Paris Business Angels: “Today our business angels give meaning to their investments”

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 is part of the France Angels association. Within this association, the principle is as follows: each member invests the amount he wants start up that he wants. 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 Pariser 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 do the members of the Paris Business Angels feel about the current economic situation?

Elisabeth Lecuyer : Our members have invested much more than last year. We have registered more than 3 million euros in investments in 2021. Doubled compared to 2020. They are quite reassuring 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 in digital version. Before, all the sessions took place in person. During the crisis, we worked by video conference, and now we continue 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 aid to support the flow of money start up such as the state-guaranteed loan (PGE). This type of device allowed start up to have a baton, vision and to persevere. In 2021, our investors believed in the recovery. They are self-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 a 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 benefiting from its experience and expertise, especially on 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 to the fore in the health field. 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 value 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 who call on us have a desire for growth. The amounts requested by start up becomes 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 manage their investments?

EL : We encounter a very sensitive underlying trend. Today, our business angels want to give meaning to their investments. Through their commitment to the health sector,agritechof foodtech, investors take social conditions into account. 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 that are presented to us. Some of our members have specific expertise in these topics. They will thus bring their knowledge to the members who are responsible for handling the case. Then we have a lot start up who in their pitch point to criteria for saving water, energy or other resources and social 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 sector funds that have fueled the economic recovery?

E. L. : We are always aware that start up have different sources of funding. During the crisis, our investors advised start up about the aid schemes from which they could benefit, and in particular 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 smart about looking for funding in the right places, such as the Future Investment Program (PIA). These measures allowed them to finance themselves during this period before organizing new fundraisers to fund their growth.

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AJ: What is your assessment of 2020?

E. L. : In 2020, our investments had fallen. They had reached €1.5 million in 2020, while in 2019 our members 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, we managed to finish a collection for one start up. We have held video conference 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, our business angel has also greatly supported entrepreneurs: moral support, help to make decisions, support also to benefit from state aid in light of the health crisis. Furthermore, we had no start-ups that went 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 of start up carried out 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 chosen ones come pitch in front of our entire network. The members then decide to investigate the matter start up or they refuse. Realization of the investment takes between two and three months from now 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 a start up, between 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 certain degree of technological or service innovation. But it is necessary to respond in a differentiating way to what is being done today, with a proposition of real added value.

AJ: How do startups use the funds your members invest?

E. L. : Today there is strong competition between start up. It is therefore necessary to rapidly develop and optimize all channels to achieve this goal. Around start up committed to a technology with R&D, funding for the technology is necessary. The proposed value proposition must be effective as soon as possible. The funds are then also used to recruit key competences. After that start up must finance communication and marketing to make itself known to business partners, suppliers and customers. The ambition is to anticipate the national market and also to look bigger through the European or even global market depending on the situation.

“Today there is strong competition between start-ups”

In summary, when a start up presents us with its need for financing, it is often technological development, recruitment and communication, because these are the most important levers for rapid growth.

AJ: How do you work with other investment players to best support start up ?

E. L. : We have recently created an association called 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 join us soon. 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.

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