Eric is a civil engineer specialized in building electric power stations for thirty years. Eric Randoux has traveled a lot. When he came back to Belgium, he decided to become a business angel.
Can you tell us more about your career?
I trained as a civil engineer and I have been building electric power stations for thirty years now. I worked for twenty years or so in leading groups including Tractebel, HP and the French company Cegelec, in which I became a partner following the LMBO. The company was ultimately taken over and I exited the capital. Back in Belgium, I bought into the Belgian company IMM, which specialises in building thermal electric, hydraulic and solar powers stations in Africa. Buying this company was a turning point in my career, as I was appointed as CEO.
How did you find out about business angel investing?
Quite simply through a post by one of my contacts on LinkedIn. Fabrice Goffinet was looking for new participants to complete his investment group BAC12. I was immediately interested because I had been considering investing in startups for some time.
What attracted you to this type of investing?
I find that, as the boss of an SME, you can easily feel alone and cut off from the world. In my case, my clients are all far away from me, in Africa. It is hard to meet them, other than on-line. As a result, I have little face to face contact, except with my own team, which is made up of about thirty people. I have discovered a different approach at BeAngels, as I meet with entrepreneurs and investors, and these are the aspects that appealed to me.
What are the advantages of joining an investment group?
It is much easier to integrate and meet other network investors. You learn humility, as there are so many projects presented across different sectors and domains. Evaluating all of the different aspects of a project in a short time is also a skill which has to be learned. The training provided by the BAC programmes, along with the coaches’ guidance and experience, is extremely useful. The presence of a wide variety of talents within the group also enables you to take informed decisions.
What do you gain from these investments?
The most important thing for me is the energy provided by the people I meet, not just the financial aspect. I don’t share exactly the same views as my BAC associate Benjamin Tillier however, who said during one of your interviews that he would prefer to consider that all of the money invested in startups could perhaps be lost, as this is the price of experience. As far as I’m concerned, my money is not lost. Although you have to be aware that there is a real risk of this happening. This is why I never investment more than 5 to 10% of my net worth in this type of investment.
What do you believe you contribute to startups?
We draw on the competences of our investor group of twenty people, depending on which domain the startup is in. Other than this aspect, many entrepreneurs have little experience and have not yet structured their project sufficiently. We try to help them by asking the right questions. When you are working flat out, it is very hard to see the wider picture.
Is it possible to be a business angel without investing huge amounts?
I don’t think you need a lot of money to invest. The image of a business angel as an ageing inheritor is now behind us. I am now convinced of this, although it was one of my fears when I joined the network. Through practice, I realised that being a business angel requires a certain approach and an effort to take an interest in the entrepreneurs. You must initially analyse the team and their skills and whether they have determination. You then focus on other factors, like the market and the business model. This is a very different approach from investing your money through private banking services. In both cases, you have to wait for the investment to appreciate, but the energy feedback from business angel investing is fantastic.
You invest as a business angel but you have also invested in the ScaleFund investment fund. What is the difference?
As a business angel I am an active investor, I take an interest in the projects and I spend time trying to understand what they are proposing. With investment funds, I find out about the latest investments and I note the changes in business model. It is a much more passive approach. It is therefore highly different, but also interesting. I prefer business angel investments however, as I find them more stimulating.
What do entrepreneurs gain by using business angels?
When the banks decide not to grant loans, entrepreneurs have to resort to other sources, like business angels. As well as lending money, they also provide smart services, which I consider much more interesting than the purely financial aspect. They enable startups to draw on their skills to help them grow, which many entrepreneurs lack.
Do entrepreneurs have a negative image of business angels?
A company is its founders’ baby and many believe that they will lose control of their project if business angels invest in it. This is a misconception, however. Business angels seek to help entrepreneurs, not steal their baby. They must remain aware however that business angels do not intend to remain invested in the company, but will be targeting an exit.
Why become a business angel?
It restores confidence in the future. I am amazed by the number of people who launch projects and who take risks. In addition to seeking loans, they outline a solution to a problem, which instils enthusiasm. I believe that more people should become business angels, despite the fact that this type of investment is not widely known about. It should not be viewed as a retirement pastime, but as an activity which enables you to remain active.
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