Recently, we had the opportunity to connect with Julien Coustaury, Managing Partner at Fil Rouge Capital, a venture capital investment firm situated in Croatia. We’re immensely thankful for the valuable insights he generously shared with us.
If you’re exploring investment prospects, be sure not to overlook this interview—an opportunity to delve into the world of investments.
Trends in the VC world
1. What is the trend in the VC world? Do VCs prefer high growth or moderate, safe growth when evaluating startups as potential investment opportunities? And why?
Things have clearly evolved – for the better – in 23. After the tech hype of 21/22, valuations have become much more reasonable and investors are looking much more at “safe” growth rather than “hyper” growth. Sensible unit economics in growth is what matters now, for the better, in my opinion.
Investment criteria and red flags
2. What do you look for in a startup when evaluating it for potential investment? What is a key factor for you when making an investment decision? Have these criteria changed in the last two years (economic decline, high interest rates, geopolitical events)?
Not much has changed for us. At FRC we have been in the business too long to “buy” the hype and our criteria have not changed. Obviously, it depends on the stage, but the team always takes center stage when deciding whether or not to invest. The biggest change is the significant lack of Series A/Series B in our region and in the world in general, so whenever we invest these days we always consider the question: “What if this company can’t raise any more?”, in other words, how far are they from / how can they reach break-even, are their unit economics sound enough that they can support more moderate growth while still hovering around break-even.
3. What are your »red flags« when searching for investment opportunities?
At FRC, we like to have a very equal relationship with founding teams. We are big believers in getting married for better or worse, so we love to see the right ambition, maybe sometimes a little arrogance towards the market, but with a lot of mutual humility when it comes to your investor/investee relationship. Lack of humility or playing hard to get or hyping too much are the red flags that trigger a pretty immediate and radical decision to stop all interactions, no matter how much we like the investment thesis.
How to spot an excellent VC
4. What are the characteristics of a great VC? What are the signals to recognize them? What should startups look for?
Look no further, check out FRC for characteristics of excellent VCs! All kidding aside, we are a marketplace that manages supply and demand, so we have 2 perspectives. For our LP’s, an excellent VC is one that returns the money they invested. It is crude, but that is what we are about on that side of the equation, we are a financial product. On the demand side, which is the startup side, I think the best VC is the one that gives fast, firm answers. I think that is where we are most different from our competitors. Whether you get a yes or a no, we are the fastest VC in the world to get it to the founders. Gray areas are what kill startups.
FRCW24 accelerator program
5. You have just opened the applications for the FRCW24 Accelerator program. What is this program all about?
This is our standard accelerator program in terms of content: about 10 weeks of light touch seminars and office hours to get you started. The biggest difference is that this is a free program. Since we are in between funding periods, we cannot invest, so we thought of running an accelerator with a view to investing towards the end of the program (when we should be funded).
6. What can startups benefit from this accelerator program and in which elements is it different from others?
We are basing our accelerator on the YC model. It is light touch, focuses on office hours to get you guidance on various aspects of the business and possibly your first customers and later some investors. I guess the main difference from other accelerators is that it is a very light program, we are not school teachers, we want founders to work on their company, their product and possibly their revenue generation, so we run our content online, 2 days a week in the evening. We have invested in over 100 companies and the feedback is great.
FRC at Podim
7. What kind of startups are you looking for at Podim?
We believe that 2 revolutions are coming. One, AI, is a bit more on the way than the other: quantum computing. Our fund is focused on those new technology enablers that we believe will drive the new wave of revolutions.
8. Fil Rouge Capital is also a long-term partner of Podim and your team will spend two days at the conference looking for promising startups and scaleups. What’s your message to them?
If you are doing something, whatever the sector and whatever the stage, as long as you are brave enough to do it, just get in touch with us. We will be in the Deal Room with 3 partners, so just book meetings, we want to meet you, because before the end of the year we will have a lot of love and money to give, that is how we are!
