TheFamily Archives - Product Management Confabulation

The Family co-founder and CEO Alice Zagury has announced in a blog post that the French startup accelerator is suing Oussama Ammar for multiple claims — breach of trust, forgery and use of forgery.

More specifically, Capital first reported that The Family suspects Ammar of diverting €3 million that were supposed to be invested in several startups through syndicates. TechCrunch has separately seen an email that confirms ongoing charges against Oussama Ammar. It that was sent to people who transferred money in order to become shareholders in Stripe through a special purpose vehicle. The SPV was supposed to acquire Stripe shares through a secondary offering.

“Oussama transfers funds to his personal holding companies and tells us after the fact, saying that it’s the only way to take advantage of investment opportunities in question,” Zagury wrote in her blog post.

According to her, other people working for The Family have asked several times to see documents that proved that investments went through. In November 2021, Ammar announced on LinkedIn that he was moving on and leaving The Family.

“On Friday, my resignation was published on the Companies House website. From now on I am no longer a director of The Family and I will gradually leave this ecosystem,” Ammar wrote on LinkedIn at the time.

“The ecosystem has changed a lot and raising money is not as difficult as it used to be. It has become normal to raise funds long before you have a product/market fit, and this poses challenges to entrepreneurs that are of a very different nature than those the ecosystem has faced in the past years,“ he added back in November 2021.

Zagury now says that The Family asked him to leave the company in September 2021. “We bring in a mediator then several law firms as well as an independent auditing firm (PwC),” Zagury wrote.

According to our information, The Family is working with several law firms across several jurisdictions. Capital talked with one of the company’s lawyer Elsa Sammari. She said that there are multiple ongoing cases — they are examined by criminal and commercial courts. “The Family has initiated two proceedings to freeze Oussama Ammar’s assets and the assets of his personal holding companies,” Sammari told Capital.

It’s not going to be a straightforward case as Ammar’s holding companies are spread all over the world, including in the Cayman Islands and Hong Kong. Ammar also recently edited his LinkedIn profile saying that he is based in Dubai.

Yesterday, Ammar has reacted to Capital’s report in another LinkedIn post. “This is a legal proceeding between partners with some lingering resentment. Splitting up like this is a shame but it’s frequent. Entrepreneurs know this well. Since 2020, we have been trying to find an amicable solution. But we haven’t reached an agreement despite long hours of negotiation,” Ammar wrote.

In 2018, Ammar was given a four-month suspended sentence for a separate case. Back in 2011, Ammar used to work for a company called Be Sport. The company filed a lawsuit for breach of trust, forgery and use of forgery. At the time, Be Sport claimed that Ammar had been using some of the company’s funds for non-corporate expenses.

The Family was originally founded in 2012 with three co-founders — Alice Zagury, Oussama Ammar and Nicolas Colin. They teamed up to build a different kind of startup accelerators without any batch or demo day. Instead, startups could apply and join the community of startups backed by The Family.

In exchange for a stake, they could get some advice from The Family’s team and network with other people in the community. The Family has also helped some of the startups in its community when it comes to fundraising.

Zagury listed some of The Family’s portfolio companies in her blog post. They include Heetch, Algolia, Payfit, Spacefill, Trusk, Northflank, Jow, Joone, Jinka, Doctrine, Merci Handy, So Shape, Side, Vybe, Dark, Unai, WeMaintain, Flat, Fempo, Shipix, MyDiabby, Bellman, Fairmint, Artsper, Cabaïa, Plume, Alma and Kymono.

A few years ago, The Family was a cornerstone of the French tech ecosystem. The Family’s office building was as a physical representation for a new wave of French startups with global ambitions.

Over time, The Family diversified its activities with an education business and a digital transformation business. In total, The Family has raised €22 million ($24 million at today’s exchange rate).

The Family has always been an ambitious startup accelerator. But it has always felt like the company never had enough money to grow as quickly as it wanted. The Family is raising a new $17.4 million funding round (€15 million).

Private banking and asset management group LGT Capital Partners is leading the round, with HummingBird Venture, Project A, eVentures and others also participating.

“It’s the first time an investor understands The Family’s business model. It’s the first time an investor isn’t trying to turn us into a VC fund,” The Family co-founder Oussama Ammar told me.

According to him, The Family is basically going to do more of the same. Except that this funding round “makes [The Family] virtually immortal.” The Family had to double-check its bank account many, many times to make sure that there was enough money to pay all its employees. This funding round should let the company catch its breath.

The Family has fine-tuned its fellowship program over the years. Here’s how it works today. Every quarter, around 20 startups join The Family. They will attend onboarding sessions in Paris, Berlin and London.

In Paris, The Family’s team is focused on product and engineering. In London, The Family can help you raise money. And in Berlin, The Family’s team is all about operations and execution.

After the onboarding stuff, companies can still seek for advice and connections. There’s no demo day and end of batch. The Family plans to support startups when it comes to funding, product, hiring and more.

Being part of The Family is not free of course. Startups need to be willing to give away 5 percent of their equity in exchange of this support system. This isn’t for everyone and many entrepreneurs are already surrounded by a supportive ecosystem. So if you don’t think you’re getting enough value, you can ask for your shares back within a year.

I’ve covered some of The Family’s startups over the years, such as Agricool, Algolia, Clustree, Comet, Doctrine, Fretlink, Heetch, Nestor, Payfit, Side, Stanley Robotics, Trusk and more.

With today’s funding round, The Family plans to invest in every funding round after a startup joins the fellowship. As a startup, if you can find a lead investor, The Family will automatically join the round with the same valuation and conditions.

But the fellowship is just one side of the story. “Our goal with the fellowship is that we never exit because we want to maximize the returns on investment,” Ammar said.

In order to support a staff of 60 people around 3 countries, The Family had to find a way to make money before those long-term exits. That’s why the company has launched other products.

For instance, Pathfinder helps big companies become digital companies, Lion educates startup employees and Kymono sells startup sweatshirts. The Family has spun off all those products into their own companies. They all have a dedicated CEO and team, but The Family retains at least 60 percent of the shares.

And The Family wants to create more side businesses like those. It seems like The Family is leveraging this model to finance all the fellowship activities.

Eventually, The Family’s dream is to be able to follow portfolio companies at every step of the way. It’s clear that you don’t need as much external support if you’re a Series C company. But The Family wants to become an infrastructure company that lets you build European tech giants.