2. Organization

2.1. Teams

The companies integrated into the funds are integrated in such a way as to create a diverse group, whose membership size (founder-entrepreneurs) associated with the fund is: (i) sufficiently small for all its members to express themselves appropriately at weekly meetings; and (ii) large enough to create a fund and allow its investors (including members) to achieve a sufficient level of diversification.

The funds represent a team for LFA members, all of whom bear the network’s mark. All LFA members are members of one and one fund and are encouraged to participate in weekly meetings, the basic structure of the network’s operation. 

Funds are not a hierarchically organized place. Each member has an identical share within the fund. Entrepreneurs joining the LFA network join a fund with the aim of developing it. Any external input from companies, a different point of view, innovative techniques, are welcome and should be welcomed with the greatest interest.

A partner pact is signed between the fund’s founding entrepreneurs. It defines the rules of operation, conduct, allocation and redemption of shares as well as penalties for non-compliance with these rules. This pact is secret and allows the negotiations they may have to negotiate to be managed between founders. The Advisory Board is invoked as an independent judge when necessary.

The fund is administered by an independent company owned by the network. Thus, the financial and legal administrative management of startups is by default outsourced to network consultants not belonging to the fund in question. This reassures investors and all members with shares of the fund that finances are managed, controlled and validated by an external stakeholder.

2.2. Organization structure

A non-hierarchical organization must be extremely organized and structured. They follow the organization process determined in advance and accepted by all members of the fund.

Origin

The proposed organizational structure for funds (the basic structure of the LFA network) is the result of extensive research. It will be continuously improved through practice and renewal of funds. Their limited duration allows us to build, sustain and deconstruct in a time long enough to learn from them. The inspiration comes mainly from networks and circles of influence, professional networks, the holocratic system and models of non-hierarchical structures based on biomimicry.

2.2.1. Groups

This organization is structured into groups (sometimes called networks, tribes or circles). There are three types of groups:

  • Project groups
  • Skill groups
  • Expert groups

There are 5 projects (i.e. 5 startups), 5 skills and 5 expertise. The 5 skills are:

  1. Marketing
  2. Development
  3. Organization
  4. Operations
  5. Commercial

Each contractor is in a specific project group, 1 specific competency group and one or more expert groups based on their areas of expertise. The competency groups differ from the expert groups in that they represent a competence in terms of organization and governance, corresponding to the expertise in question: it is a matter of deciding. The team accepts the decisions made by members in their areas of expertise.

This creates the two-dimensional mesh below with the 5 project groups in columns and the 5 skill groups in line:

Fund organization structure

Each entrepreneur belongs to at least two groups: a project group and a competency group. There are 25 entrepreneurs, each taking a box inside the organization. This is not to say that the contractor reserves his time strictly on this part. He is encouraged to accompany all the projects on all the expertise, including those on which he can be trained through shared training.

Skills

The competency does not necessarily correspond to the technical qualification of the contractor (which is called expertise) but to his responsibility and the role he plays in the team.

Responsibility is related to competence as such (for example for marketing: conducting market research, understanding the psychology of potential customers, assessing a need). It’s about organizing tasks, learning from experts and making decisions. The project group accepts the decisions made by each member in its jurisdiction.

The role corresponds to a well-defined position in the organization of the group:

  • Marketing: external relations (stakeholders, investors) and strategic decisions: generally the role of president.
  • Development: conflict management: intermediary between president and CEO, has the power to decide in the role of the judge. He is in contact with the Advisory Board (CC) which can be consulted if his decision is rejected. Then the president chooses a judge in the CC, the GM as well, and the 2 judges determine the final judge.
  • Organization: relations with the interior including the other groups of the fund (meeting organization, project management) and executive decisions: generally the role of General Manager (GM).
  • Operations: usually the role of director of operation or DOO.
  • Commercial: usually the role of commercial director or CMO.

Rotations

Skill groups change every 6 months, after a major milestone:

  1. Prototype
  2. Preliminary results
  3. V2 business plan
  4. Serie A fund raising
  5. liquidation plan

They follow the rotation cycle shown in the above diagram, either marketing – then development – organization – operations – commercial to return to marketing. So an entrepreneur initially starting with the sales role will be in marketing 6 months later.

Exchanges

For the project groups, there is also a rotation every 6 months but it requires the willingness of 2 people within a competent group to interchange their projects. It is also possible to interchange skills after 6 months, although it is recommended to change skills.

Project rotation is not mandatory but is encouraged as the exchange of projects allows group renewal. Thus the contribution of a new quality is permitted in this way. On the other hand, skill groups are consistent throughout the life of the fund. Only project teams change.

Integrating a project team does not mean working exclusively on a specific project. It is a matter of actively participating in a specific project and keeping a focus on that project.

Every entrepreneur is always encouraged to exchange and develop their knowledge. This means sharing with others, teaching, training and being trained within groups, on all skills, projects and expertise.

2.2.2. Meetings

Groups meet once a week. They may invite a member of another group if they consider that their presence can be useful at the meeting. A member has the right to attend the meeting of another group if they accept it. Thus, weekly meetings are organized at least one week in advance and posted on a calendar accessible to all members of the fund.

How meetings work

A meeting begins with a presentation. Each member has the right to speak, in turn, without another member being given the opportunity to speak to him or her.

Assemblies

The teams, the 25 entrepreneurs in a fund, meet once every two weeks. The fund meeting, called assembly, is organized by the project group starting with the first (then the second, and so on). The roles of officers of the assembly are as follows:

  • Chairman: presiding over the assembly, giving the floor, can take it back if it is deemed appropriate.
  • Judge: takes the minutes of the meeting and notes the results of the decisions taken by vote.
  • GM: prepares and organizes the meeting.

Startup stakeholders (employees, interns) or advisory board members may participate in an invitation-only meeting. The meeting will be called an open meeting because no confidential information can be disclosed. They will not have the opportunity to express their voices.

2.2.3. Group start-up

When a new member arrives, its project and competency groups are determined according to the matrix below. It is set up to prevent two members who have arrived one after the other from initially being in the same group.

Determining the initial groups

The expert groups are determined according to the same pattern as the competency groups (mkt, dev, orga, op, com). A member may belong to several expert groups.

2.3. Advisory Board

We talked about the Advisory Board without further details. It is made up of people who do not belong to the fund as entrepreneurs. They are experienced people, whether or not they are connected to startups. The Advisory Board is there to advise, refer and exchange with entrepreneurs. It can give a fresh, exterior look, allowing entrepreneurs to gain height.

The members of the Advisory Board are duly selected by the founders of the fund. The CC can be subdivided into groups related to project groups, competence and expertise.

This essential organ for the life of the fund and its projects is a major asset for the fund’s image with investors. It helps seal the opening of entrepreneurs’ point of view in the organization. In addition, the Advisory Board is actively involved in the management of conflicts between two members of the fund. He then acts as an arbitrator: a first member (accuser) chooses an arbitrator (non-investor) in the CC, a second (defender) chooses another. Both arbitrators select an independent arbitrator in the CC to arbitrate on the dispute.

Governance bodies
LFA