For more than a decade, European venture capital has told a simple, almost reassuring story: raise, grow, add value, exit. A structuring narrative, driven by the abundance of capital, low rates and the assumed importation of the American playbook. This story which cracked in 2022 with the rise in rates and a falling tide which reminded us of reality.
Adrien Chaltiel recently published a series of notes devoted to these issues. They serve as a starting point for a cycle of exchanges, the first episode of which we offer here. A dialogue conducted from a precise angle: that of an ecosystem which is no longer content with projecting theoretical multiples, but now questions a more concrete and structuring question: how, and under what conditions, can the value created become liquid?
From an expanding ecosystem to a corrective phase
Adrien Chaltiel’s career almost mechanically follows the major phases of the French tech ecosystem. A lawyer by training, background in M&A, entrepreneur in specialized media, founder of Eldorado at a time when French Tech is entering its acceleration phase, he now observes the ecosystem from a more transversal point of view, focused on governance.
Its observation is that since 2023, the market is not going through a brutal crisis, but a corrective phase. A period where the imbalances accumulated during the years of euphoria appear more clearly. Too much capital, too quickly, oriented towards models sometimes ill-suited to venture capital, with a mechanical effect which causes high valuations, and de facto uncertain liquidity trajectories.
The subject is not so much failure as stagnation, with companies neither dead nor really exited, stuck between valuation levels inherited from another cycle and a more demanding market reality.
The silent shift in investor expectations
What the exchange highlights is a profound shift in investor expectations. For a long time, the performance of a fund was expressed in projected IRR, in expected multiples, in “potential”. Today, LPs (family offices, institutional investors, large business angels) have a completely different interpretation. The metric that is required is no longer the one that tells a future trajectory, but the one that attests to a tangible result: the DPIin other words the cash actually redistributed.
This change is not anecdotal, and changes the way in which funds communicate, structure their portfolios, but also the relationship they maintain with entrepreneurs. The question is no longer just whether a company can be worth ten times as much tomorrow, but whether, at some point, it can generate an exit, even if it is partial or even imperfect.
An imported model, poorly adjusted to the European context
One of the main threads of the discussion lies in this persistent gap between the venture model as it has been theorized in the United States and European reality. The American market benefits from depth, liquidity and a network of buyers which make rapid, sometimes extreme trajectories possible.
Europe, and France in particular, operate in a different framework with fragmented markets, where IPOs are rare, and M&A is less systematic. However, the ecosystem has long been based on a logic of accelerated growth and rapid domination, sometimes to the detriment of more progressive models, but more adapted to local reality.
The comparison with players like Sequoia Capital or Andreessen Horowitz comes up naturally. Not to make them models to copy, but to highlight a gap: these funds have built organizations capable of managing complex trajectories, including restructuring, governance changes, or intermediate exits, a dimension that is still underdeveloped in European venture.
Entrepreneurial fatigue, a financing blind spot
The attrition of the founders is a point that comes up in the discussion. Behind the growth curves and successive rounds of funding, there are years of work, difficult decisions, recruitment sometimes followed by workforce reduction plans.
When liquidity is slow to come, this fatigue becomes a strategic factor. Not because it invalidates the project, but because it limits the capacity to project oneself, to relaunch a dynamic, to consider new options. Here again, the discussion does not name those responsible, but highlights a reality that is too rarely included in the analysis of startup trajectories.
Governance: from a secondary angle to a central lever
It is undoubtedly in the area of governance that the conversation sheds the most structuring light. For a long time, startup boards of directors have often functioned as spaces for reporting and validation, more than as real places for strategic management.
Adrien Chaltiel points out a double limit: a still weak culture of independent directors, and a tendency to reproduce standard schemes, sometimes disconnected from the specific challenges of each company. However, as trajectories become more complex, the capacity to arbitrate, to restructure, to consider alternative scenarios becomes decisive.
It is in this context that he places his current project, Board Project, designed as a governance support tool, intended for both companies and funds.
Organize liquidity rather than waiting for it
The most structuring idea of the exchange is undoubtedly contained in this formula: liquidity can no longer be a passive hope. It must be thought out, prepared, integrated into the strategy from the outset.
This involves mechanisms that are still underused in the tech ecosystem: secondaries, continuation funds, sectoral build-ups, even LBO-type operations. Familiar tools of private equity, but long perceived as peripheral, even contrary to the spirit of venture capital.
However, these options offer a pragmatic response to a central problem: preventing viable assets from remaining permanently blocked, with no way out for investors and founders alike.
Towards a more technical, less mythological venture capital
As the conversation progresses, a less spectacular evolution than it seems, but undoubtedly more profound, emerges, with the transition from venture capital based on growth stories to venture capital based on financial engineering, governance and the plurality of exit trajectories.
If nothing indicates that the venture model is being called into question in principle, its uniform, undifferentiated application seems to have reached its limits. The challenge now is to accept that not all companies are destined to become unicorns, without this invalidating their value creation.
For entrepreneurs, the challenge is to set the terms of the debate without pretense: understand the economic rules of funds, anticipate liquidity issues, address the issue of governance earlier, and consider multiple exit scenarios, sometimes less visible, but more realistic.
We will offer you new episodes in a few days, if you would like to participate in the discussion, do not hesitate to contact me directly: richard@decode.media
