Interview with Yann Tissot, CEO of L.E.S.S.
27.04.2015
Lausanne based L.E.S.S. started in 2012 with only two people. Three years later, the company employs six employees, won the most prestigious innovation and business awards in Switzerland and is ranked 2nd in the TOP100 Swiss Startups. On April 28th 2015, L.E.S.S. announced closing a CHF 3.0 million Series A financing round and is ready to boost the revolution of lighting further.
 L.E.S.S. started with two people (Yann Tissot, CEO, and Simon Rivier, CTO). Their first financing round will help them grow to more than 12 people and boost their sales.
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Hello Yann, and congratulations for the great news! Why did you decide to embrace the entrepreneurial path?
I think I was born entrepreneur in a sense that I always chose my different jobs with curiosity, passion and commitment. Unfortunately, I never met an inspiring boss such that launching my own venture was a logical way of living an exciting professional life.
If I am not wrong, you raised CHF 800’000 in seed money through non-dilutive competitions and startup support over the past years. Now that you’ve raised your first round of CHF 3 million, how do you look back at your initial seed funding strategy?
I think you have the financing strategy that you can afford at the time you are looking for money. In our case, we have an industrial project where the risk is to stay forever in the “chicken-and-egg” configuration: The customer wants a working product that requires significant product development and investors want clear indicators on sales at a very early stage to decide on financing.
Unfortunately, we needed key infrastructures to build our first products and subsequently address our first customers. In other words, addressing our market was costly with a long-term ROI (return on investment) which is not the ideal constellation. Therefore, we did not have much choice: We needed to finance this infrastructure whatever the mean and winning all these prices was the chance we had to catch.
Switzerland is fantastic for pure seed money and I am glad we seized these opportunities, and that we have been lucky enough to win sufficiently prizes to finance a part of this infrastructure needed and get out of the “chicken-and-egg” loop.
Do you plan to raise more money in the future (and was this first round difficult)?
Yes, the plan was always to raise money and this for three reasons. First, we need a costly production infrastructure at a too early stage to get any standard bank loan. Second we are active in high volume markets where you need to get over a critical production and sales volume in order to be cash positive. Finally, the sales cycles of the industry are pretty long such that they impose cash flow spikes to the company that can kill it at an early stage.
Obviously, it was difficult to raise money because of the three reasons mentioned above. In addition, the world of hardware components, moreover in fast growing markets, is dominated by companies located in Asia. This makes it difficult to find financing in the western world.
Besides VI partners, venturelab’s network, via its Founders Cash Pot, contributed to L.E.S.S.’ first financing round. What is your feedback about venturelab’s contribution, and the novelty that our program brings in the Swiss startup investment scene?
Raising substantial funding is very challenging in Switzerland, particularly in the hardware field. Gaining the support of successful Founders with solid financial capacity is essential. As former founders, they understand the entrepreneurial dynamics and what it takes to build a global company. venturelab’s approach connects founders in a straightforward and efficient manner.
Among many prizes and recognition, you are Switzerland’s second startup in the TOP 100 Swiss startup ranking (the best in French speaking part of Switzerland), won Venture Kick stage 3 and were a venture leader (USA and China). Take the TOP 100: How did it help you for example?
We did not have much money dedicated to marketing and sales and the TOP100 gave us a boost in visibility and credibility. Customers in our industry may sometimes be reluctant to enter into discussion with startups that future is not necessarily secured. Being selected nr. 2 in Switzerland by experts allowed to decide some of our customers.
About recruitment: How many employees did you start with and how many do you have now?
We started with two people, Simon Rivier and I, and are six employees today. I am proud that the payroll is entirely covered by our early turnover. The financing round will help us to grow to more than 12 people and boost our sales.
I think I was born entrepreneur in a sense that I always chose my different jobs with curiosity, passion and commitment. Unfortunately, I never met an inspiring boss such that launching my own venture was a logical way of living an exciting professional life.
If I am not wrong, you raised CHF 800’000 in seed money through non-dilutive competitions and startup support over the past years. Now that you’ve raised your first round of CHF 3 million, how do you look back at your initial seed funding strategy?
I think you have the financing strategy that you can afford at the time you are looking for money. In our case, we have an industrial project where the risk is to stay forever in the “chicken-and-egg” configuration: The customer wants a working product that requires significant product development and investors want clear indicators on sales at a very early stage to decide on financing.
Unfortunately, we needed key infrastructures to build our first products and subsequently address our first customers. In other words, addressing our market was costly with a long-term ROI (return on investment) which is not the ideal constellation. Therefore, we did not have much choice: We needed to finance this infrastructure whatever the mean and winning all these prices was the chance we had to catch.
Switzerland is fantastic for pure seed money and I am glad we seized these opportunities, and that we have been lucky enough to win sufficiently prizes to finance a part of this infrastructure needed and get out of the “chicken-and-egg” loop.
Do you plan to raise more money in the future (and was this first round difficult)?
Yes, the plan was always to raise money and this for three reasons. First, we need a costly production infrastructure at a too early stage to get any standard bank loan. Second we are active in high volume markets where you need to get over a critical production and sales volume in order to be cash positive. Finally, the sales cycles of the industry are pretty long such that they impose cash flow spikes to the company that can kill it at an early stage.
Obviously, it was difficult to raise money because of the three reasons mentioned above. In addition, the world of hardware components, moreover in fast growing markets, is dominated by companies located in Asia. This makes it difficult to find financing in the western world.
Besides VI partners, venturelab’s network, via its Founders Cash Pot, contributed to L.E.S.S.’ first financing round. What is your feedback about venturelab’s contribution, and the novelty that our program brings in the Swiss startup investment scene?
Raising substantial funding is very challenging in Switzerland, particularly in the hardware field. Gaining the support of successful Founders with solid financial capacity is essential. As former founders, they understand the entrepreneurial dynamics and what it takes to build a global company. venturelab’s approach connects founders in a straightforward and efficient manner.
Among many prizes and recognition, you are Switzerland’s second startup in the TOP 100 Swiss startup ranking (the best in French speaking part of Switzerland), won Venture Kick stage 3 and were a venture leader (USA and China). Take the TOP 100: How did it help you for example?
We did not have much money dedicated to marketing and sales and the TOP100 gave us a boost in visibility and credibility. Customers in our industry may sometimes be reluctant to enter into discussion with startups that future is not necessarily secured. Being selected nr. 2 in Switzerland by experts allowed to decide some of our customers.
About recruitment: How many employees did you start with and how many do you have now?
We started with two people, Simon Rivier and I, and are six employees today. I am proud that the payroll is entirely covered by our early turnover. The financing round will help us to grow to more than 12 people and boost our sales.