French business angels in lack of oxygen, Financing

The explosion of fundraising for five years does not change anything, the number of French business angels and the amounts they invest are struggling to rise. In 2019, they injected a total of around 43 million euros, an increase of 16% compared to 2018, but down next to the 48 million invested in 2017, according to France Angels, the association that brings together 5,500. .

“We want more business angels in France, and given the needs, we need 10,000”, assures Guy Gourevitch, president of France Angels. At the same time, the representative of these private investors emphasizes a phenomenon that seems to be moving in the right direction. “70% of investments are made by several people in a network. It is a movement that increases ticketing efforts on start-ups thanks to a ripple effect on public and private actors. » But this wish has not yet come true. The number of transactions between 200,000 and 500,000 euros fell from 71 to 41 in one year, while only the proportion of tickets under 50,000 euros increased (from 148 to 164 bets between 2018 and 2019).

A political issue

“If we put aside the activity of ‘superbusiness angels’, the share of these individual investors in French Tech will remain lower than in the UK or the US.notes Franck Sebag, partner at EY. In France, they represent less than 10%, while across the Atlantic they are 22% with a budget of $ 22 billion. » Cultures and history largely explain this discrepancy, but are not enough to justify a gap that is struggling to narrow.

France Angels proposes tax measures to release this brake, in particular by increasing the tax exemption rate (from 18 to 50%) and the ceiling (from 10,000 to 50,000 euros). “We want to limit this measure to two years to encourage calls to drain savings toward the real economy and no longer toward real estate or banking products.”, says Guy Gourevitch. Other technical points are put forward, such as reducing the net loss of the taxable income base or the possibility of reinvesting the capital gain on disposal, which results in a tax deferral.

To this end, the political terrain seems to be undermined by the debate over the repayment of wealth tax, and its defenders have few illusions in the short term. “It is a pity that the IFI cannot be invested in start-ups, especially at a time when they are going to suffer particularly hard in the start-up phase.”adds Franck Sebag.

Development of the approach

During the period of the coronavirus crisis, the number of new files supported by business angels appears to have already dried out, notes Charles Degand, CEO of AngelSquare: “In the period from April to June, we recorded a 30% decrease in activity, but no operation was canceled. However, the criteria have evolved and our business angels are focusing more on rational aspects such as profitability or expense level.”

Last lesson of the barometer for France Angels, the maintenance of the entrepreneurial structure in the region. If the majority of investors are in Paris (54.5%), two thirds of them invest in companies in the rest of France. This is especially the case with Arnaud Laurent, who performs operations from Montpellier. I cover the axis from Bordeaux to Nice, where 90% of the VCs have no ‘dealflow’ due to lack of proximity. » And anyone who has particularly supported nuggets like MWM, Getfluence or OnOff remains convinced that if the number of his peers does not increase, the pool and desire will remain very strong: “Former BA entrepreneurs are attracted to the adrenaline that accompanies the start of the adventure. They are motivated by this stage where everything has to be built and which, if not crossed, is dead. »

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