The French Tech Initiative, a year later

Alain-Patrick Umucyo By Alain-Patrick Umucyo, 18th Oct 2015 | Follow this author | RSS Feed | Short URL http://nut.bz/3-tr3ncj/
Posted in Wikinut>Business>Analysis

“The State willing to sustain in France the flourishing of successful start-ups to generate economic value and jobs, it creates the French Tech Initiative as an all-encompassing movement of collective mobilisation.”(1) Thus is introduced the call for interest intended to concretise the second objective of the French Tech Initiative.

1. The characteristics of the “FrenchTech”


1.1 The peculiarity of the definitions

The term “FrenchTech” is now “the collective name to relate to all the actors of the French 'start-ups ecosystem'.”(2) The December 2014 call for interest explains that these actors are “entrepreneurs first and foremost, but also investors, incubators, accelerators, media, public operators, research institutes … which are involved for the growth and the international exposure of French start-ups.”(3)

As to the “start-ups”, the call adds that they are “young enterprise aiming at a 'scalable' business model (with prospect of strong and rapid growth) or enterprise which start-up and execute a business model based on a strong growth.”(4) This definition is all about the business model and does not take into account the age of the enterprise. The original English definition, however, describes the “start-up” as “a newly established business”(5).

The choice of the French Government was therefore to create an easily accessible space, which can be occupied by century-old enterprises having changed their business model in favour of one “with prospect of strong and rapid growth”. The emphasis placed by the French definition on this kind of business model is suggestive of Endeavor's target.

1.2 The Endeavor model

The American company Endeavor was founded in 1997.(6) Its founders envisaged it as “a new kind of non-profit organization”.(7) Indeed, it “is a mix of an international organisation and a private firm. It aims at sustaining so called high-impact entrepreneurs all over the world, especially in emerging markets.”(8) It is notably the only entity of this size to give an example of a successful sustaining and promotion of entrepreneurship at an international level.

After 18 years, Endeavor has been studied by Harvard and Stanfard Universities.(9) The company hired a former president of the World Bank in 2006 and, two years later, one of its co-founders became co-chairman of the “World Economic Forum – Middle East” before being a participant in 2010 of “US Presidential Summit on Entrepreneurship.”(10)

As soon as 1999, Endeavor managed to attract international investors to support selected entrepreneurs.(11) One of the co-founders has created “a venture capital firm targeting early stage investments in the U.S. and Europe”, among others.(12)

This characteristic consisting in involving private investors at the beginning is part of the French Tech Initiative. One of the “3 main objectives” of that Initiative is “a 200-million-euro investment fund (which) co-finances private accelerators for start-ups.”(13) This goal is in coherence with the reality of entrepreneurship, as evidenced by the evolution of the creation of Companies with simplified shares (French : SAS).

2. The French Tech vehicle : the SAS


2.1 The advantages of the SAS

The SAS is a “company with stakeholders whose responsibility is limited to their personal investment and who have the possibility to take on prerogatives independent from the amount of their stakes.”(14) This possibility distinguishes the SAS from the Company with limited responsibility (French : SARL) in which the powers of the shareholders “are proportional to the amount of their stakes.”(15) Also, “the SAS is a company with shares, which near it to the public company .”(16) However, they remain different because, among other particularities, the SAS “can be a one-person company, it is then called company with simplified shares with one shareholder .”(17)

The possibility to separate powers and amount of shares places the SAS in an enviable situation for entrepreneurs who intend to solicit private external funding. Indeed, this possibility can allow the entrepreneur detaining a short amount of shares to remain actually the Chief executive of the company. Concurrently, private investors, whose financing can lead to them detaining a large amount of shares, remain free to minimise their social obligations. They lend capital without having to constantly decide on operational matters. This gives them leeway for investing elsewhere.

2.2 The 2014 turning point

In 2014; “the companies with simplified shares continue to gain ground against the other forms of companies : 39% of founders prefer this legal category (after 29% in 2013 and 19% in 2012).”(18) Even more remarkable : in 2014, for the first time, there are more one-person SAS created than other SAS.(19) The new entrepreneurs advised on the methodology of financing their projects have understood that the SAS is the best vehicle to move forward one series of investment at a time.

3. The French Tech instability

In 2015, the French Tech is directed towards the international stage. The goal is to attract “in France entrepreneurs, talented people and investors coming from around the world.”(20) This opening to new actors will accelerate the renewing of the French Tech protagonists, already perceptible especially in the financial and insurance sector.

The acceleration will be detrimental to the French Tech environment whose visibility is still hazy. Indeed, the available tools to sustain entrepreneurship are so numerous that duplicates are hardly avoided when navigation is possible.

Sources

(1)LA FRENCH TECH. Appel à manifestation d’intérêts pour les investissements dans des structures d’accélération de la croissance de startups innovantes (« accélérateurs de startups») (online). Gouvernement.fr <http://www.gouvernement.fr/sites/default/files/contenu/piece-jointe/2015/01/ami_french_tech_acceleration_0.pdf> accessed 01 February 2015

(2)LA FRENCH TECH. Twitter profile @LaFrenchTech (online). Twitter. <https://twitter.com/LaFrenchTech> consulté accessed 01 February 2015

(3)LA FRENCH TECH. Appel à manifestation d’intérêts pour les investissements dans des structures d’accélération de la croissance de startups innovantes (« accélérateurs de startups») (online). Gouvernement.fr <http://www.gouvernement.fr/sites/default/files/contenu/piece-jointe/2015/01/ami_french_tech_acceleration_0.pdf> accessed 01 February 2015

(4)LA FRENCH TECH. Appel à manifestation d’intérêts pour les investissements dans des structures d’accélération de la croissance de startups innovantes (« accélérateurs de startups») (online). Gouvernement.fr <http://www.gouvernement.fr/sites/default/files/contenu/piece-jointe/2015/01/ami_french_tech_acceleration_0.pdf> accessed 01 February 2015

(5)OXFORD DICTIONARIES. Start-up (online). Oxford Dictionaries. <http://www.oxforddictionaries.com/definition/english/start-up?q=startup> accessed 06 February 2015

(6)ENDEAVOR. Our background - Overview (online). Endeavor. <http://www.endeavor.org/model/ourbackground> accessed 01 February 2015

(7)ENDEAVOR. Our background - Overview (online). Endeavor. <http://www.endeavor.org/model/ourbackground> accessed 01 February 2015

(8)UMUCYO Alain-Patrick. 2/2. The new era of lobbying. Part. 3 : XXIst century lobbying, the new power (online). 22 November 2014. Wikinut. <http://www.wikinut.com/in/xgdhii/www.wikinut.com/2-2.-the-new-era-of-lobbying.-part.-3-%3a-xxist-century-lobbying%2c-the-new-power/3vbzk5hj/hhdflewp/> accessed 06 February 2015

(9)ENDEAVOR. Our background - Timeline (online). Endeavor. <http://www.endeavor.org/model/ourbackground> accessed 06 February 2015

(10)ENDEAVOR. Our background - Timeline (online). Endeavor. <http://www.endeavor.org/model/ourbackground> accessed 06 February 2015

(11)ENDEAVOR. Our background - Timeline (online). Endeavor. <http://www.endeavor.org/model/ourbackground> accessed 06 February 2015

(12)ENDEAVOR. Peter B. Kellner (online). Endeavor. <http://www.endeavor.org/network/endeavorglobal/boardofdirectors/peter-kellner/683> accessed 06 February 2015

(13)LA FRENCH TECH. Appel à manifestation d’intérêts pour les investissements dans des structures d’accélération de la croissance de startups innovantes (« accélérateurs de startups») (online). Gouvernement.fr <http://www.gouvernement.fr/sites/default/files/contenu/piece-jointe/2015/01/ami_french_tech_acceleration_0.pdf> accessed 01 February 2015

(14)INSEE. Hausse des créations d’entreprises en 2014, notamment des sociétés (online). Insee Première N° 1534 - January 2015. Insee. <http://www.insee.fr/fr/themes/document.asp?reg_id=0&ref_id=ip1534&page=sdb#def5> accessed 03 February 2015

(15)INSEE. Hausse des créations d’entreprises en 2014, notamment des sociétés (online). Insee Première N° 1534 - January 2015. Insee. <http://www.insee.fr/fr/themes/document.asp?reg_id=0&ref_id=ip1534&page=sdb#def6> accessed 03 February 2015

(16)INSEE. Hausse des créations d’entreprises en 2014, notamment des sociétés (online). Insee Première N° 1534 - January 2015. Insee. <http://www.insee.fr/fr/themes/document.asp?reg_id=0&ref_id=ip1534&page=sdb#def5> accessed 03 February 2015

(17)INSEE. Hausse des créations d’entreprises en 2014, notamment des sociétés (online). Insee Première N° 1534 - January 2015. Insee. <http://www.insee.fr/fr/themes/document.asp?reg_id=0&ref_id=ip1534&page=sdb#def5> accessed 03 February 2015

(18)INSEE. Hausse des créations d’entreprises en 2014, notamment des sociétés (online). Insee Première N° 1534 - January 2015. Insee. <http://www.insee.fr/fr/themes/document.asp?reg_id=0&ref_id=ip1534#inter2> accessed 04 February 2015

(19)INSEE. Hausse des créations d’entreprises en 2014, notamment des sociétés (online). Insee Première N° 1534 - January 2015. Insee. <http://www.insee.fr/fr/themes/document.asp?reg_id=0&ref_id=ip1534#inter2> accessed 04 February 2015

(20)LA FRENCH TECH. Internationalisation de la French Tech (online). La French Tech. <http://www.lafrenchtech.com/content/internationalisation-de-la-french-tech> accessed 04 February 2015

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