussama Ammar told me in an interview. “There are hundreds of family offices in Europe who could fund these startups.”
And this is key. Instead of pitching these startups to French and European VCs, Vyskoc will talk directly with the investment managers of rich French families who tend to shy away from startup investments. Vyskoc has had past experiences in family offices and investment.
Co-founder and partner Nicolas Colin will also focus on full stack activities. Previously, he spent most of his time evangelizing government officials and executives working in big public French companies. He wanted to create a wake up call among these influential people to change their attitude toward tech startups and innovation.
Yet, in Ammar’s own words, this has been ineffective. Instead of wasting time on officials, he will help TheFamily’s full stack projects. Similarly, Ammar will spend one day a week working on it.
The plan is to build a full stack startup from scratch. TheFamily will pick an industry, find an experimented entrepreneur to lead the project and an executive coming from this particular industry. It will also co-invest with family offices to become a board member, will handle fundraising, branding, strategy and more. In other words, TheFamily should be a major operational help for these new startups.
The first project will be a full stack private clinic. But, as with every experiments from TheFamily, there are a lot of requirements and work ahead. The team will need to find the founding team and the initial investors.
While I’m still bullish on TheFamily as a startup accelerator, I’m more skeptical with this new activity for two reasons. First, TheFamily Full Stack seems to be too big a project — accelerating and investing in existing tech startups is already no small feat. And TheFamily should prove that it can create success after success before spreading too thin.
Second, TheFamily Full Stack requires a lot of operational knowledge when it comes to hiring, avoiding legal traps and fighting against regulators, becoming experts in very particular industries, such as the health care industry.
Full Stack sure is an interesting, crazy idea, and it needs to be. When you deal with full stack startup, you need to bet big if you want any meaningful return.
I really hope that TheFamily can prove me wrong. If it works, chances are that the first newly funded startup will become a massive, highly profitable company. But the main question remains: does TheFamily have enough operating and capital resources to make the clinic project a success?
Ammar is aware of the risks inherent in this kind of endeavours. “We don’t have any goal other than experimenting,” Ammar told me. “In the worst case scenario, we will create valuable connections with family offices.”