How to Raise Funds with a Super Angel: An interview with Fabrice Grinda

By Gwen Salley, Head of Investment and Services at STATION F

Angel investors are crucial partners for entrepreneurs, especially in the early days. They can be important catalysts for helping startups take off and finance the early days of development. However, raising funds from angels is not always easy as there are no clear rules on how to reach business angels and convince them to join the adventure. Raising from business angels (BA) is an adventure in itself and we’ll try to uncover its intricacies with one of the world’s most active ones: Fabrice Grinda.

Fabrice is a successful serial entrepreneur-turned-BA who started investing right before the internet bubble and never really stopped ever since. With over 600 investments and counting, he developed over the years a comprehensive approach to angel investing. Keep reading for some of his insights.


Gwen Salley: To give people insight on who you are and what’s your story, could you start by telling us why you decided to start investing in startups and how you became the world’s most active Business Angel (BA)? 

Fabrice Grinda: It actually wasn’t fully intentional, when you are a visible consumer internet CEO, loads of entrepreneurs come to you for advice. 

When I started my very first startup back in France in 1998 (Aucland), many entrepreneurs came to me asking for money and advice. I was not sure if I should do it or not and was wondering if it was a distraction from my core mission as an entrepreneur. I started by meeting with a few entrepreneurs and quickly realized  I was in a good place to help as they were facing and asking about many concerns I faced before. 

So I started investing just before the dotcom bubble burst. If you have asked me how much they were worth after the bubble, I would probably have said nothing. But a few years later I realized I actually did really well on most of my investments: 2xmoinscher, Cityvox, etc.

In 2004 I also sold my company so I started investing small tickets again. 

It accelerated in 2006 because my new company OLX grew quite fast. Me, as the CEO of this 5000-employee company present in 30 countries, got really visible in countries where there have never been many angels historically like Brazil, India, Russia, and so on. So I organically started receiving a lot of deal flow. I was, at the same time, managing a multinational so pretty busy… 

So I started focusing on a category I really liked and on a vertical I could really be helpful on: marketplaces. 

I also created a mechanism with heuristics and strategies to value a company in one hour. 

When I sold OLX in 2013 I already had over 100 investments. 

As I liked being an angel and created companies at the same time I created FJ Labs which is a hybrid Venture Capital fund and startup studio. We, today, have over 600 startups investments. 

GS: Do you make all your investments through FJ Labs or do you also make investments on your own? 

FG: Most of my deals are made through FJ Labs. Half of the money we deploy to date through FJ Labs is my personal money, so over 100 out of the 260 million dollars we deploy is my personal money. 

Even though we do have some external capital, we still, in many ways, invest like Business Angels. We mostly invest preseed/seed/series A; we write small checks; and we don’t lead rounds. We are definitely not a traditional VC. 

We see ourselves as a friendly, large early-stage investor who partners with VCs.

Even though we are technically structured as a fund we still behave as a BA. We make no extensive due diligence process. We don’t hold investment committees. We are super light compared to VCs to decide if we invest or not. 

In alignment with this angel strategy we have, we implemented this one-hour decision-making process I mentioned earlier.  

GS: How can you actually assess in one hour? Do you have a prepared set of questions that you go through? 

FG: Yes absolutely. We imagined a deal memo every member of the team fills during the one-hour call in which we assess 4 things: 

– Do we like the team?

– Do we like the business?

– Do we like the deal terms? 

– Does it meet our thesis of what the world currently is and where it is going? 


Do we like the team?

If you talk to a VC what they all say is: “I invest in the best founders/entrepreneurs”. What does that even mean? 

At FJ Labs, we care more than anything else about storytelling skills and analytical skills of the founders. 

The reason why storytelling skills matter is that if you can tell a compelling story you are going to raise money at a higher valuation, you are going to attract a better team, get better deals, be able to get more PR…  

But it’s not enough! 

So we also want founders who are very sharp when it comes to numbers, analytical, and with a strong understanding of the unit economics of its business. 

We really look for both: extraordinary storytellers and super analytical founders. 

On the team side, we evaluate passion and the tenacity of founders through pushing its team. During the meeting, we challenge the entrepreneurs’ assumptions and see how they react. If they crumble to us questioning their assumptions and business they’re not going to handle the ups and downs of entrepreneurship which are harder than any question during a meeting. 

Do we like the business?

We developed a whole bunch of heuristics: how large the total addressable market size is, how fragmented the supply and demand are, how is the market growing, … 

But ultimately there is one thing we care more than anything else about which is your unit economics. 

Whether you are at pre-launch or post-launch, it will be either your forecasted or actual unit economics. But whatever the case, you really need to have some in mind. 

For example, if you are at prelaunch I want you to know what are the average values on the industry, what is the margin structure of the product, I want you to have a landing page analysis, to know how your acquisition cost will be relative to your net contribution margin, and so on. You need to have an idea of what your unit economics are going to be. 

When you are at post-launch, you actually need to be there.   

It is not enough to just have good unit economics. You also need to believe you can scale them so I also need you to have done density analysis in your customer acquisition channels. It doesn’t matter what your channels are. It could be viral, paid ads, sales team… It only needs to be scalable. 

The 3 things a business needs to do are: find product-market fit, have good unit economics, and then scale. 

Do we like the deal terms?

I expect the deal terms to be reasonable and aligned with the size of the opportunity and the quality of the team. 

In reality, there are really clear frameworks in the US on where valuations are depending on the perspectives. 

I posted a matrix on my blog that shows these cycles. There is one for marketplaces and one which is more general that we can apply to any startup. 


This framework matters a lot because, first, I am not going to be in it if you come to raise a seed and you don’t fit the framework and, second, it gives you an insight on where I expect you to be in 18 months in terms of stage, GMV, traction, and revenue.

We typically have one matrix per vertical at FJ Labs

Does it meet our thesis of what the world is and where the world is going? 

I have a personal thesis on the future of food, a personal thesis on the future of work, on the future of real estate, cars, marketplaces… 

I try to invest aligned with where I think the future is going and how we will get there. 

Those investment theses are presented on my blog. I posted them because I think it is better if people know what my thinking is before reaching out. 

That’s basically how we evaluate a startup in one hour!

GS: When you assess a deal that is coming from Europe and more specifically France versus a deal from the US, do you apply the same analysis and have the same expectations? 

FG: Yes of course! The matrix may be a little bit different: the valuation might be a little bit lower, the traction as well but we have the same team expectations, the same criteria on unit economics and the necessity of understanding them. 

In general, I observe that European and French entrepreneurs are weaker storytellers, their ability to express themselves in English is poorer, and they are less focused on understanding their unit economics. 

GS: If we go back to the BA side of your story. I had a very straightforward question on what is the best and worst deal you made and why was it the best and why was it the worst? 

FG: I don’t like talking about investments in these terms because what matters is the decision making process you made based on the information you had at the time of the investment. And then there’s a huge factor of luck. 

Even if you invested in a company and you didn’t do well, as long as you were aligned to your strategy when the decision was made, it’s okay. 

That’s why it is hard to tell. It would be easy to evaluate in terms of the best return but it would actually be a wrong analysis. 

GS: Could you then give us an example of a deal you’ve made that you consider to be a great deal? 

FG: There is a current thesis we have: we are big believers in the verticalizing of many industries. Food, for example.

Many VCs decided it’s not interesting because, as they say: “Wait a minute. There are those Deliveroos and Ubers, which are very aggressive and where you can order pizza. Why would you need a verticalized pizza app?”

In my opinion, we shouldn’t put ourselves in the shoes of the consumers, but in the shoes of Luigi who owns his local pizza store. 

What does Luigi want to do? He wants to sell pizzas.

What doesn’t Luigi t want to do ? He doesn’t want to pick up the phone, create a website, deal with delivery companies, think about packaging, answer comments on Google, Tripadvisor, Yelp, …  

This company we invested in called Slice offers a back office to these pizza stores and they’ve grown from 0 to 600 million in sales in a few years. No one really believed in it. I loved the founder, the approach, it was aligned with my thesis of the future of work and the future of food and the verticalization of the industries so I backed it. 

Another example, this time for a deal we got lucky when the decision making process was completely wrong, is a mobile gaming company we eventually got very successful with. 

We don’t do gaming normally, we do marketplaces. 

But we had this young analyst who just joined the team and who was super enthusiastic about a project founded by some guys he knew from university. 

The thesis of the company was that if you merged successful games and mobile, you would obviously do well. It was at the time Supercell had not yet deployed Clash of Clans which is the most successful game on mobile. It turned out that their theory failed completely and none of their games really took off. They were basically going to shut down the company because games were very expensive to develop. The founders had the ultimate idea of building a very casual game in literally 24 hours, without spending loads of money on story lines and actors. They released the game without any specific expectation on the AppStore and it took off! The startup was acquired by Zynga Games for like 250 millions of dollars so our initial $50K ticket became around $8M, which was insane. So our highest multiple ever came out from a deal where everything was wrong: the analysis, the thesis, the launch.

My recommendation is that, at the top of everything, you need to diversify your portfolio. You need to have, at least, 100 companies if you want to be safe and you want to make money. There is so much luck and serendipity around investment. And venture also follows a power law which means that very few deals will return most of the money so you need to be in those best deals. And the easiest way to guarantee being in those best deals is to be in as many deals as possible. 

It is the opposite of traditional VCs which have concentrated portfolios of around 10 to 20 companies. We, FJ Labs, are not a traditional VC fund but we are closest to a Kima Ventures from a strategy perspective.

GS: Talking about the differences between Business Angels and Venture Capitalists, do you have some best practices to share with startups on the best way to approach, engage, and close a BA versus a VC? 

FG: It is the same in both cases. 

I’ll tell you immediately what not to do. 

You should not send me a LinkedIn message or a cold email saying: “I have this great idea, do you want to invest? I need money to build the code.”

If you tell me that, it simply shows you can’t execute, you haven’t been able to get love money, you haven’t been able to sell. It shows you don’t know how to build things very cheaply and that is not a good signal. 

Let me tell you what to do instead. 

I like to get an introduction from someone that is connected to me. If you go to LinkedIn, by chance we will have people in common that can introduce you to me. 

If we don’t have anyone in common you can get introduced to, don’t worry I also read cold emails but only messages that are very well tailored. You should do your research and tell me: “Fabrice I see you’re an investor in a bunch of marketplaces, we are a marketplace. We have actually raised money from friends and family, we have launched a product, our MVP is working, we are very early with almost no revenue but here is the traction we have, the unit economics we have and now we are ready to raise a seed or angel round.”

This gives me enough information to decide if I want to talk to you based on that first contact. 

If you show me you have done no homework and you are not structured in your thoughts, I won’t reply. 

You need to show that you know what you are doing and most people don’t do that so that’s why I said we talk to 100 startups a week. The reality is that we receive hundreds of deals but most of them are so low quality that we don’t even consider them, they don’t even enter the pipeline. 

GS: You mentioned you developed a thesis on the future of work, it’s obviously a very trendy topic with more remote workers, independence as well… What is your vision? 

FG: Today in your work, there are loads of things you do that you don’t like to do. It is  kind of what I described earlier with Luigi, the pizza guy. 

My vision of the future of work is that, in the future, you will only do the job you love to do and everything else will be done for you by platforms or other people. 

For example, I can mention Meero, which I’m an investor in. Meero is a French marketplace dedicated to photographers. As a photographer you like taking photos, you don’t like finding clients, post-processing, editing, invoicing… So, Meero will do that for the photographer. 

That’s one component. 

Of course there’s more remote work and more outsourced work. I personally use Upwork a lot today. I outsource everything in my life that I can using the Upwork platform. 

My thesis about the future of work is closely related to my thesis about the future of marketplaces. I think marketplaces will be highly verticalized. For instance, Upwork will be highly verticalized by platforms like Comet, which is dedicated to hire programmers. 

One other thing is that the marketplace will now pick the supply for you and that will dramatically change the dynamic of labor. We will move from the double commit to the marketplace picking the supply for you exactly like Uber is doing. When you order a Uber you don’t pick your driver, Uber does it for you. 

GS: What are you most excited about in innovation and tech in the coming years? 

FG: We are at the very beginning of the tech revolution. 

I think about two main things which are the threat created by climate change and the social injustice and inequalities. Tech is in the position to address both of them so I am very excited to see how we are going to use technology to do so. 

It is up to us entrepreneurs and investors to make this world of tomorrow happen. As investors, we back founders that can very clearly see where the world is going to be in ten years.