The Paris Business Angels Association now has 180 individual investors from the Paris region. It is one of the most important networks in Île-de-France. It’s part of the France Angels league. Within this association, the principle is as follows: each member invests the amount he wants in start up that he will. Currently, members of Paris Business Angels have a portfolio of 150 start up, mainly present in Île-de-France. In 2021, they invested more than 3 million euros, including an operation of almost 1 million euros in one start up Paris in the field of health. This is an example of an established trend within this association: investors are looking for start up which will have an impact on society. Élisabeth Lécuyer, president of Paris Business Angels, takes stock of these two years of health crisis.
Actu-Juridique: How are the members of the Paris Business Angels doing with the current economic climate?
Elisabeth Lecuyer : Our members have invested much more than last year. We have recorded more than € 3 million in investment in 2021. Doubled compared to 2020. They are quite confident and positive for the future, after a period of uncertainty. With the health crisis, from March 2020, all Paris Business Angels processes have been changed to digital version. Before, all the sessions took place in physical. During the crisis, we worked on video conferencing, and now we are continuing the momentum.
We have experienced a period of adjustment and appreciation of this crisis on the part of investors. Faced with the health crisis, the government has introduced assistance to support the flow of money start up such as the government-guaranteed loan (PGE). This type of device allowed start up to have a relay, vision and to persevere. In 2021, our investors believed in the recovery. They are confident, believe in the technologies that have and will emerge and in the ability to start up to rotate. There is a willingness to participate and support start updespite difficult times. The economic life of one start up is made of high, low and bounce. It is also subject to macroeconomic events beyond its control. The mission of business angel is to be part of the continuity by taking advantage of its experience and expertise, especially in the crisis management part. Today we see that our members are more mobilized than before start up to support them in economic recovery.
AJ: What were the preferred investments in 2021 by the members of the Paris Business Angels?
E. L. : First, we are a generalist network. We do not have a favorite sector. But in 2020 and 2021, the healthcare sector was dominant in our members’ investments. The health crisis has brought solutions and innovations in the field of health. We especially find digital health and medtech. The sectors of greentech such as technological agriculture, foodtech or intelligent management of buildings are also attractive.
“Our network has been able to develop its investment capacity to best support start-ups”
Investors appreciate projects that provide solutions to a real, sensitive and visible problem at the moment. But we have a diversified portfolio. Companies in need of financing that call on us have a desire for growth. The amounts requested by start up is becoming increasingly important. Before, it was between 300,000 and 500,000 €. Today, they have almost doubled. Our network has been able to develop its investment capacity to best support start-ups.
AJ: How do business angel of your association direct their investments?
EL : We encounter a very sensitive underlying trend. Today, our business angels want to make sense of their investments. Through their commitment to the healthcare sector,agritechof foodtech, investors take into account societal conditions. The idea is to create a better and more responsible world. Social and environmental responsibility is a totally cross-cutting issue, and we take this into account when analyzing the cases presented to us. Some of our members have specific expertise in these topics. They will thus bring their knowledge to the members responsible for dealing with the matter. Then we have a lot start up who in their pitch point to criteria for saving water, energy or other resources and societal conditions such as diversity. Almost all start up take this CSR dimension into account and our investors are sensitive to it.
AJ: How have your members been aware of the various sectoral funds that have boosted the economic recovery?
E. L. : We are always aware that it start up have different sources of funding. During the crisis, our investors advised start up about the support schemes they could benefit from, and in particular the PGE. It has always been complicated to raise funds in a crisis context. That start up may have difficulty promoting his business or profession, especially when he is in slow motion or even standing still. It is therefore a matter of being wise by seeking funds in the right places, such as the Investment Program for the Future (PIA). These initiatives enabled them to finance themselves during this period before organizing new fundraisers to finance their growth.
AJ: What is your assessment of 2020?
E. L. : By 2020, our investments had fallen. They had reached € 1.5 million by 2020, while our members in 2019 had invested € 1.8 million. This year, with more than € 3 million, we are doing better than 2019 and 2020 and even 2018, when we were at € 2 million. Despite the health crisis, investments have therefore been made. For example, right at the beginning of the confinement, he managed to complete a collection for one start up. We have held video conferencing meetings in connection with this operation. Another example with start up The Parisian company Yelda specialized in artificial intelligence dedicated to voice processing. It raised € 400,000 from our members in the midst of a health crisis. During 2020 is ours business angel has also greatly supported entrepreneurs: moral support, help to make decisions, support also to benefit from state aid in the face of the health crisis. Moreover, we had no start-ups going bankrupt during that period.
AJ: How does the Paris Business Angels system work from identifying start-ups to presenting them to your members?
EL : That purchase from start up performed by the permanent team of Paris Business Angels. She is accompanied by some of our members, who are part of our selection committee. The contractors of start up selected come pitch in front of our entire network. The members then decide to investigate the matter start up or they reject. The realization of the investment takes between two and three months pitch of start up.
AJ: What criteria do your members use to make an investment?
E. L. : We invest very early in the development phase of one start upbetween six and thirty-six months. At Paris Business Angels, we have three investment criteria. First the team start up which must show real ambition and complementarity. This is our No. 1 criterion and its weight is dominant in the decision. Then there is the market, which must be large and growing. Finally, we must sense a degree of technological or service innovation. But it is necessary to respond in a differentiating way to what is being done today, with a proposal for real added value.
AJ: How do start-ups use the funds that your members invest?
E. L. : Today there is strong competition between start up. It is therefore necessary to develop quickly and optimize all channels to achieve this goal. Around start up committed to a technology with R&D, financing of the technology is necessary. The value proposition must be effective as soon as possible. Then the funds are also used to recruit key competencies. Then start up must finance communication and marketing in order to make itself known to partners, suppliers and customers. The ambition is to anticipate the national market and also to see bigger through the European or even global market depending on the situation.
“Today there is strong competition between start-ups”
In summary, when one start up presents us with its need for funding, it is often technological development, recruitment and communication because these are the main levers for rapid growth.
AJ: How do you work with other investment players to best support start up ?
E. L. : We have recently set up an association called the Paris Region Angels, which brings together all the major networks in Ile-de-France. It was launched in early November 2021 at BpiFrance. The founding members with us are Val’Angels, Health Angels, Business Angels from Grandes Ecoles, Arts et Métiers Business Angels and Women Business Angels. Other networks will soon join us. The goal is to increase co-investment capacity and work better together. And we are developing a very constructive partnership with the Île-de-France region.