INSEAD Private Equity Network in Switzerland | INSEAD Alumni Magazine

By André Aubert, MBA ’00J, Pan Pan, MBA ’03J and Roman Pelka, MBA ’00J

Fireside Chat with Index Ventures‘ Bernard Dallé, October 2015, Geneva
The fully booked event organised by IPEC Geneva (Pan Pan, MBA’ 03J, Pantèra Ventures and Roman Pelka, MBA’00J, Montfort Capital) was moderated by Pan Pan. The featured speaker was Bernard Dallé (pictured left with Roman Pelka) who has been with Index for over 18 years and currently also manages its operations. Index Ventures is a multi-stage VC fund manager that has raised seven venture capital funds totaling US$3 billion since 2005. It was founded in Geneva, with offices in the tech hubs of London and San Francisco, and has a network of entrepreneurs in dozens of countries. It also offers a three year venture associate programme for pre or post-MBAs.

Fireside Chat with Index Ventures & IPEC in Geneva

Key Takeaways

On Geneva: “Geneva is almost a hub for VC. It attracted a billion dollars in VC fundraising this year alone,” said Dallé, pointing out that Highland Europe, a growth-stage technology investor, raised a new US$365 million and Index just closed a US$700 million fund.

On European Venture Capital: “European funds raised US$3 billion this year. Several of them were first-time funds… Two or three years ago, the view on Europe was negative. Top-tier institutional investors said they would invest in VCs in the US, Silicon Valley, India, China, Israel but not Europe. But that has changed. It has never been as good as in the past few years,” said Dallé, pointing to both institutional investor interest and exit opportunities.

On Measuring Returns: Returns are measured across the entire portfolio. “If you look at an early stage fund, it will have about 30 companies. Over its lifespan of 10 to 12 years, 20% matter in terms of returns and 80% don’t matter. You cannot predict the first few years which investments will matter. A startup can seem dead but turnaround and be a star in five years’ time,” said Dallé.

Venture Funds & Performance: Consistency of fund performance is important to be able to raise multiple funds over time. Typically a venture fund aims for a 20% to 40% net IRR (after fees), or 2x to 4x fund multiples.

About the Loss Ratio: “The early stage fund loss ratio is immaterial to performance. It is calculated simply: you take all write-downs and write-offs versus the total money invested. There is no correlation between loss ratio and the performance of

via alumnimagazine.insead.edu