French business angels in the absence of oxygen, Funding

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 increase. 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 collects 5,500. .

“We want more business angels in France and considering the needs we need 10,000”, assures Guy Gourevitch, president of France Angels. The representative of these private investors simultaneously emphasizes a phenomenon which rather seems to be moving in the right direction. “70% of investments are made by several people in a network. It’s a movement that increases the stakes in start-ups thanks to a ripple effect with 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 question

“If we put aside the activity of ‘superbusiness angels’, the share of these individual investors in French Tech remains 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 frame of 22 billion dollars. » 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 towards the real economy and no longer towards real estate or banking products.”, says Guy Gourevitch. Other technical points are advanced, such as the reduction of the net loss of the taxable income base or the possibility of reinvesting the capital gain on disposal, resulting in a tax deferral.

For this, the political terrain seems undermined by the wealth tax refund debate, and its defenders have few illusions in the short term. “It is a shame that IFI cannot be invested in start-up companies, especially at a time when they will suffer very much in the start-up phase.”adds Franck Sebag.

Development of the approach

During the period of the coronavirus crisis, the number of new cases supported by business angels seems to have already dried up, notes Charles Degand, CEO of AngelSquare: “In the period from April to June, we recorded a 30% drop in activity, but no operation was cancelled. However, the criteria have evolved and our business angels focus more on rational aspects such as profitability or level of expenses. »

Last lesson of the barometer of France Angels, maintenance of the entrepreneurial structure in the region. If the majority of investors are in Paris (54.5%), two thirds of them inject funds into companies in the rest of France. This is especially the case with Arnaud Laurent, who conducts 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 the one who has especially supported nuggets like MWM, Getfluence or OnOff remains convinced that if the number of his peers does not increase, the pool and the desire remain very strong: “Former BA entrepreneurs are attracted by the adrenaline that comes with the start of the adventure. They are motivated by this stage where everything must be built and which, if not crossed, is dead. »

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