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France

France

3. Employment & Entrepreneurship

3.9 Start-up funding for young entrepreneurs

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  1. Access to information
  2. Access to capital

Access to information

 

There are currently over 10,000 startups in France. In the face of such entrepreneurial enthusiasm, which is especially evident among young people, the public authorities have also introduced measures to maintain it, by stimulating entrepreneurs’ initiatives and facilitating access to information on this economic sector and investment funds.

 

French tech

In 2013, the Ministry in charge of the economy,  launched an initiative seeking to promote development of startups: “French tech”, whose aim is to improve “the clarity and coherence of public action in favour of startups”as well as to put "the front of the national and international scene the collective of French start-ups". It works in collaboration with the ministries of the Economy’s and Finance’s Directorates (General Directorate for Enterprises and General Directorate of the Treasury), the ministry responsible for foreign affairs, and the Commissariat-General for Investment, all of which support growth of startups. Its partners are mainly national operators, including the Caisse des Dépôts, BpiFrance and Business France. Its role is to bring together networks of startups, speed up their development and promote their reputations.

It has a range of schemes and programmes at its fingertips:

The accélérateur de start-up” fund, which provides startups with services, bringing them “industrial” and sometimes financial resources enabling them to grow more rapidly and be competitive at international level. As regards available financial resources, the State may co-invest up to a total of 200 million euros in private initiatives’ equity or quasi-equity

The Bourse French Tech (French Tech Grant) scheme, which enables young startups to cover their initial expenses. It totals between 10 and 30 thousand euros.

The Pass French tech, which enables “hyper-growth” companies to benefit from public support for company development, accelerated evaluation of projects, and membership of a nationally and internationally recognised network.

Higher education

The Ministry of Higher Education is also responsible for promoting startups via the I-LAB scheme, which supports creation of innovative companies and is made up of two components: the Concours national d'aide à la création d'entreprises de technologies innovantes (national competition for assistance to creation of innovative technological companies) and the Prix PEPITE, Tremplin l'Entrepreneuriat Etudiant (Springboard for student entrepreneurship: see 3.8).

In addition, several universities have created their own startup programmes and incubators, including the University of Saclay, which launched “Startup Heroes”, a web series promoting student entrepreneurship, and the University of Orleans, which has its own incubator, the Polytech Startup Lounge.

 

Local authorities

A number of regions and municipalities promote creation of startups on their territories by accompanying young entrepreneurs, providing them with financial support and informing them on existing networks.  As an example,the Rhône-Alpes region and DIRECCTE finance Gate 1, a resource centre for innovative young companies and startups, providing them with assistance and advice.

 

The “1 jeune, 1 solution” plan

The “1 jeune, 1 solution” plan, which aims to mitigate the impact of the COVID-19 crisis on the entry of young people into employment (see 3.6), plans to boost access to training that provides qualifications in digital technology-related occupations.

 

Access to capital

 

The public authorities have introduced programmes and tools designed to facilitate the initial fundraising startups require; many of them are implemented via the Banque Publique d’Investissement (Bpifrance), which can both invest in and fund company projects.

Bpifrance

Bpifrance plays a key role in supporting startups by providing such funding solutions as:

  • The (startup loan (Prêt d’amorçage ), applicable to small innovative companies (with fewer than 50 employees and balance sheet or turnover under 10 million euros) less than 5 years old, in startup phase and having benefited from public support for innovation. The loan is between 50,000 euros and 100,000 euros if it is made by Bpifrance alone, but can run as high as 300,000 euros in the event of a commitment from the Region.
  • The “innovation advance (Avance innovation), made to SMEs and companies with fewer than 2,000 employees and consisting of a participation in funding the project, in the form of a recoverable advance or a zero-interest loan.

 

Other schemes facilitating access to funds (non-exhaustive list)

The ministries responsible for the economy also act to promote startup creation, in particular through encouraging private individuals to invest in startups. Such initiatives include the PEA – Share savings plan (plan d’épargne en actionsenabling obtainment of a portfolio of shares in European companies while, under certain conditions, benefiting from tax exemption.

In addition, setup of business-angel groups and business-angel investment companies has been facilitated by relaxing the tax system applying to such bodies. In the same way, the legal framework governing participative funding has been relaxed so that startups can access it, all the more important as this type of funding is particularly well adapted to innovative companies.

Finally, innovative young companies carrying out research and development projects and enjoying “young innovative company” (jeune entreprise innovante) status can benefit from exemption from taxes on profits and social contributions.