Last week I received a job inquiry which consisted of a CV attached to the following email (translated more or less verbatim):

Dear Mr. Bivens

Student at [local university], I’m looking for a job in private equity in Paris.

Competitive, aggressive, and dominant on the French private equity market, Truffle Capital is the enterprise corresponding to my aspirations, which I why I wish to join.

I attach my CV and remain at your disposal for further information by email or phone.

Sincerely,

Emails like this surprise me, especially coming from a student at one of France’s top grandes écoles.

First of course, there’s the cardinal rule that when sending a CV with a job inquiry, it’s worth doing a tiny bit of research into the recipient before writing the cover email. If this candidate had spent 60 seconds looking at our firm’s website, he would have known that Truffle Capital divides itself into three specialized sectors – biotech, energy, and IT – and would have indicated which sector his interests and talents fit best. He would have added some semblance of specificity rather than throwing out generic platitudes like ‘competitive’, ‘aggressive’, and ‘dominant’, which don’t really tell me anything. He also would have addressed the message to a proper email address, which in my case can be easily found on my blog.

There’s also another issue at play here, which I suppose I cannot expect young adults fresh out of college to think through – especially in France – but one that bothers me nonetheless. And that is that newly-minted undergraduates are not thinking long-term when they expect to join a VC firm as their first job.

I can understand why becoming a VC looks attractive on the surface: the job sounds glamourous, and there’s a prestige factor at landing a VC gig, perhaps even greater than McKinsey or Morgan Stanley for ambitious undergraduates. The glamour and prestige are over-estimated, but the perception is understandable given today’s self promotion-oriented VC community.

But the truth of the matter is this: venture capital is all about the portfolio companies. Venture capitalists work in service to the entrepreneurs they finance.

Accordingly, to be a good VC, you have to be able to provide relevant and beneficial assistance to the portfolio companies.  The value you will be called upon to bring can encompass direct sectorial knowledge, networks, privileged introductions, strategic guidance, operational insights, processes and methods, and especially credible ‘cheerleadership’. I submit that in order to do all this, you must gain industry experience before becoming a VC.

Furthermore, and I recognize this it is practically heresy to say this in France, but I firmly believe that to be a truly effective VC, you must have significant startup experience.

So when I receive a job inquiry from a new graduate, I immediately think that the candidate hasn’t sufficiently thought through the implications of what it takes to become an effective VC, or worse, the candidate is merely interested in the job for the prestige.

So, am I just wasting my time if I send you my CV ?

Not if you’re still reading this!  I am a firm believer in helping people that are serious and committed.  I welcome people contacting me over the transom for contacts or advice on employment opportunities within the VC/startup ecosystem in which I operate. In fact, I very much value this. Our portfolio companies are relentlessly seeking growth, and the recruitment of top talent plays a key role in their progression. At any given time, there are several employment opportunities, or at least unmet needs, across our portfolio.

That being said, my bandwidth is extremely limited. I help people with career guidance when I can, but I must give priority to our investors, my colleagues, and my portfolio companies.

Accordingly, some ways of soliciting career advice from me are more effective than others. Here are a few suggestions to increase the likelihood of a desirable outcome:

• Mass emailings of a CV and/or cover letter are not effective. I usually junk immediately unless my stringent spam filter does it for me.
• Tell me clearly what you’re looking for. A generic, “do you have any job openings for me?” often goes straight to trash.
• If you’re looking for a job in venture capital, and you’re a newly-minted undergraduate / grande école degree-holder, you clearly haven’t been paying attention.
• However, if you have substantial work experience, and are convinced you want to become a VC, I urge you to first take a month to reconsider. If after that month, you still remain undaunted, spend the effort first to fully understand the VC model, research the firms in the market, and feel free to let me know what type of role you’re seeking. Also, be aware that VC funds generally don’t have formal or frequent recruiting processes. The VC model is not scaleable in headcount like big corporations, banking, or consulting. Be prepared for a binary yes/no response that is usually ‘no’.
• If you’re looking for a job in a startup, I applaud your decision! (see Free your career). Now, how can I help? Take a look at our portfolio companies. Which interest you the most? Of that subset, visit their respective web sites. Many post job openings in clear view (I also maintain a list under the ‘jobs’ tag on my blog. If you see a role you want, please apply directly to the company, but feel free also to alert me of your interest. I will try to ensure that your application receives attention and that your candidacy is seriously considered.

If you do not see a startup job opening that corresponds to your specific aspirations, get creative! If you’re passionate about a specific space in which one of our portfolio companies is operating, think about how you might be able to add value to the firm.

I’m of the mindset that passion is far more important than which university you attended, and often even more so than specific sectorial experience. If you can succinctly articulate how you think you might be able to benefit a given portfolio company, I will probably go out of my way to introduce you to the decision-maker there.

In the 7-day span since last week’s Rude VC column, the digital world has witnessed the fastest growing video campaign in the history of social media.

I’m of course referring to the Kony2012 short film produced by Invisible Children.  The human rights organization launched a video with a sole objective to render famous and agitate for the arrest of Joseph Kony, head of the Lord’s Resistance Army, abuser of child soldiers, and international war criminal #1.  As of last night, the Kony2012 video has surpassed 100 million views (source: Visible Measures).

I’ve found this phenomenon fascinating, and not solely because of its welcome spotlight on a continent-wide topic directly involving another young man I’ve had the honor of knowing (for further reading on the subject, I recommend Ishmael Beah’s first-hand account of his experience as a child soldier in Sierra Leone).

It feels like we’re approaching another inflection point, in which social media is elevating citizen activism to a level which obliges politicians to act.

Like any larger-than-life movement, an inevitable backlash movement does not trail far behind.  In the West, the two camps seem to fall along generational lines.  In Uganda and much of the African diaspora, the video campaign feels more like Rudyard Kipling’s condescending 19^th century poem, “The White Man’s Burden,”  and understandably so (for an excellent perspective on the nuanced issue, I recommend you start reading here).

But even if iPad-touting youth in the West are re-tweeting video links and buying t-shirts so that they can feel better about themselves, you cannot condemn their intentions.   I’d much rather see virality on a complex, geopolitical topic like this than the traditional allocation of mindshare to the Kardashian sisters.  And Kony2012 does seem to be encouraging many people to research the complex topic more thoroughly.

Regardless of your opinion on the worthiness of the cause of hunting Joseph Kony, or on the agenda of the Invisible Children organization, one fact is undeniable:  the momentum generated by the Kony2012 campaign has forced politicians worldwide to take a position on a human rights issue that they likely would have ignored in a previous era.

I submit that we’re only beginning to understand the approaching sea change of civic activism enabled by technology and the network effects of social media.

In addition to being the year of Joseph Kony, 2012 will also mark presidential elections among 3/5^ths of the UN Security Council permanent members: the U.S., Russia, and France.  In the first, President Barack Obama counts almost 13 million Twitter followers and boasts a whopping 91 for a Klout score.  The second withnessed an unprecedented expression of public outcry, with grass roots solidarity largely enhanced by Facebook and Twitter during its election last week.  And here in France, politicians have underscored the power posed by social media in their curious zeal to censor it.

We may not yet have reached the year in which digital activism tips an election, but the day is near for when it is the politician who is not necessarily the best-financed, but rather who best masters the power of social media that wins.

Last week Europe hosted the Mobile World Congress, an annual ritual in which over 60,000 people in dark gray and black suits invade Barcelona in an event originally organized by the consortium of mobile network operators. The event used to be called 3GSM, named after the nearly ubiquitous technology standard for mobile communication. The GSMA subsequently upgraded the title of the show to the Mobile World Congress to decouple its name from the increasingly obsolete technology standard.

In an article on this very subject, TechCrunch questioned whether the MWC will continue to remain to relevant. They observed how the center of gravity in mobile is shifting away from the network operators and towards handset platforms and software. The show is less about Vodafone and more about Android and Angry Birds. In the past, the stars of the show were gladiator CEOs like Sir Christopher Gent. Now, the celebrities are people like Denis Crowley of Foursquare.

TechCrunch argues that the new product announcements or business partnerships in this new paradigm happen on a regular basis, that it no longer takes a yearly carrier-sponsored trade show to handshake on an agreement in a convention center hospitality suite.

While I agree that the trend toward software and content is indisputable, as a VC I enjoy attending the MWC each year, and I submit that the conference has far from outlived its utility. The MWC is the sole conference that I consistently reserve on my calendar. I look forward to it annually for a few primary reasons.

How do I say “You’re beautiful” in Catalan ?

First, it’s a chance to escape Paris and experience gorgeous Barcelona weather in February. More importantly, this is the only conference in the world that assembles all the people in the mobile ecosystem in one place: the mobile operators, the operator vendors, the content players, startups, investors, and investment bankers. Only at an event as wide and as comprehensive as this can I glean a sense of where the next innovations may bud, simply by walking the floor.

This year I overcharged my agenda, regretfully not leaving a ton of spare time to wander and soak in the vibe. Still, some trends were unmistakable.

Takeaways from this year’s conference

HTML5, for example, is the current technology buzzword. We’ll see how sustainable this fascination is, though with Facebook’s initiative in partnership with 9 global carrier groups to upgrade mobile phone browsers in order to enrich the technology’s capabilities, I would be bullish on HTML5. While apps are here to stay, I more broadly believe the mobile browser ecosystem is giving rise to a number of cool activities ripe for VC funding.

Another shift apparent at the conference was the mobile operators’ burgeoning interest in using the mobile device to enhance customer engagement and customer retention. Operator vendors, at least those who aren’t still restructuring, seem to be responding.

Perhaps the most audacious statement came from Nokia. Last year their platform may have been burning, but this year their stand was on fire! Between the stand that represented an amusement park, the free ice cream, and the aesthetically dynamite lineup of new smartphones, Nokia made it resoundingly clear that they’re not going down without a fight.

It’s all about human contact

Another principal reason that I love the MWC is that it represents one of the rare opportunities to catch up in person with a geographically disparate group of people, for example with my VC counterparts in Silicon Valley, or with potential partners for my portfolio companies from east Asia, the only time of year when several of them congregate in Europe. In this world of always-on, social media enabled connectivity, I submit that the physical encounter is still indispensable. No matter what industry we’re in, we’re all in the people business. The physical crossing-of-paths facilitated by MWC allows us to build relationships, speak off the record, exchange body language, and fundamentally interact as human beings.

TechCrunch points out that the most interesting activities occur not in the central Mobile Congress, but at the fringe events, such as at elaborate parties in hotels, yachts, football stadiums, or historic Gaudi-architectured dwellings throughout the city. This is true. But you cannot have these fun sideshows without the main event.

You may have read about how Lance Armstrong raced the half-Ironman triathlon in Panama two weeks ago.  His runner-up finish at the inaugural event confirmed that Armstrong has set his sights on the triathlon world as his next competitive battleground.

Rumors have swirled periodically since Armstrong’s retirement from the Tour de France that he would transition his skills into triathlon racing, a sport in which he actually had already dabbled before becoming a professional cyclist.

When these rumors first surfaced, Ironman columnist Lee Gruenfeld offered some coaching advice for Lance.  [As a personal aside, Lee Gruenfeld is a writer, philosopher, and satirist that also happens to be the husband and cheerleader of Cherie Gruenfeld, a.k.a. the « TriBeast », a dominant triathlete in my own mother’s age group who consistently thrashes my mom in every Ironman race that matters, thus keeping « KonaKarin » Bivens’ ego in check and earning my gratitude.]

Gruenfeld’s counsel to Lance comprises a tongue-in-cheek list of tips from an avowed non-athlete to one of the world’s greatest.  My favorite piece of advice was this one:

Don’t save anything for the run.  Everyone else is going to tell you otherwise. Ignore them. If Michael Phelps were doing Ironman, those guys would tell him to hang back on the swim. You’re the most relentlessly competitive human being since Eleanor of Aquitaine. Telling you to take it easy on the bike would be like telling Al Capone to forgive a few debts. Hammer that sucker! It’s simple arithmetic: The better the lead you have at the end of the bike, the farther ahead you’re going to be when the run starts.

So what does this have to do with startups ?

Lee’s advice for Lance stikes me as equally relevant in the context of venture-funded technology startups.  In case you’re not familiar, an Ironman is the mama of all triathlons, consisting of a 3.8km swim segment, followed by a 180km bike segment, and concluding with a marathon run (and yes, that’s all in the same day !).  In all likelihood, Lance’s participation in Panama’s “mere” half-distance was a dress-rehearsal for the big dance, quite possibly even the Ironman World Championship in Hawaii in October.

The conventional wisdom for champion cyclist Lance Armstrong when competing in long-distance triathlons dictates that Lance economize some energy during his undisputed leadership in the bike segment so that he can perform strongly in the final run segment.  This is considered conventional and wise because for most athletes, balancing physical effort across the three race segments can make the difference between crossing the finish line successfully or finishing in the medical tent.  Yet Lance is  not your typical athlete, and Gruenfeld dismisses the conventional wisdom in his case.

High-growth technology companies often face a similar dilemma. Should they save something for later, or rather shatter their quarterly financial forecast with the risk of experiencing a dip in performance in the following quarter ?  I say shatter.

Sure, there is something to be said for the argument of showing a consistent upward trend, building a nice story with pretty graphs to present to potential acquirers.  But I don’t want my portfolio company to « throttle back ».  This is the volatile high-tech startup world, not the world of the highly-liquid publicly-traded conglomerate like GE in a market that rewarded Jack Welch for smoothing growth and earnings.  Volatility is expected.  A temporary dip can be explained and overcome.  More difficult to overcome, however, is a loss of momentum.

When a CEO tries to trivialize an underwhelming quarter by pointing to the likely uptick in the subsequent quarter, my stomach tightens.   Empirical evidence suggests that the subsequent quarter in question will barely exceed the forecast, and often even fall just shy of it, beginning a pattern of chronic underperformance.

Rather, I would argue that going all out, and not saving anything for later, is a healthy atmosphere in a high-tech startup.  It raises the performance bar for everybody inside the organization.  Externally, it creates a buzz in the startup’s market segment and can even spur a virtuous upward spiral resulting in more record quarters.

As Lee says, hammer that sucker !

Capital Finance (part the Les Echos Groupe) features an article today on the discombobulations affecting the country’s tax-incentivized fund structures: FCPIs and FIPs.

I’ve written in the past on the perverse effects that these taxpayer-funded structures can have on the venture capital sector.  And for full disclosure, a significant percentage of Truffle’s funds under management are in the form of FCPIs, whose closest resemblance in Europe would probably be the UK’s VCT structure.

{As a reminder, an FCPI, or fonds commun de placement à risque, is a French fund vehicle managed by venture capital firms with a requirement to invest in innovative technology companies.  An FIP, or fonds d’investissement de proximité, is a French fund vehicle that requires investment in a specific region of France.  Both vehicles raise their funds from taxpayers who are in turn offered a substantial tax credit on their income tax, wealth tax, or both}.

The article reveals the preponderant role that distributors play in the annual collection of these vehicles.  All it takes is one or two large distributors to change partners, and any given fund management company or VC firm can shift from having a banner fundraising year to falling off the map.

I’ll explore this perverse distribution game another time, but in the meantime, invite you to read the full article here (subscription required, though a free trial is sometimes available).

For me, however, the money shot of the article is a citation from an anonymous professional of the sector:

« Les ratios, délais et contraintes de toutes sortes se sont multipliés, selon qu’il s’agit d’un FIP ou d’un FCPI, d’un fonds ISF ou IR.  Un véhicule fiscal peut désormais devoir satisfaire simultanément jusqu’à quatorze obligations différentes, voire contradictoire. »

Roughly translated: [The ratios, deadlines, and myriad investment constraints governing these fund structures have ballooned.  Such vehicles nowadays often find themselves in a situation of having to satisfy up to 14 different investment constraints concurrently, some of which can even be contradictory.]

This is unhealthy.  As we’ve witnessed with the U.S. tax code, legal complexity combined with high stakes benefits the lawyers not the entrepreneurs.

John Bogle is one of my idols of the financial world.  He is best known for revolutionizing the mutual fund industry by demonstrating the superiority of index funds over traditional actively-managed mutual funds over the long term.  In the mid-70’s, Bogle established The Vanguard Group and subsequently created the Vanguard 500 Index Fund as the first index mutual fund available to the general public.

Bogle’s investment values center on favoring the little guy, the individual investor who doesn’t have the capital nor the advanced trading technologies that are at the disposal of professional traders and investment banks.

By lashing out yesterday against the tax rate on carried interest, Bogle remains classically true to form in leveling the playing field for the average joe.  “Carried interest is a bit of a technical fraud,” as he says.

The debate about the tax on carried interest has surged in the U.S. thanks to revelations that potential Republican presidential candidate Mitt Romney paid an overall effective tax rate of less than 14% in 2010.  One of the principal reasons that Romney, whose income was in the tens of millions, paid such a low effective rate is the fact that most of his income came in the form of carried interest from his time at Bain Capital, which was taxed at the long-term capital gains rate of 15%.

I admire John Bogle.  Just as he saw the 2~5% annual management fees on actively-managed mutual funds as a hoodwinking of the public, he exposes the low carried interest tax as a fiscal boondoggle to most private equity and VC general partners who are investing other people’s money.

Perhaps as a VC myself, I should fall firmly on the side of keeping the carried interest tax at rock-bottom.  However, I have two major objections to not raising it substantially.  First, financially, I am not in the same boat as GPs in the U.S.  The effective carried interest tax in France is over 30% when counting all auxiliary social charges.  Moreover, as a U.S. citizen with a French salary, I am paying tax to two countries, setting my cumulative effective income tax rate at an obscene 67%.  So Romney pays 14%; I pay a whopping two-thirds.  I find this infuriating.

Even more importantly, however, giving carried interest a tax break is totally unfair.  Carried interest is essentially a fee paid for managing other people’s money.  This fee happens to be based on performance, but it is a fee nonetheless.  The logic of rewarding investment risk with a lower tax rate is not relevant for a GP whose carried interest income is by and large pure gravy (granted, with a tad of personal investment, but this is extremely limited).

Fred Wilson presents a third compelling argument that taxing carried interest as ordinary income is good policy.  I encourage you to read Fred’s post if you haven’t seen it.

Perhaps it took a circus of in-fighting in the U.S. Republican primaries to bring this issue to light, but I am glad that the media and the public are taking notice.

It has been interesting to follow the recent transatlantic flap triggered by Ilan Abehassera’s interview in Betabeat.

Abehassera denigrated the French entrepreneurial scene in a piece that oozed of auto-pr; Liam Boogar of Rude Baguette called b.s. In reality, I suspect both individuals were viewing the same market but through the lenses of different eras.

The brouhaha fizzled before it became exciting, mostly because Boogar refused to play the tit-for-tat game. Which is admirable, though I would have liked to see some fisticuffs on this issue, because there’s clearly a departure underway now from the traditional stereotypes about tech entrepreneurship in France clung to by Abehassera that is a very recent but indisputable phenomenon.

I’ve been a tech VC in Paris for ten years now, and I submit that we’re now enthusiastically witnessing the Deepak Chopra moment for the French entrepreneurial scene. In other words, French entrepreneurship seems to be finally breaking out of the karmic cycle of risk-aversion, underinvestment, and narrow ambitions (Chopra is notorious for exhausting the metaphor of kundalini teachings in business world applications, but if you’re not convinced, read: The Seven Spiritual Laws of Success). But you have to be on the ground here to detect this phenomenon, trust me.

The new generation of French entrepreneurs are breaking the mold. Every single finalist of the Founders Institute program — and every member of Le Camping I’ve met — pitches a well thought-through yet audacious venture with global ambitions reminiscent of what I heard in Silicon Valley in the 90s. First-time teams that have failed make strategic pivots and try again. French co-founders of bay area companies return to France for their second or third ventures (yes, it really happens). I even know of a few cases of Americans moving to Paris to start their tech companies. Granted, a lot of this evidence is anecdotal, but stories like these were unheard of five years ago, even eighteen months ago.

The government, on which the French often instinctively rely to take the lead in innovation, is stepping up in it’s role too. Between record Oseo subsidy grants, the newly-formed Fonds National d’Amorçage (the new 400m€ state-sponsored seed fund-of-funds), and it’s continued support (for the moment) of the tax-break-incentivized investment vehicles like FCPIs, FIPs, and ISF Holdings, early-stage capital is flooding the market. Does France’s legal framework around labor law leave room for improvement ? Of course. But this double-edged sword has benefits. For example, with programs like the Accre, unemployed workers can receive an advance of 50% of their 23-months of unemployment benefits if they apply it to starting a new business. And the government’s efforts to untangle the red tape of the past has rendered company creation formalities inexpensive and fast. As a matter of fact, just recently at Truffle we aided our partners in incorporating 7 brand new companies in the week between Christmas and New Year’s.

On the investment side, there’s definitely still a ways to go (mea culpa). But with the increasingly ubiquitous collection of professionally-run incubators (see How many startup accelerators is too many?), and seed funds like Isai and Kima, France is no longer totally devoid of U.S.-style early-stage investing.

Yet I submit that it is in the corporate sector where change is slowest. Whether it’s due to conservative values, complex decision-making processes, or insular networks, French enterprises do not have it in their DNA to do business with startups. There’s an old joke that a French software startup has better odds selling into American corporations than into its own backyard that still holds true. It’s no coincidence that the new generation of French startups gaining the most traction nowadays are by and large consumer internet plays.

To all you French entrepreneurial refugees in the States, I salute you for being adventuresome. I hold a (conveniently self-serving) respect for entrepreneurial immigrants in both countries. But also realize that it’s soon going to be safe to come home again.