Fabrice Grinda is a French entrepreneur, blogger for Business Insider and super angel, with more than 200 investments around the world, including Alibaba Group, Airbnb, Beepi, FanDuel, Palantir, and Windeln.
I became an investor at the same time when I became a tech entrepreneur back in 1998. By virtue of being a visible consumer Internet CEO, other entrepreneurs started approaching me for advice and investment. I wondered if it would be distracting from my core mission to be investing in other startups, but I realized I was meeting many entrepreneurs to try to help them anyway and this only aligned me with them. I was literally putting my money were my mouth was. Besides, I loved hearing their ideas and struggles while trying to be helpful. If anything, I felt it made me a better entrepreneur as I kept my fingers on the pulse of the market and understood the latest trends and approaches. This continued through my entrepreneurship career and really took off when OLX’s traction and visibility grew with hundreds of millions of unique visitors a month in 30 countries. Given my full-time job, I decided to focus on marketplaces since I could evaluate them quickly. I would take a 1-hour call and make my decision during that time. In 2009, I started pooling my investment activities with future FJ Labs co-founder, Jose Marin. We honed our investment thesis by back-testing our pool of investments to date and developed our investment heuristics that have not changed much to this day. After I left OLX in 2012, we eventually decided to raise our first fund with external capital. We just closed our second fund.
We look for two things in a founder. We need the founding CEO to be an amazing story teller. It’s an amazing comparative advantage as it allows the company to raise more capital at higher valuations, attract better talent, sign amazing business deals and get lots of PR. However, it’s not enough. An amazing story teller may raise lots of capital, but not build a great business. We also want the CEO to be analytical and numbers driven and to really understand the intricacies of the business they are in and its unit economics. Again, being purely numbers driven is not enough if you cannot raise enough capital or attract an amazing team. There are many great story tellers and many analytical founders, but the Venn diagram of people that are both is rather small and it’s those founders we want to back.
Many funds with billions of assets under management have fully fledged platform teams with lots of venture partners. They have headhunters and experts in various areas to help portfolio companies. We do not have the resources to do all those things. Instead we decided to focus on three differentiated ways of helping.
First and foremost, we help startups raise. We either help them complete their existing round or raise future rounds. Ultimately, FJ Labs is not setting the terms of the round. We just want the companies we love to get funded. We do deal flow sharing calls with around 100 VCs every 8 weeks covering almost every stage and geography. We have a tailored approach where we present the right VCs to the right startups. The VCs love it because they get differentiated tailored deal flow. The entrepreneurs love it because they get meetings with top VCs. We love it because the startups we care about get funded.
Prior to the entrepreneur going out to market, we try to do a catch-up call to give them feedback on where they stand and review their deck and pitch. When we feel they are ready, we make the relevant intros. We can also help think through marketplace dynamics. Should you start with the supply or demand side? How local should you be? Should the rake be 1%, 5%, 15% or 50%? Should the rake be taken on the supply side or the demand side? Should you provide extra services to one side of the market? We see so many marketplaces that we have developed a lot of pattern recognition and can help think through core strategic issues. Lastly, we can help portfolio companies with their offline advertising, especially TV advertising. William Guillouard, one of our Venture Partners was Chief Marketing Officer at OLX where we spent over $500 million in TV advertising. We developed methods to run TV campaigns the way we run online campaigns with attribution models and LTV to CAC analysis. In several cases, we successfully scaled companies rapidly though TV with better unit economics than through Google and Facebook. Obviously, this only applies to a small subset of portfolio companies which are mass market, have good unit economics and enough scale to justify trying TV, but for those companies it can be game changing.
The best way to work with us and to reach out to us. We provide the help you ask of us, but you have to be proactive and ask!
Weave a compelling story without referring to the deck and know your unit economics clearly from the top of your head.
FJ Labs’ mission is to harness the improved user experiences and deflationary power of online marketplaces to address the two defining issues of our time: social injustice/inequality and climate change.
We are based in New York, because I love living in New York. It has the best of everything the world has to offer in terms of culture, art, social experiences and a high density of super smart, passionate and ambitious people. It’s an adult wonderland professionally and personally. As the technology component fades in tech in general with the advent of no/low code, founders will come from more diverse backgrounds. The gestalt you get from the melting pot of people and ideas in New York make it a uniquely well positioned place to create the future of tech.
The city will face challenges in the coming years given that COVID is preventing it from playing to its strengths and as more people work remotely, but it will make a roaring comeback once this ends. Smart people want to be surrounded by other smart people in engaging environments and New York is the ultimate place for this.
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