Factors That Influenced Your Decision to Pursue a Career in Financial Advisory
Fabio Mondini de Focatiis
As a venture partner at Eurazeo Investment, based in Paris, from 2015 to 2022, I had the opportunity to experience the evolution of venture capital in France, the second country in Europe, when considering invested capital in startups and scale-ups. During these years, I witnessed an increase in the average round size and the birth of several unicorns, as well as the foundation of new venture capital investment banks that started advising founders on how to raise capital or sell companies. I always kept an eye on the Italian ecosystem (which used to lag 5-7 years behind France with one-tenth of the capital invested in VC), and in 2019, I was convinced that the Italian VC ecosystem would rapidly grow. On this assumption (later proved to be true), I decided that it was the right time to establish Growth Capital, the first VC investment bank of the Italian ecosystem that is now present in Milan, Madrid and London with a team of more than twenty people.
How Do You Find Your Technical Acumen Complementing Financial Advisory Work
In Growth Capital, we have two colleagues focusing on each of the ten sectors we have defined, and we use them to analyse the Italian VC ecosystem. In my case, I am in a smart city after having analysed hundreds of smart city startups in the leading global smart city. Before, I was SVP at Soitec Solar, whose technology has reached the world record in photovoltaic cell and module efficiency, with a technology transfer from German startups. This experience is particularly relevant in the smart city and energy verticals, where companies are more industrial, and products are more technical and complex. If you combine it with the knowledge acquired in my engineering studies at MIT and my MBA from INSEAD, I believe I have the right mix when applied to these sectors.
‘Pursuing a career in financial advisory can be rewarding, financially and personally enriching as you analyse very different challenges and companies, but it requires dedication, knowledge, and a strong commitment to helping clients achieve their financial goals.’
Navigating the Complexities of Funding Startups and Early-Stage Ventures across Different European Countries
The positioning of Growth Capital as a European VC investment bank and the requirement of international experience for an investment professional to join our team helps us manage the challenges that arise when advising cross-border operations. In addition, we strive to listen and learn about what happens around us, particularly in these areas:
◦ Market: we have a dedicated team that tracks daily the deals, both fundraising and M&A, in different European countries and publishes quarterly a VC report where the main VC metrics are presented (invested capital, round size, M&A, most active investors, VC index etc.) available for free on our website (www.growthcapital.vc). This research helps us understand the specific dynamics of the biggest European markets, as well as identify the tech trends of target countries.
◦ Legal & Regulatory: to foster the growth of the ecosystem, as Growth Capital, we have published the template of the most important fundraising contracts (Series A term sheet a SAFE) where founders and investors can find the standard clauses of investments.
◦ Local Partnerships & Networks: we have established several partnerships with the most active players in the industry (industry associations, incubators, accelerators, and other startup support organisations).
◦ We stay informed: Every month, the team attends several industry conferences, workshops, and networking events all around Europe to stay connected with local startup ecosystems and be amongst the first to acknowledge trends and changes.
Modifying Approach When Working with Startups Aiming for Growth Compared to More Established Companies Deliberating Exit Strategies
An important part of our job is what we call the 'Investor stress test': analysing and challenging our clients (usually a scale-up) as we were an investor. These activities carried out in the first weeks before contacting investors, are done with a tailored approach to fundraising and M&A, given the different objectives and clients' needs, services, deliverables, and support from our side, and they change accordingly. Storytelling documents (investor vs. info memo), business plans (stand-alone vs. combined entities), transaction documents, deal structure and negotiation strategies adapt to these different deal types.
Skills Crucial for Making Successful Strategic Decisions
The first and most important skill is to be able to understand the entrepreneurs and assess their chances of success as human beings in a very challenging task. To assess the risk of ventures also varies with the stage of development of the company. If the company is in the early stages:
1. Team, Team, Team: speak with the founders and managers, assess their motivation, knowledge (founders should complete each other) and leadership skills;
2. Traction and Milestone: analyse the achievements the company has made (product development and business metrics) and call their current clients to understand customer validation and satisfaction;
3. Industry Knowledge: focus on the industry that is closest to you and develop knowledge of trends, emerging technologies, and the most innovative players;
4. Adaptability and Resilience: considering our current macroeconomic context, it is even more important to understand if and how the company can adapt to sudden changes in its environment.
At a late stage, it becomes important to the exit potential: study the sector, the competitors and other players, and figure out if any of those could end up acquiring the company in the next years, and if not, if founders have a clear alternative path to liquidity in mind;
Advice for Young Professionals Interested in Pursuing a Career in Financial Advisory
Pursuing a career in financial advisory can be rewarding, financially and personally enriching, as you analyse very different challenges and companies, but it requires dedication, knowledge, and a strong commitment to helping clients achieve their financial goals. I'd suggest that young professionals attend events, meet founders and investors and develop communication and networking soft skills in addition to excellent analytical skills. The venture capital ecosystem is constantly evolving, and education is crucial. Integrity and adherence to ethical standards are also strongly valued: always put your client's best interests first. Consider starting with an internship or entry-level position at a financial advisory firm, bank, or investment fund that will provide valuable hands-on experience and help you understand the day-to-day responsibilities of the role. Lastly, find a mentor who can provide guidance, share insights, and offer advice based on their own previous experiences.
