The Paris Business Angels association now has 180 individual investors from the Ile-de-France region. It is one of the most important networks in Île-de-France. It is part of the France Angels federation. Within this association, the principle is as follows: each member invests the amount he wishes in the Start that he wants. Currently, members of Paris Business Angels have a portfolio of 150 Start, mainly present in Île-de-France. In 2021, they made more than € 3 million of investment, including an operation of nearly € 1 million in a Start Parisian in the field of health. This is an example of an established trend within this association: investors are looking for Start that 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 a lot more than last year. We count more than 3 M € of investment in 2021. Double 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 modified, in digital version. Before, all the sessions took place in physics. During the crisis we worked by videoconference and now we are continuing the momentum.
We have experienced a period of adaptation and appreciation of this crisis by investors. Faced with the health crisis, the government has put in place aid to support the cash flow of Start like the government guaranteed loan (PGE). This type of device allowed Start to have a relay, visibility and endure. In 2021, our investors believed in the rebound. They are confident, believe in the technologies that have and will emerge and in the ability of Start pivot. There is a willingness to participate and support Start, despite the difficult times. The economic life of a Start is made of up, down and bounce. It is also subject to macroeconomic events beyond its control. The mission of business angel is to be part of continuity, by making the most of its experience and expertise, particularly in the crisis management part. Today, we see that our members are more mobilized than before with Start to support them in the economic recovery.
AJ: What were the preferred investments in 2021 by the members of Paris Business Angels?
E. L. : First of all, we are a generalist network. We don’t have a favorite sector. But in 2020 and 2021, the healthcare sector has been dominant in our members’ investments. The health crisis has led to the emergence of solutions and innovations in the field of health. We find in particular digital health and medical technology. The sectors of Green technology like technological agriculture, food Technology or even intelligent building management are also attractive.
“Our network to develop its investment capacity to best support start-ups”
Investors value projects that provide solutions to a real, sensitive and visible problem today. But we have a diverse portfolio. The companies in need of financing, which call on us, have a desire for growth. The amounts requested by Start are increasingly important. Before it was between 300,000 and 500,000 €. Today, they have almost doubled. Our network to develop its investment capacity to best support start-ups.
AJ: Comment on them business angels of your association direct their investments?
EL : We are encountering a very noticeable underlying trend. Today, our business angels want to give meaning to their investments. Through their involvement in the health,agrotech, of the food Technology, investors take societal issues into account. The idea is to make a better and more responsible world. Social and environmental responsibility is a completely transversal subject and we take this into account when analyzing the files presented to us. Some of our members have specific skills on these subjects. They will thus bring their knowledge to the members in charge of examining the case. Then we have a lot of Start who in their ground identify criteria for saving water, energy or other resources and societal issues such as diversity. Almost all Start take this CSR dimension into account and our investors are sensitive to it.
AJ: How did your members pay attention to the different sector funds that fueled the economic recovery?
E. L. : We are always attentive to the fact that Start have different sources of funding. During the crisis, our investors advised Start From which they could benefit and in particular the EMP. Raising funds in a context of crisis has always been complicated. The Start may have difficulty especially promoting his business or profession when it is idling or even at a standstill. It is therefore a question of being smart by seeking funding from the right places, such as the future investment program (PIA). These measures enabled them to finance their growth during this period, before organizing new fundraising to finance their growth.
AJ: What is your assessment of the year 2020?
E. L. : In 2020, our investments had decreased. They had reached 1.5 M € in 2020 while in 2019, our members had invested 1.8 M €. This year, with more than 3 M €, we are doing better than 2019 and 2020 and even 2018 since we were at 2 M €. Despite the health crisis, there have therefore been investments. For example, just at the very start of containment, we managed to finalize a fundraiser for a Start. We have held videoconference meetings in relation to this operation. Another example with the Start Parisian Yelda specializing in artificial intelligence for voice processing. She raised € 400,000 from our members in the midst of a health crisis. Pendant 2020, nos business angels have also provided extensive support to entrepreneurs: moral support, help in making decisions, support also in order to benefit from government aid in the face of the health crisis. Moreover, we have not had any start-ups that went bankrupt during that period.
AJ: How does the Paris Business Angels system work from the identification of start-ups to the presentation of your members?
EL : The supply from Start is carried out by the permanent team of Paris Business Angels. She is accompanied by some of our members who are part of our committee. Entrepreneurs of Start selected come launcher in front of our entire network. Then, the members decide to investigate the file of the Start or they decline. The investment takes between two months and three months since the ground of the Start.
AJ: What are the criteria on which your members commit to make an investment?
E. L. : We invest very early on in the development phase of a Start, between six and thirty-six months. At Paris Business Angels, we have three investment criteria. First, the team Start which must show real ambition and complementarity. This is our N ° 1 criterion and its weight is dominant in the decision. Then there is the market, which must be large and growing. Finally, we must feel a degree of technological innovation or service. But, we must respond in a renchant way to what is being done today, with a real added value proposition.
AJ: How do start-ups use the funds invested by your members?
E. L. : Today, there is a strong competition between Start. It is therefore necessary to develop quickly and optimize all the channels to accomplish this objective. About the Start committed to a technology together with R&D, funding for the technology is necessary. The value proposition put forward must be effective as quickly as possible. Then, the funding is also used to recruit key skills. Then the Start must finance communication and marketing to make themselves known to partners, suppliers and customers. The ambition is to preempt the national market and also to see bigger things going through the European or even global market depending on the situation.
“Today, there is strong competition between start-ups”
In summary, when a Start We present its financing needs; it is often technological development, recruitment and the communication vehicle which are the main levers for rapid growth.
AJ: How do you work with other investment players to best support Start ?
E. L. : We recently created an association called Paris Region Angels which brings together all the major networks in Île-de-France. It was launched at the beginning of November 2021 at BpiFrance. The founding members with us are Val’Angels, Angels Santé, Business Angels des grandes écoles, Arts et Métiers Business Angels and Femmes Business Angels. Other networks will soon join us. The objective is to increase the capacity for co-investment and to work better together. And we are developing a very constructive partnership with the Île-de-France region.