Moving from an interesting and innovative idea into a functioning business model is a challenging endeavour.
Not only do you have to think about how to make it successful, but you will also have to comes to terms with rejection, work stress and building sufficient cash flow to survive – and a lot of entrepreneurs do this alone.
That is where organisations such as The Family step in. Founded by CEO Alice Zagury, the company aims to use community, education, and support networks to guide early-stage startups through their journey.
In 2018, the company successfully raised a £17.4 million funding round, led by private banking and asset management group LGT Capital Partners, which allowed them to expand the business.
The firm says its vision is to “support purpose-driven creators in their efforts to bring value” to society. “We encourage, back and believe in founders even when hardly anyone sees the potential in their vision,” the firm states.
Based in several European countries, The Family has now ‘accompanied’ more than 700 startups over its lifetime and has more signing up every day for their support.
“I started The Family eight years ago now, and we wanted to bring a good environment for entrepreneurs so that they could thrive,” says Zagury, when discussing her motivation for starting her company.
“What I mean by an environment is education, the mindset, the tools and the know-how to access capital and to feel a sense of belonging to a community.”
Zagury founded the company in Paris and quickly expanded across Europe seeking to fill a gap when it came to business mentoring. It was a gap that needed to be filled, and Paris seemed like the perfect place to start.
“I thought that the best way to do it would not be to start another acceleration programme, as we see in Silicon Valley, because in Silicon Valley they already have a certain context and environment with a lot of experience,” she says.
“We decided that the first thing we should start with was education – educating the entrepreneurs by sharing knowledge – so we did that.”
Zagury asked operators and founders from around the world to give testimonials about business and how they started their own companies. These were then posted up on video platform YouTube for budding entrepreneurs to access and learn from.
The Family’s YouTube channel now boasts more than eight million views and 70,000 subscribers. “It’s a lot of testimonials of entrepreneurs sharing how they have been building their startups,” Zagury says.
She believes that educating potential startup creators is vital for success in the future. Once they have learnt from experts in the field, that is when they knock on The Family’s door.
- Connecting it all with Burnmark’s Devie Mohan
- Driving diversity in tech with Priya Guha, Merian Ventures
- The rise of tech for good with Christian Arno, CEO of Pawprint
The firm currently has 150 startups in its portfolio and takes 5% equity in any business they support. And this involves creating and maintaining a community, something Zagury believes is vital.
“It’s even more important right now to have your support system and to be surrounded by a community of peers and people who can take care and help each other out,” she says.
“You need to be surrounded by other entrepreneurs who are going through the same things to help you feel better.”
And a big part of The Family’s business model is this community spirit of coming together and helping each other out to get your business off the ground, and Zagury said it is something her company thrives on.
“When you accompany 150 startups it means you have a group of 800 people, and you cannot treat these 800 people at the same time, with the same intensity,” Zagury explains.
“When you start working with us, it is intense, but entrepreneurs have conversations with my team directly on any kind of issues that they are facing, and we act as co-founders.”
Zagury continues: “We create this direct connection and direct working collaboration, and for the vast majority of startups, this intensity will be very effective in the first year and then, fortunately, they will have raised funds or have found their business model and a way to be profitable.”
However, even once a startup begins to find its feet, Zagury and her team are still there to offer support. “We are still available for any question, and we will still act as if we were their co-founders, but it will be less of our day-to-day tasks.”
And support like that can be a real boost for a business trying to find its feet. Some sectors are booming during the Covid-19 pandemic, such as financial technology, which has accounted for more than one-third (39%) of fundraising in 2020.
Despite these promising statistics, it would be complacent of an entrepreneur to feel they have a smoother path ahead; the changing business landscape is still posing significant challenges for early-stage companies.
In April, the UK Government announced its Future Fund to support the tech sector through the pandemic. The fund, which offered £250 million of matched funding for startups, had more than 464 applications within its first twelve days.
Aside from the financial support and guidance provided to early-stage startups, Zagury says there are additional benefits to being part of a community besides a direct relationship with her team or gaining financial support.
“The value is the fact that you can talk with other startups who are going through the same things as you. It’s about creating this feeling of belonging and this natural way of feeling at ease talking to anyone, to any founders out of the group,” she says.
“That is how you create a community that learns to speak to each other, dares to ask questions and to meet, exchange and help each other. That’s the most important thing.”
So far, the company has been a storming success, but it is no surprise that, like every business around the world, Covid-19 has had a negative impact.
Zagury says: “When it comes to business here in Europe, because of the crisis, which is the biggest crisis that we, as a family and also as entrepreneurs, have ever been through, I would say that it’s a very challenging time.
“It is totally reshuffling the cards and it is forcing us to review the way we work. It forces you to forget the tasks that are not a priority, and to be super focused on what you spend your energy and money on.”
- Smart City innovation top of the agenda at Edinburgh Council
- Lloyds and FinTech Scotland create Launch Innovation Lab
- Hundredth Scottish SME gets funds from Digital Development pot
In a recent survey by the Office for National Statistics, 9% of the UK workforce were on partial or full furlough leave. Data also suggested that 44% of trading firms had their turnover decreased compared to what is normally expected at this time of year.
The unemployment rate has also risen dramatically. Survey results for August 2020 indicated that staff currently on payroll was down 695,000 compared with March of this year.
But challenging times do not mean that there are not good opportunities. The coronavirus has thrown up a lot of issues that companies were quick to ignore in the past but are now having to consider.
“What is good in all this uncertainty is that we must face the real mission of our company and of what we do,” Zagury says.
“There is a good side to this because you go back to your roots and you wonder, is what I’m doing meaningful? Is it useful? Is it really important?”
And taking this inward view will only allow The Family to serve its customers better, especially when you are doing something as important as supporting small startups.
So, does Zagury have any advice for a budding entrepreneur that could be looking to come up with an innovative idea or start a company in the difficult times ahead?
“I would say start from a blank page. Right now, cards are being reshuffled and you have many more possibilities to fix future problems in different ways.
“Do not use the past as an example, or as an experience that you should follow, but start from a blank page and forget about what has been done before. Propose something new.
“When you are an entrepreneur, you may be naïve because you don’t know things and you will learn them on your own, but right now [during the pandemic], that is even more true.
“Many things have changed in the last six months, and a lot of things can change again.”
Alice Zagury will be speaking at the Startup Summit 2020 on the 28th and 29th of October.