The blindness of the French banks with regard to entrepreneurship.

Alain-Patrick Umucyo By Alain-Patrick Umucyo, 28th Mar 2015 | Follow this author | RSS Feed
Posted in Wikinut>Business>Analysis

The French banks are completely uninterested in sustaining entrepreneurship and the entrepreneurs of France have well understood that.

1 The scientific path

On 23 February 2015 Endeavor Insight introduced details from a scientific article aiming at “drawing lessons on entrepreneurship ecosystems from evolutionary biology and ecology.”(1) Endeavor Insight is the “research arm” of the organisation Endeavor. The latter constitutes “a successful example of sustaining and fostering entrepreneurship at an international level.”(2)

The scientific article is entitled Enabling Entrepreneurial Ecosystems. The author observes that : “Governments and non-governmental grant-making organizations that seek to advance local competitiveness have turned increasingly to entrepreneurship-focused interventions.” Among the lessons he submits, some are of interest for all those who may seek to foster entrepreneurship, particularly the banks.

2 The distant French banks

Endeavor Insight picked out “that accelerating entrepreneurship does not always mean supporting small and medium-sized” enterprises.(3) It added : “New, high-growth 'Schumpeterian' ventures initially start out as small or medium-sized companies, but do not remain that way for long. Therefore, programs supporting SMEs may actually undermine entrepreneurship if they reduce incentives for growth.”(4)

This lesson is being missed by the French banks which decided to reinforce their relationships with SMEs by launching a dedicated website. The site “is an educational initiative from the French Banking Federation (FBF)”(5) which specifies that “the 3 millions SMEs are at the heart of the French banks' strategy”.(6) However, there is no equivalent initiative dedicated to starting entrepreneurs and those mobilised for their success – such as incubators and accelerators for start-ups or private investors.

The strategy of the French banks is obviously not concerned with entrepreneurship. That confirms “the lack of interest of big French companies”(7) perceptible regarding the infrastructure of the French Tech ecosystem. The entrepreneurs of France are well aware of that.

3 The lucidity of the entrepreneurs of France.

3.1 The disillusioned individual entrepreneurs

In 2013, two French entrepreneurs talked about their experience.(8) Frédéric Mugnier is one of the founders of Faguo, “a shoes brand which has become (…) a global brand”(9). Céline Lazorthes is the “founder and CEO of the Leetchi Group”.(10) This company edits a payment solution which was instrumental in developing Leetchi.com, “the perfect solution to collect money for group gifts and events”(11).

When the talk lead each of the entrepreneurs to the subject of seed capital, Frédéric Mugnier drew first : “Don't wait too much for any help from the banks. Try to do it yourself and then you will call them after a year.”(12) And Céline Lazorthes : “Or two”, Frédéric Mugnier again : “Or two or three”. This exchange reveals the lucidity of those entrepreneurs with regard to the actual (lack of) help from the banks at the beginning of the entrepreneurial venture.

Beyond particularities, the most edifying observation about the lack of interest of the French banks when it comes to entrepreneurship exposes their absence in the realm of the acceleration of start-ups. This domain was first occupied by private initiatives involving different competencies related to, among others, the management of projects or the relationships between founders and investors, or clients. Now, private companies are seeing their interest in investing the place.

3.2 The opportunity for private companies

Increasingly, private companies understand their undeniable interest in fostering future corporate clients, partners or investment vehicles. This is concretised by the creation of structures like MV Cube in Rennes,a start-ups incubator established by a business “specialised in digital strategy”(13), or the « accelerator for start-ups, based in Nice”(14) founded by the insurance company Allianz France.

These private institutions have perfectly operated in accordance with one of the lessons drawn from the article Enabling Entrepreneurial Ecosystems and introduced by Endeavor Insight : “Favor incumbents less.”(15) The research body explains : “ Efforts to create a 'business friendly' environment often favor market-leading incumbents and therefore actually hinder entrepreneurship.”(16)


The present article was first published in the newsletter -The Series- of 02 March 2015.

SOURCES

(1)ENDEAVOR INSIGHT. Enabling Entrepreneurship Ecosystems: Lessons from Ecology and Biology . 23 February 2015. Ecosystem insights. <http://www.ecosysteminsights.org/enabling-entrepreneurship-ecosystems-lessons-from-ecology-and-biology/> accessed 02 March 2015

(2)UMUCYO Alain-Patrick. La French Tech, un an après – 1.2 Le modèle Endeavor . 12 February 2015. AgoraVox. <http://www.agoravox.fr/actualites/economie/article/la-french-tech-un-an-apres-163390> accessed 28 February 2015

(3)ENDEAVOR INSIGHT. Enabling Entrepreneurship Ecosystems: Lessons from Ecology and Biology . 23 February 2015. Ecosystem insights. <http://www.ecosysteminsights.org/enabling-entrepreneurship-ecosystems-lessons-from-ecology-and-biology/> accessed 02 March 2015

(4)Ibidem

(5)AVECLESPME.FR. Aveclespme.fr. . Aveclespme.fr. <http://www.aveclespme.fr/> accessed 28 February 2015

(6)Ibidem

(7)UMUCYO Alain-Patrick. -The Series- L'aliénation de l'infrastructure French Tech -The Series- 23 February 2015. The Series. <http://eepurl.com/beZOkz> accessed 28 March 2015

(8)JOB TEASER, LAZORTHES Céline, MUGNIER Frédéric. Conseils d'entrepreneurs - Leetchi.com et Faguo . 05 February 2013. Youtube. <http://youtu.be/P9A49f8DFX0> accessed 19 February 2015

(9)JOB TEASER, LAZORTHES Céline, MUGNIER Frédéric. Conseils d'entrepreneurs - Leetchi.com et Faguo . 05 February 2013. Youtube. 1min03s <http://youtu.be/P9A49f8DFX0?t=1m3s> accessed 28 February 2015

(10)MANGOPAY. Leetchi corp . Mangopay. <https://www.mangopay.com/about-us/> accessed 04 March 2015

(11)LEETCHI.COM. Leetchi.com . Leetchi.com. <http://www.leetchi.com/en> accessed 05 March 2015

(12)JOB TEASER, LAZORTHES Céline, MUGNIER Frédéric. Conseils d'entrepreneurs - Leetchi.com et Faguo . 05 February 2013. Youtube. 5min09s <http://youtu.be/P9A49f8DFX0?t=5m9s> accessed 19 February 2015

(13)MV CUBE. Présentation . MV Cube. <http://www.mvcube.fr/presentation/> accessed 28 February 2015

(14)ALLIANZ. Allianz France lance l’appel à candidature pour la première promotion de son accélérateur de start-up, basé à Nice et spécialisé dans le big data, les objets connectés et le stade connecté . 19 February 2015. Allianz. <https://www.allianz.fr/v_1424366756000/qui-est-allianz/allianz-en-france/espace-presse/communique-de-presse/media2/CP_AZ_France_Appel_candidatures_accelerateur-19022015.pdf> accessed 28 February 2015

(15)ENDEAVOR INSIGHT. Enabling Entrepreneurship Ecosystems: Lessons from Ecology and Biology . 23 February 2015. Ecosystem insights. <http://www.ecosysteminsights.org/enabling-entrepreneurship-ecosystems-lessons-from-ecology-and-biology/> accessed 05 March 2015

(16)Ibidem

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