venture capital

Fabrice Do Rego is the co-founder of The Blueprint VC, a venture capital firm focused on backing under-represented founders in France and Belgium.

In this interview, Fabrice shares his motivations, investment strategies, and insights for the future of European VC. He also delves into his views on promising sectors, the rationale behind a sector-agnostic approach, and the challenges he faced as a Black fund manager.

What inspired you to start a VC fund?

What inspired me to launch a VC fund was the coming together of several factors that I summarize by the notion of Ikigai, a Japanese concept referring to something that gives a person a sense of purpose, a reason for living.

I went to business school, I started my career in M&A in large international investment banks, I then became an entrepreneur by creating an M&A boutique where I advised SMEs, startups, and scaleups in their fundraising, development strategies, and exit strategies. I loved it and still do. This ties in with the two essential points of Ikigai, what I like to do and what I’m good at.

Then, what was probably the most important and founding point in my thinking was to think about what the world needs in a logic of economic AND social value creation. To put it simply, I realized two things that I thought didn’t make sense. (1) Teams of diverse founders are on average more efficient than homogeneous teams and despite everything we see that (2) only a very small amount is invested in these teams of mixed founders (I’m talking about diversity of gender, origins, etc.). There is therefore a market inconsistency which seems obvious to me.

Finally, what was also decisive was our conviction that the more efficient we are, the more diverse we are going to make the ecosystem, the more we are going to create new role models and the more we are going to ensure that having diverse founding teams will be the norm. We create a virtuous circle.

Ultimately, rationally the decision to launch a fund with this investment strategy was very simple. Now the implementation of this especially in a very tense market environment is another debate… 😉

What are some of the most promising sectors for venture capital investment in Europe right now? 

I don’t think I’m going to be very original in saying that everything related to AI will constitute a significant part of the investment. However, I think that in terms of the structure of these investments, these are going to be significant amounts in relatively few companies. Unlike B2B SaaS which will continue to attract a lot of funding but with relatively lower amounts in a relatively larger number of startups.

Beyond that, within Blueprint VC there are two sectors for which we have taken a slightly more proactive approach in terms of dealflow, these are HealthTech and everything linked to Climate and Decarbonization because we have a very positive long-term vision. We believe that the issues linked to these two segments are essential and must be addressed and I also believe that the added value of diverse teams is even stronger in these segments.

What was your reasoning behind making your fund sector-agnostic?

The choice to be sector agnostic lies in elements that are purely mechanical and/or financial. Namely, a diversification of risk, a larger pipeline, and therefore a higher rate of selectivity, and agility with regard to our strategy to try to be ahead of trends, etc.

Then some elements are a little more intangible. For example, I am quite convinced that in early stage the needs of entrepreneurs are very similar, whether in terms of organization, recruitment, financing, etc. I don’t have the feeling that early-stage specialization has any impact on the fund’s performance. Maybe potentially on dealflow but given our strategy on typology of founding teams, I’m not too worried about that.

Finally, on a personal level, I find it more intellectually stimulating to be confronted with different sectors, or even different situations. Possibly drawing inspiration from completely different sectors to advise/support entrepreneurs from another sector, etc. It also prevents boredom and a potential drop in motivation for me.

What, if any challenges have you faced as one of the few Black fund managers in Europe?

First thing to say is that for everyone, whoever you are (except a few very privileged people) it is very difficult to raise a fund (especially a first one), especially in a market environment such as what we have known since mid-2022.

Then obviously when we come with an “original” thesis, which has not yet been deployed in continental Europe and with a typology of GPs that we are not used to seeing, we indeed experience difficulties. 😉

Finally, putting aside aspects linked to bias and possible stereotypes (which I cannot measure in any case), it is true that we had limited access to networks of LPs such as HNWI, Funds of Funds, etc. but we built it little by little. So, it takes time, and you just must be aware of it.

How do you see the European VC landscape evolving in the coming years? What trends do you expect to see emerge?

I think a lot of funds will disappear over the next few years. However, I don’t think it’s a bad thing in absolute terms.

I think that the number and size of funds, in addition to the available cheap money and an unprecedented global environment linked to COVID, led us to the bubble that we experienced at its peak in 2021. It is therefore normal or even healthy that there is a correction.

If we can take advantage of this correction to restore the structural inconsistencies of the market, that is a good thing.

I don’t know what the future will hold at this level. But what I hope because I think it will be a good thing for the ecosystem and its efficiency is that:

• there is a real segmentation between the funds and their investment phase (pre-Series A, post-Series A/Growth, Late stage, etc.)
• the number of early stage (pre-seed/seed) funds will be very large but with significantly lower average AUM

What advice do you have for other emerging fund managers?

The following fundamentals should be mastered before considering contacting LPs to raise a fund:

• Develop an ultra-clear investment thesis that demonstrates that you have thought through all aspects from the genesis to the exit of the fund through execution.
• Mastering portfolio construction is essential. Show that you have thought in detail about the unit economics of your fund and that you have considered a certain number of scenarios.
• Surround yourself with a complementary and exceptional team on each of the added value topics that you offer to your portfolio companies.

Once you have these basics, the essential point is to distribute your time well with potential LPs. My recommendation is to spend a lot of time early on with LPs that are intrinsically aligned with your investment strategy AND that can put an anchor investor ticket.

At the same time, you start building the relationship with the other LPs and once the anchor(s) have confirmed their interest (by committing) you accelerate the discussions with the others.

by Tony O. Lawson

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