Geneva : the Old City

Mr. L. was no stranger to Switzerland when he came to see us. In his youth, he had lived for a year in Geneva, working as a young nuclear physicist at CERN.

But Mr. L. did not become our client because of physics. When we met him, he was one of the top venture capitalist in Scandinavia.

Mr. L. had begun his career in private equity in his 30s. While working as an executive in a Swedish computer company, he started investing his personal savings in a handful of promising Swedish high technology companies. He did well, investing in companies such Telelogic, Entra or NetonNet, multiplying the value of his investments many, many times over. In addition to becoming a millionaire, he also became the president of a company listed on the Stockholm stock exchange.

Geneva, not Switzerland
Despite his success, our client had never forgotten his first love: Switzerland. Having just turned 40, Mr. L. decided to investigate how he could take advantage of the high quality of life, centrality excellent climate and friendly tax regime available in Switzerland. Mr. L. came to see us one day in September to find out how that would be possible. We told him that with his background, many cantons would welcome him as a resident under the investor program. But our client did not want to live in just any canton. He wanted to live in Geneva.

Geneva is one of the most demanding cantons when it comes to the investor program - only a really exceptional application will satisfy the Genevan authorities. Mr L. would not only have to invest in a Geneva company, but we would have to prove that our client would bring unique expertise to the company. That's what venture capitalists call smart money.

Finding a company
Mr L.'s being a professional investor, so he saw the requirement of investing in a privately held company as both a way of becoming a Swiss resident and an opportunity to do business. Mr L. asked Micheloud & Cie to locate suitable investment opportunities . We scouted the canton for local high-tech companies fitting our client's criteria and arranged meetings with a dozen Swiss companies.

Venture capitalist or Business angel? It would be rather hard to name Mr. L.’s profession since few people work like he does. Technically, he is a business angel , investing both time and money in privately held high technology companies. But most business angels are retired businessmen who do it part-time. Mr. L., however, is as professional and dedicated as a venture capitalist working for a fund, although he only invests in own money and has no shareholders to answer to.

Mr Micheloud recalls : « Sitting next to Mr L. while he interviewed high tech companies was a thrilling experience. With his amazing concentration power, he would sit for hours investigating one company after the other, drilling the management with penetrating questions and learning the most minute details of the company’s business, market and financials. Even though it took us an enormous amount of time to locate suitable companies and to visit them, we felt richly rewarded just to have the opportunity to see one of Europe's most brilliant private investors at work.»

Although several companies offered promising prospects, one was way above the others: N****, a Geneva-based internet consultancy designing high-end websites for banks and international organizations. The dynamic founder of this company struck our client as an up-and-coming entrepreneur who could well raise the value of his investment by 10 or 15 times. This is exactly what had happened to one of Mr. L.'s earlier investments. A few years ago, he had invested in Mind, a Swedish internet consultancy. At the time of his investment, the Swedish company also had 40 employees and its business was very similar to N****'s. Only a few years after he had invested in Mind, the company employed over 500 people and is listed on the Swedish stock exchange. With N****, our client saw the opportunity to do it again.

A deal with the company was quickly worked out. Our client would invest CHF.1,000,000 in the company's capital and get a seat on the board.

A meeting with the Genevan authorities convinced them that Mr. L. was a very interesting man indeed to have in their canton. The application swiftly found its way to Bern, where it received its federal approval and our client became a Swiss resident. Mr. L. now lives in a former embassy in the center of Geneva.

Was he satisfied with his investment? You bet. Only a few months later, he increased his stake in the company by several millions Swiss francs to become the second largest shareholder.