We analyzed Newfund’s performance over the first 14 years of the fund and found that the main explanation for performance of a french start-up is its ability to establish a business in the USA, with the exception of the energy sector (Eqinov). Medtech S.A., In2Bones, Tageos, Aircall and others provide for 51% of the proceeds from exited companies for 24% of investments in initially french start-ups, and a MOIC of x6.7 (figures as of 06/30/22, full list here).

There is another rationale to this investment strategy : a focus on France only or on Europe only expose one to a difficult awakening a couple of days down the road. If the idea is right, there will be an American competitor, which at one point in the future will tap into the European market. That day, the American will be much stronger since VC resources and the ecosystem are so much larger and stronger in the USA.

Founders are often afraid of going ‘too early’ into business with the USA. This is part of the french culture : one has to prove himself first. Only the ‘ridicule’ can kill and failure does not kill if you have the right diplomas. Data show a different picture, with three quarters of French scaleups active in the US having entered the country before their Series B. Strikingly, 30% have entered the US market right after their Pre-seed or Seed (see our blog post).

At Newfund, we call it the ‘Passe to bac d’abord’ syndrome. Main drawback : the day you are ready, it is too late. The Road to the USA (RTTU) investment strategy intends to move away from this general mindset and focus on the outliers who understand that time is of the essence. These people are the true believers that they are building something singular. They are eager to validate their unique way of solving a problem in the largest marketplace in the West, because they now that more impact and rewards come from a success on a larger scale. Good news is, with the world becoming flatter, the threshold to tap the American market has been dramatically lowered. Enters Newfund, the early-stage fund bold enough to support founders with a global strategy from day 1. Our team, network and methods will make the difference (or not).

More on RTTU investment strategy (access restricted to the Newfund team)