1. Business Angels
These natural persons invest part of their personal savings in a company. Anyone can become a business angel (BA), but it is often former entrepreneurs or seasoned senior executives who want to support a project that is close to their heart. 4,500 business angels are active in France and have invested 37.3 million euros in 2018†
Business angels usually organize themselves in an association or an investment company (Siba) to invest in projects with amounts between 300,000 and 500,000 euros during the start-up phase. the average ticket of a business angel fluctuates between 10,000 and 20,000 euros per year. According to France Angels, who unites them, there are 64 networks, such as Femmes Business Angels or Seed4Soft.
In addition to financial support, business angels make their address book and expertise available. For her first fundraiser – EUR 400,000 raised in March 2018 – entrepreneur Marie Eloy chose BAs for all these reasons. †
And then we were looking for investors who did not place restrictions on us that were impossible to maintain and who were convinced by the project and its strong human dimension.
† trusts the founder of Bouge ta Boîte, who has just second financing round of 1.3 million euros†
2. Crowd Equity
Like BAs, crowd equity investors are usually individuals who invest in early stage companies by buying shares in the capital. They go through a platform that specializes in this type of crowdfunding. The latter then sets up an investment holding company that will represent the shareholders. The money is therefore collected faster, sometimes only 48 hours after opening. Paul Mariani and Simon Rezofounders of premium soft drinks UMA, have chosen this way of fundraising. At Tudigo (ex-Bulb in Town) they currently collect 300,000 euros, with an admission ticket of 1,000 euros and an average ticket of about 7,500. †
For our first round, we were looking for sympathetic investors willing to share their network and their know-how to help us with our strategy.
† summarizes Paul Mariani.
† The projects financed amount to an average of 1 million euros, for an average ticket per investor of 25,000 euros per year, spread over several companies says Joachim Dupont, president of the Anaxago platform. Today, the market is concentrated and there are only a handful of crowdequity platforms in France, including Anaxago, Tudigo, and Wiseed. Together these platforms have amassed 47.1 million in 2018a decrease of 19% compared to 2017. A figure that could increase thanks to two provisions of the Pacte law that promote crowd equity. †
Starting with the integration of these securities into traditional savings products, such as the PEA, the PEA-PME and soon perhaps the Retirement Savings Planexplains Joachim Dupont. But the most expected remains the increase of the threshold for fundraising from 2.5 to 8 million euros.† †
3. Investment Funds
Of 14.7 billion euros invested in 2018 in more than 2,200 companies, investment funds are the juggernauts of fundraising, turning to ambitious companies that have significant financing needs and want to act quickly in the realization of their projects. The average amounts raised vary depending on the one initiation stage or “seed” (about 2.5 million), a A series (about 7.8 million), with a B series (more than 20 million) or more (more than 70 million euros).
There are different types of investment funds: institutional (bpifrance, Eurazeo, etc.), private (Alven Capital, Isai, Idinvest Partners, etc.), sectoral (Demeter Partners, Partech, XAnge, etc.), regional (Finorpa, etc. . ) or others who manage a personal fortune, such as Kima Ventures with Xavier Niel. Foreign investment funds are also very active in the French ecosystem, such as Accel, Bain Capital, White Star Capital or Index Ventures.
4. Company Funds
More and more large groups are interested in start-ups and are creating their own internal funds to put in their capital. †
Mostly corporate funds (HVAC) invest in start-ups in the same industry as theirs, and sometimes create synergies with them
† explains Agathe Wautier, CEO of The Galion Project. Their vision is therefore quite long term : They don’t aim for a five to ten year exit like traditional mutual funds. These are, for example, Total Ventures, Orange Digital Ventures, Crédit Mutuel Arkéa or even Mérieux Développement and Safran Corporate Ventures.
Since 2013, corporate funds have invested 2.7 billion in the capital of French companies and the trend is growing. †
CVCs are engaged in: professionalize and gain ground
† analyzes Agathe Wautier.