“We want to be leaders in this in Luxembourg,” says Gener8tor Luxembourg’s managing director Menachem Tabanpour, speaking about promoting diversity and gender equality in the startup world.

“There are some good things here,” he adds, citing the (relatively) small salary gap between male and female employees in Luxembourg. “But when it comes to [diversity in] entrepreneurship, business ownership and support for tech startups… I think there is something lacking.”

Gener8tor is a US-based venture capital firm and accelerator focused on early-stage startups, with some 150 employees and $1.5bn in total funding. The Luxembourg office (operating one €3m fund for US and Luxembourg professional investors) is its first expansion overseas and opened in March of 2022 with the arrival of Tabanpour, who hails from New York but studied in Wisconsin, where he founded and ran a cleantech company called Nutrient Recovery and Upcycling for ten years.

(Wisconsin is also home to Gener8tor’s HQ, forming yet between the US state and the grand duchy.)

“Luxembourg was a kind of launchpad for Europe for us,” says Tabanpour, adding that the firm is also already exploring markets in Belgium, Germany, Austria, Italy, France, Estonia and Finland. For now, he runs the office with the help of just one US-based program manager.

Promoting diversity

In an interview, Tabanpour describes conversations he has had with professionals in Luxembourg’s startup ecosystem in which they said that emphasising diversity in company founders sounds like a good idea. It does, agrees Tabanpur. And he laments that they don’t always follow through on it.

Having arrived to Luxembourg only in 2022, the managing director seems to have a first impression of the country’s startup scene as problematic from a diversity perspective. Besides obvious gender imbalances in terms of the number of female entrepreneurs on stage at certain pitching events, he has also observed double standards. “She would get questions that they would never ask male founders,” he says of a female CEO he saw pitching at an event in Luxembourg. “She would get intrusive compliments, other things like that.”

Hence, Tabanpour’s wish for his firm to do better: across Gener8tor, some 40% of its 1,000+ startups have at least one female founder. By comparison, in Luxembourg’s startup sector generally that number is closer to 12% (according to the May 2022 report).

“At a minimum, you’re overlooking some really great people who need support,” he says of failures to properly include female entrepreneurs or those from diverse backgrounds. “And at a maximum you’re kind of destroying the ecosystem by not supporting them.”

What (else) do you look for in a portfolio company?

Certainly, diversity plays a role for Tabanpour in selecting startups for his firm’s acceleration programs (of which there is currently one per year and a plan to eventually have two). But what else? “Every director has some leeway,” Tabanpour explains, naming two aspects important to him: a sustainability focus and a deeptech industry transformation focus. Though for the last accelerator, he adds, the firm accepted applications from all company types.

With a cleantech background, Tabanpour is also interested in that area--and with experience in deeptech more generally, he says, he is well-placed to understand a company’s actual technology. “So I like to get into that and really see how the inner workings of things are.”

Like any VC firm, he adds, Gener8tor also evaluates whether the startup has a truly innovative offering, a good team and the ability to clear due diligence processes. 

Gener8tor’s Luxembourg fund recruits from all around Europe, but Tabanpour also wants to emphasise local startups in particular. The firm’s last accelerator had two companies from Luxembourg (and a third that dropped out), plus three from elsewhere in Europe. “We recruit very widely,” he says, explaining that if you don’t cast a wide net you won’t find a large enough selection of teams with female leadership or diverse backgrounds.

The firm goes for early-stage startups, which Tabanpour defines as those with “a little bit of traction” such as a few customers, a successful pilot and some presales or other indications that they are ready to scale. “We’re usually the first or second investor in that company.”

What does Gener8tor offer?

What the company gets is €100k in exchange for 7% equity, plus 12 weeks in the firm’s accelerator program and some additional support afterwards. “The thesis behind this is that, when you combine the funding and support, that company will be much more ready to scale, raise money and grow. And that’s been successful across all our funds so far.”

Tabanpour is himself a startup coach, and enjoys the role. “We don’t try to ‘work’ the company, really. We take more of an approach of: if this is going to work, let’s give it as much support as possible.”

What would you want the general public to know about the VC industry?

“We’re the only private accelerator in Luxembourg,” says Tabanpour in response to this question. “Our intent is to be a partner to the community and make new partnerships in the community, to continue to grow and be an additive part of the Luxembourg startup ecosystem.”

He adds that Gener8tor Luxembourg’s ambition is to eventually raise additional funds. “But we need more partners for that so that we can continue growing our roots in Luxembourg and also attract more startups from the EU to Luxembourg.”

“If everything worked out our way,” he concludes, “we’d be kind of a central pillar for the startup ecosystem in Luxembourg.”

This article was updated on 21 April 2023 to clarify information from the interviewee that later proved to be speculative.