A typical angel investor may make, what, a handful of investments in a year? Maybe not even that many. There are VC firms employing dozens of people who made no investments at all in 2013. So what of one hyperactive investor who makes up to four deals a week (not a month, a week)?
If you add in that until recently he was operating almost entirely on his own, that he has 10 children and spends up to four hours a day, every day, on Talmudic study you wonder how Jérémie Berrebi does it.
“I sleep five hours a day — that is enough,” he says.
Berrebi has closed some 250 deals, 30 of them under his own name, the remainder wearing his hat for Kima Ventures, the investment vehicle founded alongside French entrepreneur Xavier Niel in March 2010.
Berrebi: Sleeps five hours a day
Berrebi’s biggest success so far was the sale of French email company Sparrow to Google in 2012 — he claims an 18x return on investment. Rapportive, a Gmail plug-in that links an email sender to his or her social media profile, was acquired by LinkedIn in February 2012. That, says Berrebi, was a 5x return.
He is a bit quieter when it comes to failures. He says there are five or six investments that have failed completely, and he expected about 15% of the current crop will never return in full the investment made in them. “They will always remain small."
That makes around 40+ failures out of 250 — a strike record considerably above average. How does he select the companies to back?
"The first thing is it [the idea] has to be useful. With this word you remove 90% of the start-ups created.
"After that we check the team. Do you have a real team committed to working on this company?
"After that…our main target is to invest in start-ups that break even with $150,000."
To manage such a deal flow requires an agility that few investors can manage. "I don't have an investment committee — I take the decisions alone. Sometimes Xavier will jump in, but [mostly] I am taking the decision alone."
Berrebi recently took on two staff, one based in London, one in Paris (he is based in Israel) to help manage the growing portfolio and to spot opportunities. But he says the reality of early-stage investing is that companies share many of the same problems.
"All the start-ups request, almost all the time, the same thing: they have a problem with their business model; they have a problem with customer acquisition; they are paying too much for their hosting platform; founders fighting with co-founders.
"When they come to me, I have the answer already."
Last year the company announced a program, the Kima15, which promises to deliver $150,000 in return for 15% equity in a company within 15 days. The deal is non-negotiable.
Investors have questioned the scheme. "Great entrepreneurs can probably raise more money on better terms even at the earliest stage, so what you have to ask yourself as an investor is whether you’re really going to be getting into the best companies with this approach," Max Niederhofer at the Copenhagen-based Sunstone Capital told the tech.eu blog.
Berrebi is no stranger to the internet. Born and brought up in Paris, he was an early star. "I formed my first company at 19 years old. I sold it in 2004."
"By January 2000, I was the star of the French ecosystem. I was on TV every day, I was in every newspaper. A young guy 21 years old, who didn't go to university. They called me 'The French Bill Gates.' It was not really true. The pressure was so much. I managed 40 people."
Eventually the pressure was too much and Berrebi sold his company and moved to Israel where he became a full-time investor.
"I had a lot of friends who were angels. They needed someone to mange their deal flow and portfolios."
Unfortunately as Berrebi found, it was not that easy.
"One guy said I want to give the money direct to start-ups, another wanted to do it another way. Everyone wanted to work in a different way. When I explained that to Xavier, who was one of these guys, he said, 'Why do you need the others? Let's do it alone.'"
When they started they had planned to invest €10 million in 100 start-ups. They passed that threshold, so where will it end?
"The limit is the bank account of Xavier Neil."