Virginie Berger has joined Belgian venture-capital fund LeanSquare as a venture partner, moving from pan-European licensing platform Armonia, where she served as CEO for the past two years.
As well as being founder of Paris-based tech/media consultancy DBTH, Berger’s career has also included stints at Microsoft, NRJ, Omnicom and MySpace France.
Her role at LeanSquare involves running its music technology investment programme globally. She will also serve as the content director of Wallifornia Music Tech, a series of events focused on music and new technologies, from conferences to hackathons.
“The content here will be at the crossroads between entrepreneurship, innovation and communication,” she told Music Ally, as she announced her new job.
LeanSquare’s role, Berger says, is to nurture the next generation of platforms and services in digital and back them in a variety of ways – including co-investment, offering seed funding or via equity – across a range of sectors including music technology, media technology and e-logistics.
In the past four years, LeanSquare has invested €27m across some 50 startups, with key music investments including Musimap, Playground and Soundbops.
“We invest in seed funding, but we are able to invest more if needed and if we see potential,” she said of its funding approach. “The context now is right for startups to innovate in music. There are companies in the music space which are beginning to turn a profit and the digital music market is maturing. At LeanSquare we want to be encouraging the energy to drive positive change.”
What will Berger and LeanSquare be looking for in music/tech startups? She has a solid checklist of attributes in mind.
“They need to be able to understand both sides of the market, namely music and technology, as well as consumers’ behaviour and experiences,” she said. “I’m looking for potential and solid foundation.”
Berger does, however, see something of an entitlement issue with some startups that are damaging not only to them (and their investors) but also to the VC ecosystem as a whole.
“I’m not interested in startups that are claiming that ‘the whole market or the whole ecosystem need to change’” she said. “If the whole ecosystem is not interested in what you are building, then you are the issue.”
Berger added that her focus is on helping take startups to market that fix existing problems rather than those trying to second guess problems in the future. “The only question that matters is this: does it solve the problem I have today, or does it solve a problem that I might have?” she said. “If it’s the latter, we’ll talk again in a year.”
As Berger explained at the recent by:Larm conference in Oslo, her current concern is blockchain – or, to be specific, certain blockchain startups – which she regards as at risk of becoming a toothless hype.
“A lot of the blockchain ideas I see out there are really speculative. I think that a lot of the people out there fail to deeply understand the issues and technical complexities,” she said.
“Most of them don’t really understand that there isn’t one copyright in one song — it’s potentially an unknowable number of rights scattered across the whole work… But there’s a handful of companies with good ideas how to use some of the blockchain technology, and the industry definitely needs it. The thing is to ignore the word ‘blockchain’ and to ask what they actually do.”
While Spotify has made it to a direct listing in the NYSE and streaming services have sucked up the bulk of VC cash in the music space, Berger feels there are long-term problems with the model underpinning most of these access-based services.
“The streaming model as it stands now is fundamentally stacked against middle-class artists and emerging artists,” she said. “Some 90% of the revenue is going to 1% of the artists. A solution to this is to create alternative technologies and models that provide authority and accountability.”
A decade and a half ago, the dotcom bubble saw tech companies and VCs unhook themselves temporarily from reality and brought the whole edifice down around themselves. To avoid a repeat of that rapid boom and bust, VCs have to less dazzled by hype and more analytical in their approach.
For Berger, if we want a healthy VC and startup environment tomorrow, we have to start posing the tough questions today.