“Index Ventures offered us an investment ‘we could refuse’,” Alice Zagury joked during today’s announcement of the latest partnership deal for TheFamily, the Paris startup accelerator she co-founded with Oussama Ammar and Nicolas Colin in March 2013.
There’s a deeper joke. The new accelerator’s tongue-in-cheek name and mission to give startups an “unfair advantage” are nods to the most important problem Zagury says it’s trying to solve: elitism and a lack of diversity in France’s entrepreneurial ecosystem.
“We are a generation who is frustrated,” she said – by ageism, by a lack of diversity, by the perception that only business school graduates can start companies. “The ecosystem here is toxic but we’ll try to make it good. We use the French ‘code’. We are not rejecting our culture – we play with our code but we bring it, always.”
To a certain extent, TheFamily shares the familiar accelerator format pioneered by Silicon Valley-based Y Combinator and adapted by dozens of others around the world. It invites teams to apply to join the programme in exchange for a small equity stake. Once in, those teams get access to workshops, coaching, legal support and a variety of events hosted at TheFamily’s 250m² two-storey house in Paris’s CBD.
So far, it has accepted 30 teams and aims to eventually expand that to 100 startups per year. Two teams currently in the programme have raised funding, including TVShow Time, which raised €500,000 from angels including French entrepreneur Xavier Niel. Other startups in the programme include mobile search tool Algolia, musicians’ social network Jellynote and Qapa, a platform to match job seekers with job providers.
No co-working and no “batch” model
That’s where the similarities end and TheFamily’s unusual spin on the concept begins. It doesn’t offer funding and – though Zagury suggested this could change later – it only takes a one per cent stake in the companies it supports (compared to Seedcamp, for example, which takes up to 10 per cent in exchange for up to €50k).
It doesn’t offer a co-working space and it doesn’t have a fixed start or end date for participation. It does offer a sleep-in space for visiting entrepreneurs, including Tikhon Bernstam and Adam Smith, who sold their respective startups Parse and Xobni to internet giants Facebook and Yahoo.
This rejection of the typical model is deliberate, Zagury, who previously managed France’s first accelerator LeCamping, explained. “I wanted to erase two things when I got out of LeCamping. I understood that co-working spaces were not really efficient for startups when they were building their product because they need to focus. My best startups, they had to actually go to their own house to be able to concentrate.”
The hope is that by only taking a one per cent stake, TheFamily will ensure it attracts France’s top startups. The same goes for the lack of fixed dates. “I don’t want to miss one and tell him to come back in six months,” Zagury said. Instead, each startup in TheFamily gets a customised deadline to come up with a business model.
Attracting “dark matter” – and making it pay off
It’s a bold plan and still an unproven model. But with major VC firm Index Ventures now on board and about 800 applications apparently received so far, TheFamily is quickly earning a reputation alongside more established accelerators in Europe.
The team has closed two funding rounds – a €250,000 investment from a group of business angels and the undisclosed sum (“less than a million euros”) from Index Ventures announced today. Both are used to pay for operations, not to invest in startups. In exchange, those supporters get access to deals (though not exclusive access or necessarily even first access, Zagury said).
Critics have questioned TheFamily’s own business model. According to Zagury, TheFamily now has enough to keep running for at least a year. Revenue streams so far include events, corporate consulting and brokering team retreats at a castle in Normandy. If all goes well, she’d like TheFamily to raise its own investment fund.
And how will the team solve that core problem and get a greater variety of people into entrepreneurship in France? “There is what we call the dark matter – all the hidden entrepreneurs,” Zagury said. “This is my hypothesis. Maybe it won’t be the truth but it’s my gut feeling that the best entrepreneurs are hidden for the moment. They don’t even know they can allow themselves to become entrepreneurs.”
If TheFamily can throw open the doors to artists, designers and programmers without prior business experience, accept as many teams as possible, make entrepreneurship fun and provide step-by-step education and support – “That’s the way we do it.”
Images credits: Dan Taylor / Heisenberg Media
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