SuperAngel #182: Roxanne Varza of Station F, on investing internationally and being a baby LP in venture funds

0:03Hi, and welcome back to the European VC, the go-to-podcast for everything European VC. If you love the show, share with your friends and join our newsletter at eu.vc. All right, we're here for a special episode today because it's the very first Super Angel episode that we're going to launch on EUVC. What's up with that, David? Yeah, what's up with that? It's like, what the hell? We've always done VC fund managers and GPs and now we're bringing on angels. Well, we got quite a lot of good feedback from people hearing to the Super Angel pod and many of them were actually regular EUVC listeners. So we just realized this is a no-brainer.

0:44We have to bring these on to the main European VC podcast. At the same time, of course, it's also very much in line with our ethos of connecting European venture and building Europe's GPLP community, as most of the angels on these episodes, as you'll also hear, are LPs in Europe's leading funds. So to our listeners, operationally, this means that going forward, you'll have a Super Angel episode to listen to every Friday. So enjoy. So yeah, I restate that. Every Friday you'll have a Super Angel episode to listen to. To those of you who have already listened to them, well, huge thank you. Props.

1:20Appreciate it. And secondly, you can also always re-listen to them or just take the episode and send it to someone you love. And if you are really a supporter of UBC, do all of the above. Yeah, that would be amazing. Thank you, guys. Thank you, ladies, for always being supporters of what we're trying to build. And hopefully you also feel that you're building it with us. But before we dive into this episode, let's just give a big introduction to our dear co-host for this show, Anthony Dannon. This is Anthony Dannon, founder of Cocoa, and I'm a VC turned angel. Now back to this episode's introduction, because we also want to just introduce the guest of the show, of course.

2:00David, who do we have on? For the very first episode of the Super Angel Podcast, we were joined by Roxanne from Station F. Station F being the behemoth of the French tech ecosystem that you all probably know. And Roxanne being first and foremost an absolute amazing person and super angel. Or as the French media tends to call her, the queen of tech. Roxanne is also an Atomico scout, by the way. But before we dive into it, Andreas, you did this interview together with Anthony. I didn't have the pleasure. What were your main takeaways? First of all, I think Roxanne is one of the coolest women I've met in venture for quite a while.

2:40So I'm keeping an eye on if she should ever decide to launch a GP or something like that, because then I'm first in line. I'm probably behind quite a few, actually, to be honest. I would venture to say that. But for this episode, I think my takeaway was she actually coined for me the term baby angel. I loved when she said it. I almost fell off my chair. But Andres, what is that? Explain that to someone that just fell into this episode and has no context whatsoever. It's so close to just what we talk about when we say operator LPs or operator angels or operator LP angels, whatever the terminology that we tend to use.

3:19But it's, of course, someone who brings that operator experience, the experience of actually working with founders, investing themselves and so on. And for that reason, are coming in typically with smaller tickets than what's usual. And that's, of course, the absolute resendata of the EUVC syndicates. Yeah, and that's really cool. And that, again, goes back to this topic of why the hell are we reeling this into this podcast? But also, you know, Roxanne is somewhat of a reference as an angel investor. I'm sure there's also learnings there for someone that is just doing, as I would call it, traditional angel investing into startups.

3:52Anything you'd highlight, Andreas? Yeah, so I think that this episode, as you hear it and the whole series really, you'll find that every single angel that we interview are not doing large tickets, concentrated bets, but deploying a strategy that has, you know, the potential to hit outside returns by spraying and praying, some might call it, but definitely building up a larger portfolio. And I think that this episode states it very well by Roxanne stating as one of her core learnings that check sizes actually doesn't matter. She thought it really would be something you need to bring quite a lot of capital to the table for founders to want to take your money.

4:37That turned out not to be the case, but I will not spoil more for you, everyone. I think let's just go right into the episode.

4:49Is this a dream? No, it's not a dream. I'm an angel. Why would God send me an angel? Because God knows that everyone needs a little coaching now and then. I'm loving angels. I saw an angel. All angels say for long. Please say it's me an angel. The smile on her face. Be in it together, but don't love me, Angel. You've been touched by an angel, girl. Girl. Hi, and welcome to the Super Angel Podcast. The go-to podcast for angels backing the next generation of European unicorn founders. If you love our show, do drop us a review, share it with your friends and join our community at eu.bc. Today, we're happy to welcome you to Roxanne, director of Station F in Paris and one of Europe's absolute leading startup havens.

5:41Roxanne is broadly recognized as one of the most influential figures in the French, if not the European startup ecosystem. French media have called her the young empress of startups, the queen of tech, and the new pope of high tech and startups in France. Roxanne is an Iranian-American who grew up in Silicon Valley, was formerly a journalist and startup ambassador before being headhunted to spearhead the development of Station F. If you're an angel listening in and wanting to get closer to the European angel scene, do not hesitate to reach out to us. We'd love to connect and see how we can play together.

6:16And now, some words from our beloved sponsors.

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7:52Roxanne, welcome to the Super Angel podcast. I'm so excited to have you here with us here. Super, I'm excited to be here. Hey guys, Anthony, I'm a VC turned angel with Cocoa and I'm super excited to be co-hosting this podcast with Andreas. And you know, Andreas, I'm really thrilled to have Roxanne join the show. as she's genuinely one of the most dynamic people I know. I mean, besides being a power woman in tech, which we need much more of, she's really one of the central pillars of the French tech ecosystem, which I hold close to my heart. So I'm really excited to have you join us today, Roxanne.

8:25It's a pleasure to have you on the show. Thank you so much. And Anthony, you're one of the most dynamic people I know. Thank you for that. I'll take that as a compliment. So I would love to get started, actually. I would love to start with focusing on the story and we'd love to have listeners hear your story. And can you also tell us what got you into angel investing specifically? Maybe just to backtrack for people who don't know my background. So I'm from the US. I moved to Europe about 13 years ago to do a master's degree and fell in love with the ecosystem. And I've worked at a bunch of places like TechCrunch, Microsoft, and now Station F for the last seven years.

8:59And I actually got into angel investing in 2018. It was when Atomico was launching their angel program. and I was one of the first people to be in that angel program. And I remember just thinking angel investing is so cool, but I'd never done it. And it felt actually really scary and especially it's Atomico's money. So I was like, I can't just do any deal. It has to be like an Atomico worthy deal. And I was so stressed about doing the deal that like, I think a lot of time went by that I didn't deploy. And then finally, Sophia Benz, who was running the program at the time came out and she's like, don't overstress, deploy small checks, a lot of them.

9:38And that kind of really helped. It was some really great advice that got me going. And so now it's been quite a few years later, scouting for Sequoia, doing some personal checks, and I'm sure we'll get a chance to dive into all of it. Could you expand a bit, Roxanne, on that, you know, philosophy of deploy small checks and a lot of them? Could you just take us through because you said that was a bit of an eye opener and what got you going? How do you think about that? Yeah, so I think I had kind of this really naive perception at the time that it was the check size that people were going to sign up for.

10:07And so Atomico, I think they've probably evolved the program since, but at the time they were giving 100K to their angels to deploy in minimum two companies over 12 months. I think that was the deal. And I was thinking, well, if I want to have maximum impact, if I want companies to accept my checks, I should probably be doing big checks, like 50K in two companies. And that just stressed me because I was like, well, then for 12 months, I have to just pick two companies. And Sophia was like, no, no, no, no, no. Like, just think about this. You kind of want to just get your hands in a bunch of things.

10:40And in order to be able to do that, you have to think much smaller. And I was surprised to see that actually the check size was not really the issue. And it's more about really having a good connection with the team. And so that was some really great advice that she gave me. Yeah, that does resonate with me as well. Like having been an angel for the past two years on kind of the plethora of deals you want to do. And they do say you can't have really favorite babies, but any memorable deals you want to share with us, maybe a company, what they do and why you invested. That'd be great. So memorable deals, I have a ton of like what I feel are memorable deals.

11:11I think part of it comes from how the deal was done. So I've had actually two of my favorite deals were actually deals that initially I turned down. And afterwards I had like, it's like FOMO or regret or what, but I was literally, I also loved to, I think the response to the rejection, I don't know if I want to call it a rejection, but just me turning down the deal. I really loved their response so much that I was like, oh, maybe that's actually somebody I want to back. A lot of humility, people asking for feedback, wanting to learn, still wanting to keep a dialogue, a relationship. And even in some cases, people just coming back with like, okay, you didn't give me money, but what else can you give me?

11:52And I actually think that those are people I'm like, oh, maybe I should back them. Two of my favorite deals I've actually backed later after having said no to the first discussion. Some deals that I have really loved is one deal that I've, or two, is an initial deal where the company actually didn't end up working out. The founders split up. And today I've backed both of their new companies separately. And I feel like the second companies for both of them are quite solid. So I'm really excited to see also that maybe it doesn't work out the first time, but it's really a long-term relationship and a long-term play.

12:28And so I'm really excited about what these two now separate co-founders are building independently. It could resonate to me as well a lot when it comes to not picking the babies, but also the learnings that you shared. But what about if you take a step back, right? Now you've been doing that for a couple of years. Looking back, what would you say angel investing has given you both professionally and personally? besides interacting with those awesome people? Such a hard question. So I do think interacting with awesome people, it's like having access to also the angel community and doing deals with people who are angels.

13:04Often I feel like those are also, you know, you have a lot of experienced entrepreneurs in those communities. And I think being able to see how they think and what decisions they make is super valuable. It's something that I didn't have access to before. Like when we go through, you know, startup programs and picking companies, it's very different than when you're making a decision to invest where I feel like you really dive in to a lot more elements and on a much deeper level. So I think that's one. It's also kind of given me a different, like you kind of a little bit more of an insider into some of the companies.

13:38So the relationship, I would say that it's kind of just brought me closer to entrepreneurship. Even though you're not the founder, you're just kind of seeing the business from a very different level than when you're not an investor. That's exactly it as well, right? Like the difference between having been an operator and founder versus being an investor. Do you think you stretch similar muscles with the two or is it very complementary to the skill set as well? I mean, obviously you're not necessarily operating for the business. So it's one step removed from operating, but you actually get a better view of the businesses that you're involved in as an investor.

14:16So when you're not an investor, sometimes entrepreneurs, when they talk about their business, they feel less comfortable sharing actually, how is it going? And, you know, stuff with the team and some of the metrics and this strategy didn't like, you won't actually get so much insight. So I feel like in a way it's complementary to operating. And I do feel that also the operating experience can really be leveraged for some of the companies. So that's also really interesting to see. Roxanne, now I want to shift this into what is probably my favorite part of these interviews, or at least one that I like a lot.

14:49And that is diving into your investment thesis and strategy and approach. So if you would just give us an overview of kind of how you think about your investments, what number of investments you've done, what active investments you have right now, how do you think about, you know, the makeup of your portfolio? Do you want all of them to be in the same vertical? Would you rather diversify a bit more? How many do you want to lead? How many do you want just want to co-invest in? Do you want to take board seats? Do you not? All that kind of thinking around that. Oh, no. It's not about the thesis.

15:27Wow, that's like way more developed. Everything that Andreas just said. No, so I think to kind of hash it out, I don't even think about it as a thesis. I think about it as just where am I comfortable as an investor? And it took me a while to get there because when I started, I mean, I've been in touch with entrepreneurs for so long and on such a different level. and there's just so many great people that you meet with great ideas and you can just get so excited and be like I want to back you and you and you and it took me a while to figure out actually where do I you have limited resource and limited time where do you really want to spend your effort and that's something that I think I had to spend time to realize I'm really comfortable with France based businesses even though I have a network that goes beyond that this is a market that I feel like Like I know it took me a while to, I mean, everybody loves talking about like really game changing deep tech, not an area that I'm super comfortable in.

16:23An area that I love is way more boring than that. It's B2B, SMB tools, SaaS, HR tech. I've done a ton of. So, you know, it's stuff that I just feel like I understand the pain a lot better. And I have a like potential market at Station F that, you know, we need to test things or ask people, like people are willing to contribute. So I feel like I can also bring more value. So I would say it took me a while to get to that. And then also how I receive and evaluate deals also took me a while to get comfortable with. So, you know, I don't obviously do a lot of cold stuff. I look at also who can the entrepreneur surround themselves with, what kind of credible people.

17:03Usually I like to know people personally that are backing them to be able to bounce ideas around. I know other investors that are looking for like a big brand name or a lead VC or something like that. So I do look for a little bit of credibility. It's taken me a while to kind of even get to that point. I don't take board seats today. I'm on the board independently of two other companies that I haven't invested in. Why don't you take board seats? I think my checks are so small. And also I've done a lot of deals. So you asked me to share some numbers. I've done 45 deals to date across Atomico, Sequoia and personal checks.

17:38That's a lot of companies having to pick where I would spend my time would just be impossible. And so, yeah, I tried to also like dive a little deeper into the numbers to be able to share with the listeners. So I've done a couple deals as a baby LP in different funds. I've done a couple of non-tech deals. So I do go outside my comfort zone, but majority of the stuff tends to be in the comfort zone that I just mentioned. I've invested in two X Station F employees. So people that actually I've worked with and I've seen them. I love being able to invest in those kinds of people. I have about one third of the companies I've invested in that have gone to series A or series B stage today.

18:17And one company I think that has officially wound down to date. And then 12 female founders. And I cover a bunch of geographies, even though I talked about France, I've done stuff all over the place. So I can also talk about a little bit what happens when you go outside of your normal geography. Yeah, for sure. I'll do the flip side of what Andrea is asking you about the board. I'll say the opposite. How do you think about with 45 companies scaling yourself on the portfolio support side? In my experience, I've found that the most valuable help I've been able to give to companies has been inherently unscalable, so like emotional support.

18:57But how do you think about that or trying to be helpful in so many companies if you can? What I imagine I bring to most of the companies is network. If they're looking for introductions to people, I'm very happy to open those doors. That doesn't take a ton of time for me and people, it's very non-scalable. So people have to tell me who they want to meet and it's very easy for me to put them in touch. I think the second thing that I probably bring is, you know, people are looking for stuff around communications, marketing, they want to test it on a specific population, that's stuff that I'll just do one-on-one with the given company.

19:34Not super scalable either. And then I've done investments where just like, I accept that I bring little value to it. And I'm just waiting for the entrepreneur to tell me where I can be helpful. I've also found myself that sometimes the founders I want to help most don't really need my help because they're just on it and ahead of me. So it's a fun controversy there as well. Would love to dig deeper as well on the due diligence side and how you think about evaluating those companies as well. Also, including kind of, you know, the wisdom of the crowd, right? Do you have peers, other people you use to assess those companies?

20:10And how do you go about that would be fantastic. I have to always speak to the person 30 minutes, but I won't accept a call without seeing a deck. And I know that there's entrepreneurs that try to be like, oh, well, I don't show a deck without being on a call and I just, I will just not accept it. So I usually see a deck, then I jump on a call and usually I'm trying to get from that call, everything that's not in the deck and entrepreneurs always want to show me their deck on the call. So I'm like, no, no, no. Tell me the backstory. Tell me how you met. Tell me, you know, all the stuff that you didn't put in, in the deck.

20:40Cause I got all the numbers and the sexy logos from the deck. And so that's really what that 30 minutes is about and trying to really understand where they shine. What have they been able to do? differently? How are they thinking about things? How are they thinking about their next step? You know, and I think also just trying to challenge them and see how they respond to some challenges and stuff like that. So that's what I'm trying to get from that call. But there will be a lot of stuff that I walk away from like, I didn't understand half of it. If I'm still feeling like this could be something really interesting and I want to be a part of it, I might bring someone else or ask a couple people in my network, can you take a look at it?

21:16Have you heard of this company? And what's really funny is a lot of the time I get a response right away. Yeah, I know so-and-so looked at it. They loved it. This person's considering it. So those are really good signs. And if I have people that are just like never heard of it, didn't talk to them, you know, usually that's either it's super early and I'll tell the entrepreneur, come back when you have some validation or it's just not picking up. So I think those are also signs to pay attention to. I love that. So basically developing own conviction, but using basically your peers and network to kind of enhance your due diligence.

21:46Yeah, exactly. Yeah, exactly. Makes a lot of sense. So Roxanne, you said two things that obviously to anyone who knows EUVC are very close to my heart. So you said, and I love the term, I'm a baby LP in a couple of funds. So I need, of course, you know, we're doing syndicates into funds with the explicit thesis that LP tickets can be quite valuable for angels to do. So I'd love to hear, you know, what you have gotten out of that and how you think about those tickets, why you do them. Also, if you're able to disclose any of them that you've done, then feel free to name them. But otherwise, tell us how they fit into how you think about your investment activity as an angel.

22:25Sure. So actually, I think I do them one to learn first and foremost. And then the second one is obviously if I'm obviously there also hoping not to lose my money entirely, but do have to be comfortable with the idea that I could lose it. So I think, yeah, I'm happy to disclose three that I did. weekend fund. So Ryan Hoover's fund, Spice Capital, which is Web3. It's an incredible solo female GP in the US. And then Origins, which is this fund, kind of they have a very interesting model, but it has a star football player from France who's one of the GPs. And I found that really very interesting because it's looking at leveraging his audience to support the businesses that they invest in.

23:07So yeah, I think really what I'm doing here is also to learn from those investors who are really deploying at a very different level and scale than some of the angels in my network, how they're also seeing deals. And a lot of these smaller funds, I feel like also take the time to share their deal flow, share their analysis, share why they turn this one down, why are they investing in this one? And I think the reporting potentially goes into a very deeper level as with maybe some of the bigger funds. I'm not an investor in a ton of big funds, so maybe that's something that is not the case. But it's also been really eye-opening.

23:45For example, the Web3 fund that I invested in is not an area that I know really well. And it's been incredible to also watch how she's been evaluating the market. It's just amazing. I think we need more LPs like Roxanne, to be honest. And no, I'm not saying that other LPs are not good. I'm just saying, you know, we also made the conscious choice at Cocoa to make sure that like majority of our LPs are either founders or operators like Rooksan. Because essentially for us, what that ends up being is, you know, they're a source of great new investments for us because they're in the flow of what's happening.