They play a key role in supporting the start-up of young businesses. Who are these entrepreneurial “angels” who finance start-ups and whose added value lies in the support and advice provided? Meeting with three investors from the Vendée who have decided to put their experience at the service of innovative ideas.
“Seed financing does not exist in France”, protests Alain Foltzer, vice president ofAbaba, a network of business angels (BA) born in Nantes 11 years ago. Since then, the association has extended to the Vendée, with the creation in 2017 of a territorial delegation, of which this multi-entrepreneur in the private shelter sector took the lead.
“The truth, he continues, is that bankers don’t know how to finance companies that don’t have a budget. The only alternative for development is either love money (financing from relatives), or business angels, private investors who accept to risk by essentially betting on the trust in them inspired by the project leader and the idea he defends! “However, Alain Foltzer insists,“ the role of a BA is not just financial.
THE TRUTH IS BANKERS DON’T KNOW HOW TO FINANCE BUSINESSES WITHOUT BUDGETS.
It is above all in supporting entrepreneurs. “And to add:” if we are to paint a composite picture, it is often retired male entrepreneurs who have sold their businesses and have a small amount of capital in front of them. That said, the typical profile is starting to expand. Women, the youngest profiles begin to join us! This allows you to tease traditional views by challenging certain established models. You should also know that it is a risky choice, the goal is not really to make a profit. Start-ups are based on fragile models, so there are as many successes as there are failures in the investments made. Unicorns, these super start-ups worth over a billion dollars remain extremely rare. More often than not, a business angel is content to find his initial bet. “
CONFIDENCE And TRANSPARENCY
In terms of quality, a business angel must have an analytical mind and be attentive to their environment. “We cannot practice the language of wood, warns Sylviane Raynaud, Abab’s business angel. It is necessary to dig a file before validating it, to understand the motives of the project leader. The relationship that is established from the first contact must be based on transparency of information. This is the condition for creating trust and moving forward together ”. She specifies: “I work on affection, I choose my folders based on the personality of the manager, even if I am more sensitive to eco-responsible initiatives, linked for example to environmental protection. Coming from a traditional economic context, it can sometimes be disturbing to be faced with intangible projects with great uncertainty. It is the entrepreneur’s ability to inspire confidence that he will decide whether to invest or not. Of the eight files in Abab’s portfolio, there is only one I haven’t bet on. That said, I find it fabulous to be open to change and to participate in the emergence of new models. I enjoyed living all these entrepreneurial adventures. This is where my main pleasure lies ”. The young retiree ran a business for 16 years before selling it to a group in 2018. “We were tailor-made manufacturers for the pharmaceutical industry,” says Sylviane Raynaud. In retrospect, I had a dense active life, never joining any club other than my professional union. I felt that I was already taking enough time from my family not to go running the networks in the evenings and on weekends. A choice that nevertheless leads to a presumed form of loneliness from which he is extricating himself today with this new activity. “For the first time, I have the feeling of belonging to a peer group and I really like that!”
Being a woman in a male environment is not an obstacle in her opinion. “Of the 21 members of Abab Vendée, we are only two women. This can be explained quite easily. First, to be a BA, you need to have funds personally. It is clear that female entrepreneurs are still in the minority even if the younger generations are more ready to take the plunge! Secondly, it is necessary to have a matrimonial regime that allows total freedom. I think this is an argument that works more women than men. There is a more marked form of prudence in us, the responsibility of not spending family money. When I invest, I commit my money, taking care to protect my family from risks ”. According to Catherine Abonnenc, vice president of Femmes business angels, of the 5,000-6,000 people who invest in France, no more than 9-10% are women.
KEY DATA From ABAB SALE
Date from creation : end of 2017.
First Pencil case : early 2018.
Founding principle: each business angel positions itself individually by investing the amount they want in the start-up they want.
Number folders polite : eight files have been and still are supported by Abab Vendée. This year a loan was issued following the acquisition of 100% of the shares of a start-up supported by the network.
Ticket medium investment from BA : € 10,000
Transaction amount: The Vendée association has 21 individual members who have invested a total of almost 2 million euros since its creation. Over a dozen additional loans were made to support the growth of the start-ups in the portfolio.
THE WANT HAVING HASTEN
For Frédéric Mandin, a former entrepreneur in the agri-food sector, the motivation is yet another. “My national and then international professional experience made me lose the direct link with the richness of the industrial fabric of the Vendée, which I greatly appreciated. I promised myself, on the day of the sale, to share my experience with people in the area. Today I am a business angel performing salaried functions in the company that I was a partner in and which was bought by a world leader. If I had to take stock of this experience, I am torn between the desire to help and the frustration of not being able to dedicate more time to it. Being a business angel remains an energy-intensive business. My main goal is to convey desire, will, knowledge and ambition to those who need it. I am convinced that there is a rather powerful mental part in professional success. At school you are provided with tools and means to succeed, but you are not told how difficult it can be at times. My role, beyond the financial aspect and the prospect of immediate earnings, is precisely to instill in all these new entrepreneurs more combativeness and desire to have will ”he concludes.
MY MAIN GOAL IS TO TRANSMIT DESIRE, WILL, KNOWLEDGE AND AMBITION TO THOSE IN NEED.
Since its creation, Abab Vendée has processed two to three rows despite a “trough” linked to the Covid period. “These are essentially start-ups in the start-up phase, the most advanced structures do not concern us”, says Alain Foltzer. Procurement takes place in close collaboration with the Vendée Chamber of Commerce and Industry. A CCI delegate ensures the administrative follow-up of the practices while two instructors designated among the members of the association are responsible for the personal accompaniment of the project leaders. “There is relatively little direct sourcing, Alain Foltzer regrets, but we are working on our notoriety until it becomes a reflection of every entrepreneur in the area looking to come up with new ideas! In this regard, we will organize an information meeting in the Vendée by the end of the year ”.
WHICH STEPS FOR THE EDUCATION OF A PENCIL CASE ABAB?
The pre-selection of the files takes place in close collaboration with the CCI Vendée and Abab. Once a potential has been identified, the project leader is invited to report to a selection committee. These are all business angel members who decide, together, to continue education or not. Two BA instructors are then appointed to study the dossier thoroughly with the contractor. At the end, the instructors write a report expressing their opinion on the presentation of the dossier to the next decisive step: the investment committee. If there is a favorable opinion, this is where each business angel individually positions themselves as a future shareholder of the company at the level they want. The project manager is then regularly monitored by his instructors who accompany him throughout his entrepreneurial adventure.