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France investing in its start-ups, launches new visa

The Economist recently had an interesting piece on multiple initiatives (by government and private venture capital investment alike) to encourage a blossoming of start-ups that Paris has not seen in years.

How this impacts you as potential or current expats: “Axelle Lemaire, the (Canadian-born) minister visiting NUMA, has launched a “tech visa” for foreign entrepreneurs.”

To learn more about this visa and the overall project to support French tech start-ups, you can peruse La French Tech.

Also of note: France is embarking on a “Come Back Home” campaign abroad to try to convince accomplished French expats to return to their homeland to help take the start-up economy to the next level.

I’ve included the Economist text below. Have any of my readers attended recent events in France (both Paris and other cities) related to start-up and tech investment?

Reinventing Paris
Start-up city

A capital seen as a museum develops new pockets of high-tech modernity
Jun 13th 2015 | PARIS | From the print edition

THE café is organic, the décor industrial loft-style and the furniture artfully mismatched. This is NUMA, a digital hub in Paris, where facial hair is abundant and ties are non-existent. Perhaps it is insouciance, ignorance or quiet concentration, but when a government minister turns up, nobody notices. A new generation is trying to reinvent how Paris behaves and looks.

It may not be Berlin or London, but something is taking place in the capital’s fringes and deserted industrial spaces. A city with more beauty and heritage than most, Paris is trying to shrug off its staid image. Scarcely a week goes by without an event devoted to start-ups in a converted dock or warehouse in an unfashionable area. On Paris’s eastern edge, Xavier Niel, an entrepreneur who heads a €12 billion ($13.5 billion) communications group, is building a start-up incubator with floor space equivalent to four football pitches. In the first quarter of 2015 a Paris venture-capital firm was joint-top investor in European technology start-ups, with two German companies, according to CB Insights, an American research group.

“There has been a transformation of mentalities in France,” says Mr Niel, who urges young people to take risks, think big and break conventions. “Entrepreneurship is a state of mind” reads a banner at NUMA, also home to Google’s Paris campus. The outlook is anti-hierarchical and anti-conformist. “Our force is cultural chaos,” says Frédéric Oru, a co-director. Another NUMA executive adds: “It’s not very French.”

One reason for change is that the young are no longer drawn to corporate life. Unemployment among graduates is 10%, and one in five of those who create new businesses are jobless. But some just want to do their own thing, away from the strict hierarchies of corporate France. A quarter of recent graduates of HEC, the top business school, have started their own company, up from one in ten a decade ago.

Second, successful entrepreneurs and investors now show what is possible. Mr Niel, who also built a software-development school in Paris, is one. Sigfox, a start-up that runs a cellular network for connected objects, pulled off the third-biggest European tech deal in the first quarter of 2015 when it raised $115m. BlaBlaCar, Europe’s biggest car-sharing service, raised over €100m last year. Incubators with names like TheFamily have grown. Facebook is opening a research centre on artificial intelligence in Paris.

Third, the Socialist government, which once whacked entrepreneurs with taxes, has changed. Instead of lamenting the loss of fine brains, it hopes to lure in foreign ones. Axelle Lemaire, the (Canadian-born) minister visiting NUMA, has launched a “tech visa” for foreign entrepreneurs. A public-investment fund, BPI France, is promoting start-ups. Early efforts to back incubators met “indifference and scepticism”, recalls Jean-Louis Missika, a deputy to the Socialist mayor, because “that wasn’t the image of Paris.” City Hall now wants to show that Paris is not just a living museum.

It is odd that the city lost its reputation for innovation. From avant-garde art to industrial engineering, it used to push the boundaries. The 1878 Paris World’s Fair showcased electric light; in 1889, the Eiffel Tower became the world’s tallest man-made structure. More recently, the urge to preserve has stifled innovation. Yet Paris is learning to reconcile history and modernity. On the edge of the Bois de Boulogne, a park, an elegant glass-and-steel structure designed by Frank Gehry for the Louis Vuitton art collection has met with admiration. Slowly, almost despite itself, Paris is rediscovering an innovative spirit.

French venture capital at record levels

According to the the March 22 edition of French financial daily La Tribune, venture capital in France in 2010 reached its highest levels since 2000. For those of you who cannot read the article (due to subscription restrictions), I have summed it up in English below.

An interesting linguistic note that reveals a lot about cultural differences is the expression in French for “venture capital”: capital-risque, or “risk capital”. So whereas the risk-taking “Anglo-Saxon” cultures positively think of investing in businesses as “ventures”, the actual French term emphasizes the traditional risk-averse culture of France (that is gradually evolving, as the article illustrates).

Another example of this difference is that more Americans and British invest in stocks for their pensions whereas it is less of a natural option for French workers. But this too is changing.

I have some venture capital links on my business in France page.

Do you have any views of venture capital and investments in France?

“Le capital-risque en France retrouve des niveaux record”

Venture capital funds invested about €1.05 billion in 2010 (compared to €910 million in 2009). This is the highest amount since 2000, when VC reached €1.14 billion.

Investment over the past six semesters (notice the dip 2nd half of 2009)

2008: €470 mil (1st semester), €556 mil (2nd semester)
2009: €503 mil (1st semester), €407 mil (2nd semester)
2010: €515 mil (1st semester), €532 mil (2nd semester)

Most capital came from local investment funds, or FIP (Fonds d’investissement de proximité) and innovation mutual funds, or FCPI (Fonds commun de placement dans l’innovation). In fact, the second half of 2010, FIP’s and FCPI’s represented 62.5% of investments.

N.B. you can learn more about these and other French investment terminology here. See below for explanation of FCPI from that link.

Another trend is that most venture capital firms invest in the last stage, or second rounds, instead of early stage investments. Early stage made up only 7% of VC investments in the last ten months of 2010.

One last note is that the health, life sciences and pharmaceutical industries make up almost 25% of venture capital investments.

FCPI: French type of mutual funds, created in 1997, intended to support the development of innovating firms.

The capital collected by a FCPI is invested at least up to 60 % in the capital of non listed companies, or of limited liability companies, to which the Agence nationale de la valorisation de la recherche (ANVAR) gives the label “innovating”.

Subject to keep the FCPI shares during at least five years, the subscriber profits from tax advantages at the time of the subscription (tax cut) and at the time of the resale (possible exemption of the cashed products and the appreciations in certain cases)

60 ideas to streamline SME operations in France

February 17th, 2011 No comments

The CGPME (Confédération Générale des Petites et Moyennes Entreprises) is a business interest group in France representing entrepreneurs and directors of start-ups and SME (small and medium enterprises). They have proposed 60 ideas to simplify business operations for SME’s in France. They cover administrative, hiring, accounting, financing, etc. You can download the PDF (in French) on their site, under the PDF logo “en savoir plus”. The opening remarks below state that for the French economy, simplifying administrative procedures for SME’s is an important factor and that by rendering regulatory and business law texts more easily accessible and user-friendly, this would help French SME’s to become more productive and competitive not only at home but also abroad.

Jeudi 17 février 2011
Simplifications administratives
60 propositions de la CGPME
Propos liminaires

Les dispositifs de simplification administrative représentent des enjeux majeurs pour notre économie.

En permettant une meilleure lisibilité et compréhension des réglementations, en améliorant la transparence de l’administration, ils simplifient le contexte dans lequel les entreprises exercent leur activité : une réglementation administrative mal conçue et obsolète peut décourager la création d’entreprise, entraver l’innovation et dresser des obstacles rendant les entreprises moins compétitives au plan international.

A lesson for entrepreneurs in France

December 16th, 2010 3 comments

As President George W. Bush is rumored to have famously (and shamefully) stated, “the problem with the French is that they don’t have a word for entrepreneur.” (Of course, that is a French word).

For those who think that entrepreneurs cannot succeed in France, think again. As Marc Simoncini, founder of Meetic (a dating website) proves, it takes smarts, determination and vision, but the landscape in France is evolving and although the country is not as capitalistic and entrepreneur-driven as the US, it is improving.

The Economist profiles this remarkable entrepreneur’s rise, fall and rise again, with pertinent commentary on entrepreneurship in France. Excerpts are below.

Do you have stories of success and/or failure in starting a business in France?

Lucky in love
A serial entrepreneur shows France how to love, and how to fail
Face value: Marc Simoncini Dec 9th 2010 | PARIS | from PRINT EDITION

WILD and passionate lovers are much admired by the French establishment. Wild and passionate entrepreneurs, not so much. Marc Simoncini, the founder of Meetic, Europe’s biggest dating website, is therefore something of an outsider. His career has seen more ups and downs than the romances he helps to spark. “I have been poor, very rich, ruined and now very rich again, at least on paper,” he says…

…Apart from Meetic, he has invested several million euros in Winamax, a poker website. (His partner in the deal is Patrick Bruel, a singer and professional poker player.) Last year he set up Jaina Capital, a fund through which he plans to invest €100m in five or six French start-ups over the next two years. He already acts as an angel investor for several young online companies. And he recently launched a television show in which he introduces an entrepreneur in a few minutes every day.

After his spectacular rebound Mr Simoncini feels drawn to philanthropy. Next autumn he will launch a private internet school in Paris. His aim is to create an ecosystem for aspiring online entrepreneurs, teaching them the tricks of the trade and perhaps helping them raise capital.

Mr Simoncini frets that entrepreneurial success is frowned upon in France. But he concedes that it has become easier to create a business. There are fewer bureaucratic hurdles than before, and the bursting of the internet bubble has reduced the stigma of failure by making it commonplace. Recent reforms have re-energised France’s entrepreneurial culture, says Frédéric Iselin of HEC, a French business school, who has also been an internet entrepreneur. Yet Timothy Bovard of INSEAD, a business school near Paris, insists that anti-capitalist thinking is still pervasive. Mr Simoncini has not forgotten the lessons of his yo-yo career. “If tomorrow the French state votes a law that prohibits internet dating, I will be poor again,” he shrugs.

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