Founded in 2016 to invest in Belgian and Northern French companies, TheClubDeal brings together one hundred Belgian and French families, along with three institutional investors. Its core mission since its inception has been to support entrepreneurs in our regions and help bring their projects to life. We spoke with Jean-Marc Legrand, the founder of the company.

What is the mission of TheClubDeal, and what are its objectives?

Jean-Marc Legrand – We are a group of individuals who decided to reinvest in Belgium for various reasons. The first is our belief that there is talent and deserving entrepreneurs in our regions. We hope they won’t need to move abroad to continue their entrepreneurial journeys. We’ve observed many of our major companies being sold in the 1990s and 2000s, with key decision-making centers relocating to neighboring countries. As a result, local talent had fewer career opportunities in Belgium. The choice for our brightest citizens was either to expatriate (and many did), or to start a business in Belgium to stay in our pleasant regions. It’s these entrepreneurs that we aim to support.

 We assume you’re doing this in a way that’s not purely altruistic?

Indeed. Investing in entrepreneurs and their businesses is not a philanthropic endeavor. Quite the opposite. We believe that beyond contributing to the dynamism of our local economies—measurable, for example, by the value-added jobs created by these companies—entrepreneurial ventures should also create financial and economic value. This value is shared with the entrepreneurs to whom we entrust capital.

How would you describe the Private Equity segment?

Private Equity is investing in unlisted companies. In financial jargon, we refer to “Venture Capital” for earlier stages of a company’s development. The lack of a public listing implies greater illiquidity and thus the need to understand that the investment will take time to potentially deliver a return. Depending on how far along the company is since its inception, the risk decreases based on the relevance of its positioning, the products, or technologies it develops and brings to market.

So, is Private Equity a risky investment?

Every investment in any asset class involves risk, with the main risk being the creditworthiness of the debtor, whether it’s a state or an SME. What we appreciate about investing in local SMEs is the tangible and close nature of it. To clarify: investing in companies listed on the Nasdaq (USA) or the Nikkei (Japan) may be more liquid, but carries different kinds of risks. We often don’t know the entrepreneurs or, sometimes, even their products. We prefer to form alliances with entrepreneurs who are nearby, so we can easily support or reach out to them. Investing in companies must be done in a climate of trust. We often talk about “good governance.” For us, good governance is simply a factor of trust, created through transparency and measured progress. Measured progress results from a concrete strategy, where we evaluate together the progress (or delays) based on concrete and measurable objectives. A good partnership is built on good governance, which boils down to mutual trust between the entrepreneurs and their financial partners in the shared management of the company.

You mentioned financial and economic returns for the investor. Is there a contradiction with the entrepreneur’s goals?

For various reasons, it is essential to create and measure a company’s economic value. This doesn’t necessarily lead to the entrepreneur being ousted during a sale. Quite the opposite. Different options exist and are often practiced, such as financing the buyout of the company by the entrepreneur (LMBO), or more simply, taking the company public. The investor’s horizon may differ, but no investor—regardless of time—likes to see value destruction, just like the entrepreneur who often dedicates a significant part of their life to the business. Therefore, measuring value creation is a goal where all interests align.

TheClubDeal, the name of your company, suggests a club that makes deals?

That’s right. We started in 2016 by seeking out companies, then decided to invest in them and invite co-investors to join the Club Deal. Fairly quickly, some asked us to pool capital, invest, and oversee it, without having to evaluate the merits of a specific club for each company. So, we launched a fund that still offers the option of co-investing. This allows a fund member to decide, if desired, to increase their exposure to a company backed by the fund. It’s true that the name can be a bit misleading. Today, we represent one hundred Belgian and French families who have given us a mandate to invest together in companies in Belgium and Northern France. In addition to these families, we now also have three institutional investors.

How do you select your investments?

The life of a fund is about selection, support, and value creation. So, selection is fundamental. We are entrepreneurs rather than sector experts, and we rely on specialists to advise us on the relevance of a company’s mission. We’ve decided to specialize in three sectors that allow value creation in our regions, despite a social or fiscal environment that may be less competitive than elsewhere. These sectors are, first, technology, second, smart living, and third, life sciences.

What skills are needed to select an investment?

First, it’s crucial to understand the key aspects of the “investment thesis.” For this, we’re assisted by industry specialists who help us analyze the value proposition. Then, we must determine whether the investment metrics align with the risk the investor is willing to take. This involves factors like the entry price, growth prospects—both tangible (revenue growth and quality) and intangible (barriers to entry and the disruptive nature or goodwill potential). Finally, we ensure that the respective rights and duties in the partnership are well-defined, as they are key to good governance.

These points are reviewed by an investment committee. We deliberately composed it of experienced entrepreneurs who have previously encountered diverse situations in the sectors we support. Among these entrepreneurs are Mr. Speeckaert (representing the investors), Mr. Boonen (serial entrepreneur in industry), Mr. de Radiguès (serial entrepreneur in industry), Mr. Heynderickx (serial entrepreneur in retail), Mr. Verbeeck (serial entrepreneur in smart living), Mr. Van Houwe (tech entrepreneur), Mr. Bonnet (serial investor), and Mr. Dubrule (serial entrepreneur). The executive team consists of graduates in finance and entrepreneurship and is responsible for daily analysis and supervision of investment cases. We’re also surrounded by our investors, both French-speaking and Dutch-speaking, from Belgium and France, most of whom are successful entrepreneurs who have decided to reinvest in the entrepreneurship of our regions.