Love money, BA, mutual funds… How to find the money?, Financing

To get started, a business needs fuel. And this fuel, it is the money that it is necessary to seek. The first vigilance will be to do not carry the entire financial risk on your shoulders. The entrepreneur already spends a lot of energy and time on his project and sometimes puts part of his personal life on hold. “In addition, if he bets everything on his own, he will bear special stress, which will have a blocking effect on his decisions for fear of losing everything”, assesses Alexandre Mars.

At the beginning, if possible, you can appeal to the family (it is called “love money”) and then expand the circle of lenders or investors to your friends and then to your friends’ friends. Such Bertrand and Mathilde Thomas launched their Caudalie cosmetics business in 1995.

Very young and inexperienced at that time, they did not even try banking as their chance of convincing was zero. To take their first step, they turned to their relatives, who borrowed 100,000 francs, then a few months later 200,000 francs. In 5 years they borrowed 2 million francs (300,000 euros) primarily to create their first spa in Bordeaux. Everything will be refunded in 2002, as Alexandre Mars tells us in his book “Ose! »*.

+ VIDEO / Excerpt from Alexandre Mars’ masterclass on Go Entrepreneurs Paris (April 2022)

In addition to grants, investors

Local and regional support, Bpifrance… In France, the possibilities for grants are also legion. But at some point, especially in BtoC activities, the business creator will have to call on a financing professional, whether he is a banker, business angel or investment fund. An artisan baker will obviously not be dealing with the same interlocutor as the founder of a self-service scooter rental service. For innovative young shoots, if income can sometimes be there quickly, profitability will generally not be achieved for five years. It is therefore not the traditional banker who will be most likely to provide them with funding, but rather a business angel or a venture capital pro who invests in the start-up phase for small amounts.

But regardless of their specialization in sectors, these investors will only trust you on the basis of serious guarantees. Several basic principles must be respected to have a chance to seduce them. All take into account several criteria, starting with the famous business plan that reflects the strategy implemented over several years. Customer targets, distribution channels, customer acquisition costs, available equity, future financial needs, revenue forecast, etc. will be investigated. The profile of the entrepreneur(s) will be examined.

In general, investors are wary of “solo” and prefer teams of two or three partners if skills are complementary. And if these founders have also had other entrepreneurial experiences in the past, that is a serious asset. A new fact is that more and more funding structures, such as Alexandre Mars’ Blisce fund, are investigating the social responsibility of the requesting company. Does she engage in one way or another for the common good? Does it consider diversity in its recruitment? Does it select its suppliers based on ethical and environmental criteria? For these committed investors, social responsibility is no longer a simple tick box, but a condition for the long-term viability of the project.

Alexandre Mars’ masterclass

Every Wednesday from July 13 to August 31, at Les Echos you can find Entrepreneurs excerpts from Alexandre Mars’ masterclass given at the Go Entrepreneurs Paris 2022 show. He gives his wise advice as a serial entrepreneur to lead his business venture on the road to success. Previous Episode: Failed. Next episode: Changing the world.

* “Dry! Everyone can become an entrepreneur”, the book by Alexandre Mars published by Flammarion / Versilio, 255 pages, 18 euros, published in January 2020.

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