The Emergence of Start-ups

In France, the number of young start-ups has soared since the beginning of the 2010s, leading the government to encourage their development and make France the “start-up nation”.

This book contributes to a better understanding of the emergence of these companies by studying the influence of the ecosystem on their development and the modes of financing that they use. The financing of start-ups remains a major challenge insofar as they are often faced with refusal from the banks. Successful financing depends largely on the geopolitical and economic environment. Through a comparative study of models from both France and English-speaking countries, the authors explore possible financing solutions for France. The book concludes with a discussion of equity crowdfunding, which proves to be a successful financing alternative.

Including theoretical and empirical studies, this book provides concrete solutions aimed at developing innovative entrepreneurship in France.

David Heller is a professor-researcher in finance and head of the Master’s course in Finance at ISC Paris, France.

Sylvain de Chadirac works in the start-up financing consultation market. He is the managing director of Paris Business Angels.

Lana Halaoui is preparing to start her own company after completing her Master’s degree at ISC Paris, France.

Camille Jouvet has undertaken several projects, such as the ISC Business Tour, aimed at boosting the ISC Paris alumni network internationally.

Introduction ix

Chapter 1. The Influence of the Ecosystem on the Development and Financing of Start-ups 1

1.1. Contextual framework: the needs and challenges of start-ups 2

1.1.1. The start-up, a 21st-Century initiative 2

1.1.2. Financing of start-ups 8

1.1.3. Start-ups in different spaces: context of comparison 14

1.2. Analysis of the two spaces according to the criteria for successful fundraising: revealing a correlation between the environment and start-up financing 20

1.2.1. The political influence of ecosystem development 21

1.2.2. The attractiveness of the spaces: training and information 31

1.2.3. The digital revolution: the opening of markets and financing methods 36

1.3. Research methodology 41

1.3.1. Qualitative study conducted through semi-directive interviews 41

1.3.2. Analysis and interpretation of the results collected 44

1.3.3. Validation of hypotheses: the influence of the ecosystem on the financing of start-ups 51

1.4. Conclusion 52

Chapter 2. Financing Young Innovative Companies in France 55

2.1. Introduction 55

2.2. Contextual framework: young innovative companies in France 56

2.2.1. Characteristics of young innovative companies 56

2.2.2. Impact of innovative entrepreneurship on growth 58

2.2.3. Financing innovative entrepreneurship 61

2.2.4. France’s place in the financing of young innovative companies 70

2.3. Empirical study: analysis of entrepreneurial dynamics in France 72

2.3.1. Method of analysis 72

2.3.2. The strategy of funding assistance institutions 75

2.3.3. The strategy of innovation entrepreneurs 79

2.4. Reinforcing aid for the financing of young French companies 82

2.4.1. Lessons learned from foreign models 83

2.4.2. The American model 83

2.4.3. The British model 85

2.4.4. The case of Singapore 88

2.5. Strengthening participatory financing structures 90

2.5.1. Characteristics of participatory financing 90

2.5.2. Interest of participatory financing 92

2.6. Economic recommendations 93

2.7. Conclusion 94

Chapter 3. Equity Crowdfunding of Start-ups in France 97

3.1. Introduction 97

3.2. Contextual framework: state of play on the financing of start-ups in France 99

3.2.1. The evolution of entrepreneurial finance and sources of financing 99

3.2.2. Financing practices of start-ups 106

3.2.3. The process of raising funds from private investors 112

3.3. Equity crowdfunding: a fast-growing financing alternative 120

3.3.1. Presentation of participatory financing and equity crowdfunding 120

3.3.2. The stakes and limits of equity crowdfunding 127

3.3.3. Complementarity of financing methods 132

3.4. The entrepreneur at the head of strategic decisions 135

3.4.1. Meeting with entrepreneurs: presentation of the study conducted 136

3.4.2. The perception of financing by entrepreneurs 139

3.4.3. The success of the company as perceived by entrepreneurs 144

3.5. Conclusion 146

Conclusion 149

References 153

Index 165 

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