Des leçons qui valent des millions avec le pionnier du seed - Jeff Clavier

We do 30% in pre-seed and 70% in seed. So the difference is, pre-seed is basically the entrepreneur with his idea and no code, so really at the very beginning. Seed is about a year after pre-seed, so the entrepreneur, a team of one or two engineers, a bit of code, a bit of feedback on the product, and so that gives us an idea if it's starting to work, but it's still very, very, very, very early. So here we are at MPK, at Menlo Park, right next to Meta on Sand Hill Road, which is a legendary place where you have tens of billions in different buildings, one after the other. And so you come in, you just explained to me, we're going to dig into this a bit, but in pre-seed and seed, what does that mean? You explained to me, a pre-seed, at what point do you finally have a PowerPoint, more or less, an idea?

Yes, you have a PowerPoint, you have an idea, it's an idea, it's a story, it's an entrepreneur's experience, and you say to yourself, what is the probability that if it works, if the entrepreneur succeeds in building this product, we will be able to develop a company that will one day be worth billions of dollars by generating hundreds of millions of dollars in revenue. But there are prerequisites. You have to be ENF. If I'm 20 years old and I haven't studied and I come with a great idea, you can go for it, or you have to have gone to Harvard, be a white male, obviously, and be 35 years old and have started companies. Basically, we're going to look at the experience and the background, but also the motivation of the entrepreneur. We're going to look at the idea, why this person in particular has this passion to spend the next 10 to 15 years building a company that we hope will change the world. Very few succeed. And it's a mix of everything. It's true that you're tempted if you see someone who has done a bit of Google, a bit of Meta, and is going to start a company in artificial intelligence, well, that helps. But the youngest entrepreneur we backed, I think, was 17 or 18 years old, and the oldest was 55, and two succeeded. Neither one nor the other. And today, most of our entrepreneurs are between 25 and 35 years old.

Okay. So Jeff is not my real first name. My real first name is Jean-François. My mom gave me a super long name, and when you live in the United States, they don't know how to pronounce Jean-François, they call you Jean. And so I used an Americanization of my nickname, which was JF. And basically, I moved here in the year 2000. Before that, I studied computer science in Paris, I started a company in the financial markets, the company was bought by the Reuters group in the 90s. I was the CTO. I took on a lot of responsibility at Reuters, I had groups that I managed in Paris, New York, London, Palo Alto. That brought me here and to discover the Valley, and objectively, it's great here. And so my wife, who is French, and I had the idea that at some point we would move, and the opportunity came in 2000. I became a VC here, so I changed, basically I went from City to here without any financial experience, without an MBA, which was a bit weird. But the Reuters fund had invested in a lot of Internet 1.0 companies, and when the Nasdaq crashed in March 2000, they had to do something with the portfolio. They needed an operator, and they offered me to join them. And so I became a VC to help with portfolio turnaround. So VC, venture capitalist, turnaround, it's about turning companies around. The idea is really to come in and try to see what you can save, because it wasn't pretty, it was a real crash. It lasted 4 years. And after 4 years at the Reuters fund, I decided to leave to create my own company. And it was a fund management company called Softech VC at the time, which didn't mean anything as a name, so we renamed it Uncork Capital 8 years ago. And I imagine you'll have other questions about that.

It was a video search engine called Truveo, T-R-U-V-E-O, before YouTube. So it was in 2005. And what the company did was, they had a crawler that would find code snippets that played videos, they would index the videos, and they had a page where you could access all the videos on the web. There were very few videos on the web at the time. And so the company grew and it was acquired in a very surprising way. It was acquired after 10 months and 3 weeks by AOL, with Fox Interactive trying to buy it too. And so there was a small auction, and the company sold for 50 million, which means that in less than a year, I returned 17 times my stake on my first investment.

I put in 50,000 dollars.

Ah, yes. Okay. The first fund, let's call it Softech, it was the money we had made with my wife in our startup at Reuters. So we didn't make a huge amount of money, and so we decided to take 250,000 dollars of our savings, and I was going to spend about 1 to 2 years investing it, 25,000 dollars here, 50,000 dollars there, and we were going to see what it would give.

At the time, no, because we didn't have the green card yet. And so she didn't have the status that allowed her to work. We received the green card a few months later, and she joined Stanford in December 2004. And after that, she stayed at Stanford for 18 years.

Yes. It's completely crazy. When we announced it to our parents, they said, 'But what... we don't even understand what you do, but this is nonsense.' No, but it's sure. And it's completely crazy. With all due respect, Jeff, did you come out of it well? But especially, to come out of it in VC before 6 or 7 years with a bit of money, it's quite utopian. It rarely happens.

No, that wasn't the goal. The goal was to build companies that would last. The only thing that created Softech, that allowed the creation of Softech, is that I started investing in Web 2.0 just as Web 2.0 was starting to come out. And at the time, 4 years after the Web 1.0 crash, you had a lot of Web 1.0 companies that had survived, who said, 'We need to understand what Web 2.0 means.' It's lighter, it uses open source, it uses servers that aren't ours, etc. It was a technological revolution and a new generation of user interfaces, services, etc. And so they said, 'We're going to acquire them.' And that's what allowed me, without wanting to, without planning it, to invest in about 24 companies in 3 years, and about ten were acquired within 2 or 3 years. Which means the 250,000 dollars became 500,000, became 1 million, became much more in record time. Which you don't see today, because when I invest now, I know I won't have an exit for 10, 12, or even 15 years. And so it was super weird, it wasn't supposed to happen, but it did, and that's what allowed me to build a track record and then raise my first institutional fund 3 and a half years later, which was one of the first seed funds in the world.

Today, the startup market is much more mature than it was at the time.

More mature means that at the time, in 2004, 2005, you had about a hundred startups. Today, you have 60,000.

No, no, in the US. In the US, you have 60,000. We went from 10,000 to 60,000 in the last 14 years. So in 2010, we had 10,000, now we have 60,000 that are private, so not listed on the stock market.

Acqui-hire is an acquisition by hiring. But if you have a technology, a bit of revenue, and the company that's going to acquire you thinks they can really boost their activity thanks to you, then they're going to pay a good price. You have a company called Bridge, which wasn't one of my investments, that was recently acquired by Stripe for 1 billion dollars in stock. Well, the guys launched the company 2 or 3 years ago, they had 12 million dollars in revenue. It's a very, very beautiful acquisition. And so the investors in Bridge are going to have a good return. They have to succeed in selling their Stripe stock, but basically, in 3 years to get an exit like that, it's really good, it's very rare today.

Well, it's a private company, so by definition, you have no exit. You have to wait. Since it's a big company, they've already organized what we call secondary transactions, so people buy these shares over the counter. That means if you want to sell your Stripe stock, you can be liquid in 6 months, a year. But objectively, if I received stock in Stripe, I would wait for the company to go public, to be listed on the stock exchange.

Well, Deel is a very beautiful company. The question is, when you've raised an enormous amount of money in the best times of VC, and the market contracts, the valuation doesn't mean anything anymore.

Well, basically, it's two things. One, it's a reality for the value of our own companies. That is to say, we have a lot of companies that raised at over a billion in valuation in 2021, 2022, and the market crashed, multiples compressed, and so unless the company continued to grow and raise money very recently, which is not the case because by definition, if you raised a lot of money in 2021, you didn't need to raise after, your mark, as we call it, doesn't mean anything anymore. And so you have to use other mechanisms to say, 'Well, this company was worth 1 billion, but basically it's worth 300 million.' It's the case for many, it's the case for all the companies that raised in 2021-2022, they probably lost between 30 and 70% on the mark they had. We've marked down a lot of our companies. There are one or two that have actually increased their valuation, but it's through funding rounds that happened more recently.

Well, you take a virtual hit. That is to say, by definition, you haven't exited, so you haven't sold anything, so your value isn't X, it's 70% of X. But in the end, what counts is the terminal value, and we're far from the exits of these companies, because today we're in an extremely compressed market, there are very, very few exits. To date, there haven't even been 70 billion in exits in the US in 2024. There have been about 50 IPOs. Normally, we're at 10 times that, 70 billion versus over 500 billion normally. And so people stay in the companies, continue to develop them. People stay in the companies too long. I'm not an investor in Stripe, unfortunately, but there's no real reason for Stripe to still be private. There's no reason for Databricks to still be private. These are companies that should... there are about 1,000 to 2,000 private companies in the US that should already be public or should be listed on the stock market. And so that has created an opportunity. It's a question of who is going to capture the value of the company and its growth post-market. Before, it was clearly public investors, and then private investors said, 'Wait, I want to capture more of this value creation.' And that's why we saw these funding rounds at tens of billions of dollars in valuation, because people say, 'If I invested in OpenAI at 150 billion, I'm going to make another exit.' It's funny, that's what Françoise Broger was telling me, I don't know if you know her, with whom we recorded yesterday. She was telling me that when you go public, in many cases, most of the value has been captured by all the pros before. And that's the problem, public investors, the general public, well, it's hedge funds, it's mutual funds, they're going to say, 'Wait, why should I invest in this thing that has no more growth, that is almost profitable but not really?' And so why should I take it? And that's the problem, we waited too long, there was too much activity in the late stage, as they say, near IPO, and we should leave much more of this value creation in the public markets so that they accept our companies. Because today, to put a company on the market, you need about 350 million dollars in revenue, growth of about 30%, with profitability in a few quarters. There are very few companies that do that. 350 million dollars in revenue, 30% growth per year, it's hard. And a few quarters of profit. It's super hard because before, the companies I invested in went public at 100, 120, 150 million dollars in revenue, a bit more growth, and then profitability was a concept. Because today, you know that the more you want to grow, the more you invest in advance, and that's what being public is for. And there are plenty who have proven that it works. Uber, well, not WeWork in this case. No, but look at Amazon. Amazon was a 100 million dollar company when they went public. And it was an IPO of a few tens of millions, it was barely what we'd want now for a Series B or Series C. It's true that Amazon, for a long time, everyone criticized the company saying it's nonsense, it will never make money, etc. But today, it's still... and that was done quite quickly. What's quite crazy is that there was this phase of non-profitability, it hasn't been profitable for that long, Amazon, Wall Street was spitting on it, but they didn't need to be profitable. That's the thing, it was a phase of investment. And I remember when Amazon diversified by launching AWS, which is their service that allows you to do cloud, so not having your own servers and using Amazon's servers for you, which are ultra well-made, secure, etc. And basically, they built this infrastructure for themselves because it was a huge website, a huge set of services, and so they said, 'We have a real expertise, and so we're going to sell it.' And it was great because clearly, it's one of the best operators. And Google did the same thing, Oracle did the same thing, Microsoft obviously. But it was a diversification that was a bit weird but made a lot of sense.

So at the very beginning, when I started, I was writing a check for 25 to 50,000 dollars. Now I write a check for several million, because at the time it was my money, I didn't have much. Now we're investing from our 7th seed fund, which is a 200 million dollar fund. So we're going to make about 30 investments in this fund over 3 years, so 10 per year, 10, 12, roughly. And we're a team, we're five partners, so each partner is going to make 4 to 6 investments depending on what interests them, what they see, etc. And so a pre-seed round today in the United States is going to be 2 to 3 million. So that's the total round. We're going to take more than half the round, we're going to buy 10, 12% of the company. So it's on a valuation of 15, 10, 15 million, a valuation that will be between 10 and 15 million. It's very rare today given the level of competition. We invest at valuations under 100 million. The competition is the other funds that want to get in, it's the 2,000 seed funds that exist in the market. That is to say, the second fund I raised in 2007 was one of the very first seed funds in the world. Since then, 2,000 companies have been created to do the same thing. And so, a pre-seed round for us is 2, 3 million. Yes, it's going to be the first, so we're going to create the company, we're going to incorporate it, we're going to open its bank account so we can write the check. That shows you we're really very early. You're almost co-founders. We're... well, not operational. We're funding investors, co-founders in the sense that we're there to support, to help the entrepreneur, but we're investors, we're on the other side, and we're not there to be operationally involved. And that's a big difference in what we do, is we're going to have a portfolio of investments, each partner is going to have, you know, half a dozen to two or three dozen investments. I have more because I've been doing it longer. And so you're going to share your time across these companies and you're going to help as much as possible. You're going to spend a lot of time on the companies that need you, because they're doing a financing, because they're being acquired, because they're acquiring a company, etc. But you're not there involved in the company directly. So we're funding investors when we invest at the seed level. So maybe a year later, 9 months later, the round is going to be a bit larger, so 4, 5, 6 million. Again, we're going to be more than half of that, so we're going to write a check for 3, 3.5 million, we're going to buy 10%, 12% of the company, and the valuations are going to be, you know, 18, 20 to 30, 35 post.

Yeah, it's not the same market dynamic. It's also perhaps different ambitions. And when you have someone with a super profile and where you have a huge number of people who want to put money on the table, either you try to get the lowest price you can, but you risk losing the deal, or you know at what price the deal is going to happen and you go directly at that price so there isn't too much negotiation.

If they come to set up here. Okay. Why? Well, it's two things. One, it's proof of ambition, because a company in France that stays in France, nothing tells me they're going to go after the global market and that they're going to be competitive, even though I know very well that French engineers are extremely good. Nothing tells me they're going to have the desire, the ambition, and the attitude that allows them to win in the market. And so, relocating to the United States, which is extremely difficult personally, is a real commitment. It proves they have grit and they're going to go for it. And the only French people I've invested in to date are French people who moved here, who started their company here, who succeeded here. Mathilde Collin, Front.

I don't have... we have a huge number of Europeans in the portfolio as founders, but we don't specifically look for French people. For us, we try to take the deal flow that comes to us. We see a few thousand companies a year, a few thousand, 3,000, 5,000, 6,000, I don't even know, it's between 3,000 and 6,000, something like that. I don't even pay attention because we see them coming, we say no to 90% of companies literally in the space of 3 seconds.

Well, I receive, you know, I received an email this morning, it's a guy who says, 'Hi, I'm an Indian entrepreneur, I'm based in India, I'm moving to the United States, here's what I want to do.' And for me, the fact that he's not in the United States already means I say no to him, and I have a template that replies, 'I don't invest in your geography.' So either it's a sector I don't invest in, or it's a stage I don't invest in. So you send me a Series A, a Series B, a pre-seed, whatever. Or it's a sector I don't invest in. Well, as a fund, we have an extremely broad perspective on the market. We invest in enterprise software, so today it's a lot of AI. Enterprise software is software for companies like Salesforce, like I don't know, Pipedrive, or many others. So SaaS, CRM, sales enablement, etc. So that's 70% of what we do, B2B Enterprise as we call it. Today it's a lot of AI. We also do a bit of consumer and marketplaces. And then for me, for almost 3 years now, I've only been doing deep tech, so things like space, quantum computing, a bit of crypto. I invested in a company that is basically the Tesla of construction equipment. So they make an excavator that's all battery-powered and will eventually be autonomous, without a pilot. So it's very varied. So we have a broad perspective on the market, so it's rare that we say, 'That's not for us, we don't do that.' But for example, we're not going to do a lot of investments in healthcare. So even if it's a huge market, it's not a market we know well. And so you invest in things where you're able to make a decision that this person pitching you a particular idea is going to be able to build a big company. And so once we've gone through all the criteria, it's also whether the entrepreneur's profile matches what I think a company needs for a given project. And so if I don't see why a particular entrepreneur or team is going after a particular problem, you know, I had the case this morning or last night, a company that is pursuing the microbiome, so the inside of your digestive system, the microbiome. The CEO, she really has an interesting profile, but her team looks like a team of bus drivers. So I took... and it's super subjective, but unfortunately I don't have much time to analyze most of the plans that come in because there are dozens and dozens. So you still have a filter on that, a bit intuitive, a gut feeling, you say it looks like bus drivers. I don't have time to dig a little deeper. We've invested in 275 companies in 20 years, so we've seen hundreds of thousands of startups, and basically I screwed up like crazy on between 5 and 10 that I should have invested in. Unfortunately, it would have made an enormous change in terms of fund performance. It was Uber, Airbnb, LinkedIn, Twilio, etc. And so you need to remember precisely each time why you declined that deal.

We're in June 2010. Uber is going around raising a seed round of 1 million. We're in the meeting room of one of my companies called Eventbrite, which is one of my... one of my successes. Ren, right? Ren, who we received exactly. That doesn't surprise me. And so my friend Ren lends me a meeting room, and so Travis Kalanick and his co-founder pitch me the idea of Uber. And I knew Travis for a long time, and I knew he was a guy who was a born entrepreneur. So already, you know, it's okay, I'm listening because I know the guy is a bit crazy, but he's very good, quite crazy I think. And I like it. It seems interesting to me. And I say to him, 'So you're CEO?' He says, 'No, no, I want to be CEO of another company.' And so there's this guy, Ryan Graves, who they met on Twitter, who is going to be the general manager of Uber. I say, 'What are his qualifications?' He's a guy who did tech, and then more or less randomly they met him. And so for me, that killed the deal, because if Travis had been CEO at the time, I would have gone in directly. But with this random guy, you know, and this guy Ryan is really very, very good, he's a multimillionaire and now a multibillionaire thanks to Uber, but for me, it didn't work. So I passed. I asked Travis, I said, 'Are you going to be CEO of this company at some point?' He says, 'No, that's not my objective.' A few months later, he left the company. So that was in June, so I passed. And after, so sorry, but clearly what you're saying, a lot of things on which I, in companies I've invested in or companies I've created, I've been asked if I was going to be CEO or things like that. In fact, it's super important when the person in front of you, you're all in, you love their project, it's great, and you say, 'You're going to be CEO?' and they say, 'No,' well yes, it means... what does that negative sign mean? So that was the first time. 15 days later, Jason Calacanis, who at the time organized a kind of angel salon where companies came to present to a group of angels, presents Uber to us. And so Uber presents, and so my friends from First Round Capital, who had put in 500,000 dollars, were there, and they say, 'Has anyone invested in this company?' and the guy says, 'Yeah, me, and you should too.' No, it's not Travis who's going to be the CEO, I don't know, whatever. So that was in July. In September, I have lunch with another partner from First Round Capital, and there's 100,000 dollars left, and that's what's completely crazy, is that Uber, which is by definition one of the most beautiful startup exits we've ever seen, took almost the summer of 2010 to raise their round. They finished in 3 weeks or days. No, because people, there was much less money in the system, and it was a bit of a crazy idea. And there was 100,000 dollars left in the round. And so I say to the partner from First Round, 'Listen, if there's 100,000 dollars left, I'm going to take them.' He says, 'Well, hurry up.' I email Ryan, the guy I said no to, I didn't say he was a bad guy, I'm joking, I said no, but you... if I say that, I'm joking because clearly you also did an honorable thing because he got... well, he got something, in any case he took it. And so I send him an email, 'I hear you still have 100,000 dollars left in the round, if it's okay, I'll take them.' Super excited, I thought a lot, I made a big mistake passing, I'm sorry, whatever. I don't say I should have backed your project, whatever. And he says, 'Oh, that's great.' And I say to myself, 'Ah, maybe I'm going to get a piece of it.' And then, well, finally no, because that was a Friday, and on Sunday or Monday he writes to me, 'Yeah, listen, the last 100,000 dollars, we're going to give them to someone from the industry.' And so, 'Thanks, but no thanks.' And objectively, it's not that I had such conviction that I said, 'No, no, I want to invest, I want to invest, I want to invest.' And so, well, for me, the 100,000 dollars went to someone from the taxi, limousine industry, whatever. And I'm telling you these stories because unfortunately, I've had to tell them a ton of times because people say, 'You passed on Uber?' 'Yeah, three times.' And you know, I tell you the story, and then there's a guy at a dinner of investors several years later who is pissing himself laughing. And I say, 'No, but it's not funny.' He says, 'Yes, yes, yes, it's funny because actually the 100,000 dollars didn't go to someone from the industry, it's me who got them.' And so it's a very good friend, Ben Tregoe, at Founders. It's a founders' fund. He lives on his island. No, because... no, no, they did very well. And 100,000 that would have turned into how much, do you think, today? 100,000 dollars is tens of millions, or even hundreds. Well, the exit valuation, I don't know, it's between tens and hundreds of millions.

I don't know, 10 maybe, or no, no, no, they were in the 50, 60, 70 range.

Yeah, but it's a... yes, but no, because you don't want to do something that fast because you pay taxes on short-term capital gains, so the short-term capital gains, and you get massacred because basically the taxes take 50%. So what you want is to have at least a year and a day so you pay long-term taxes. No, the goal is, you have two things you're going to look at. One is, what is the rate of return on the investment in terms of multiple. After, you're going to look at the percentage, because if you're going to generate 10x in 1 year and you're going to generate 10x in 10 years, it's not at all the same rate of return. And in fact, the investors who put money with us, what we call limited partners, are going to have portfolios in the public market, they're going to have bonds, they're going to have all that. And so what they expect from us is a rate of return that is, you know, in the 20, 25, 30% or more range to justify the fact that when you put money with us, it's super illiquid, you're going to have to wait. Before it was 9 to 10 years to get your money back, today it's literally 12, 13, 14, 15 years. So the rate of return is compressed, and so for you to perform, you really have to return multiples that are really important. And so you're going to measure the multiple you generated. So I invested a few million in Fitbit, I returned the fund thanks to Fitbit. But at the end of the day, it's the amount of profit you're going to look at. That is to say, did you return tens or hundreds of millions or billions to your investors? And it depends. Anyway, when we invest in seed, we're going to put in reasonable amounts, so you know, we're going to have a few million or 10, 15, 20 million in a company, and what we hope is that we're going to make an exit and return hundreds of millions on that investment. So Fitbit, Eventbrite, Postmates, Poshmark are companies that have either gone public or been sold for billions of dollars, and they're...

Companies that allowed us to have very strong performances for the first funds we raised. And today, like everyone else, we are in the queue for the most recent funds. We have very, very valuable companies worth billions of dollars, but with zero liquidity. We are waiting for the market to open so we can take them public, which is our default ambition, or for someone to decide to acquire them. Objectively, it would be simpler, but today we are in a regulatory regime in the United States where any acquisition of a few billion dollars will be questioned by the DOJ or the FTC. It will take months, even years, to be approved. It's a huge pain.

Unfortunately, it's one of the major flaws of the Biden-Harris administration. They put someone in charge of the FTC who is extremely aggressive, claiming it creates monopolistic situations, which objectively isn't the case. But if you're in my seat, you say no, I want a free market where companies get acquired, we make a lot of money, it creates innovation, and so on. Because today, we are stuck.

From Zero to One.

And so, I mean, we're getting to the end of that because yes, but it's yes and no. What you want is to have one or two big players in the market and enough competition or the impression of competition so it's not completely monopolistic.

Well, there are indeed many investors who are single-issue, as they say. They have one reason to vote for Trump, which is crypto. Trump has been much more... he felt the wind changing, so he said he was pro-crypto, even though he never was. But he said, my friend Elon told me I should be pro-crypto and that electric cars were good, so I said go for both.

Exactly, and so he became pro-crypto. And he even said worse than that, he said my friend Elon told me that, I didn't agree with him, but since he's giving me 100 million, well, since he's giving a lot of money, I agree with him.

No, because it's Trump, so by definition, you're used to the horrors that come out. And then you have this anti-tech position which has made the market world really problematic. And the guy who is currently in charge of the FTC is also a problem. So between crypto, M&A, etc., you have people who say 'fuck Biden-Harris' and so they're going to vote for Trump.

Ah, well, I would never vote for Trump because of what he's done. Even if I agree that Biden-Harris has positions that are too extreme on crypto, because I'm pro-crypto, and on the M&A world, it doesn't mean I would go vote for Trump.

It's going to be a nightmare. But I'd say we're in California, at some point we said, well, if Trump gets in, we'll move. But you have to... you're American, right? And you're still French, right? Okay.

Well, we start investing at a certain stage, so it's either a pre-seed round or a seed round. And then when the company raises more money, we deploy what we call reserves. So when we invest a dollar, we reserve two dollars, and we say, well, we'll put a little money in the next round, and the next round. And once the company starts to take off and work well and raises a growth round, a Series C or D, at that point we have another fund called an opportunity fund, which is also 200 million, and we write bigger checks into a small number of companies. The idea is to create a portfolio with the very best companies from the fund, where we will accumulate upside later.

It's true what I'm saying. It's felt. It's true that American culture is extremely consumerist. There is a huge amount of debt. The debt of couples in the United States is absolutely catastrophic. How much do people have on their credit cards? It's true that salaries are high, but the cost of living is high. It's one of the most expensive places in the world. You go to Atherton, it's the most expensive zip code in the world, or the most expensive in the United States.

Well, it's houses that are all worth tens of millions of dollars. And that's where you find nannies for $50, $150. Well, I think you can find a nanny for $50. Anyway, this notion of, I want to try, if I can, I want to try to get back a little bit of options, a little bit of stock.

So the difference between Europe and the United States is that in the United States, you understand this jackpot effect. The fact that the tens or hundreds of thousands of dollars in options that you vest over the next four years, if the company is successful, you can end up with millions, tens of millions, hundreds of millions. That's how Ryan Graves, who got 2 or 3% of Uber, is today a multi-billionaire, thanks to the options he got. We see in our American companies that have teams in Europe, the Europeans, you tell them, do you want more cash or more options, they all say I want more cash. So they haven't understood the potential value and the potential jackpot.

I mean, in France, there's even a... I don't know if you agree, Clem, right now, but there's a sort of... not even an unspoken rule, but they tell you, basically, if a startup offers you options, there have been so many people who didn't make anything that it's a scam. So take the cash, take the salary, and the shares, you're going to get scammed in the end anyway, like in 80-90% of cases, it's worth nothing. It's a big thing for the last one or two years.

Yeah, because if you're not ready to take the risk that these options are worth zero, well, okay, that's your choice. But working for a startup is a philosophy.

Well, but it's also the French being grumpy, I think, a bit on that. But I've really heard it a lot recently, the fact that, once again, mostly startups fail or don't make a lot of money. So mostly it's a scam, you can see it that way. Or else you say, I got my salary, I took the risk, it's a risk. What you do, the way engineers manage it here, is they spend 3 or 4 years in a startup, they vest 75 to 100% of their options, and then they change jobs, they get another grant for another company. And after about ten years, 10 or 12 years, they've done two or three companies, they have their mini portfolio, and if they chose the startups well, they have different levers. And maybe one will have a lot of success. And if you have a Stripe or an Uber or an Airbnb or a Google, well, you're very well set for a developer. But it can also be for good salespeople or people like that. If you join a startup, don't stay too long, unless you really see it's the one that's taking you to the moon. But otherwise, after 4 or 5 years... well, after that, you're not just working for the money or the hope of gain, it's also whether it's a company with a mission, if you have people you work with that you feel good with, there's no reason to leave.

No, it's not... objectively, if you're successful as a VC, you're going to make money, and so it pays for nice houses, nice things, etc. But it's not the reason... money isn't the reason for doing what you do, because you work enormously. There are very, very few moments where you have a feeling of success. Out of 100 companies we invest in, maybe ten will make us a lot of money, and the rest, well, half will fail, most of the other half won't do much. But it still requires an enormous amount of money and time. And to make money, you're going to wait a very, very, very long time. So if you really want to make money, you go into hedge funds, you don't become a VC, especially at the level where we invest, where it's so hard that success, and therefore making money for us, takes 10, 12, 15 years.

Well, VCs are compensated with management fees on the amounts we manage. So if I'm an LP, I invest in your fund, I'm an LP, I put in 1 million, you put in 1 million, I take 2%, so 20,000 a year, 2.5 points a year. And on the profits, I take 20%, with what we call the carried interest.