The early-stage seed capital funding phenomenon is far more widespread in the United States than in Europe. The ‘business angels’ ecosystem in France is still rather low-key, but it looks set to grow.

Business Angels: Still a Rather Low-Key Ecosystem in France
The ‘business angels’ culture emerged over forty years ago in the United States, and is today very much a part of the US company funding system. However, while business angels in the US invest some €20 billion annually in fledgling companies, the European Union pales by comparison, with investments of just €4 billion, reveals a report by, the first online platform in France designed to bring startups and investors together. The figure for France is €125 million, invested by some 8,000 players. This compares with 50,000 active business angels in the United Kingdom, which is way ahead of other European countries both in terms of numbers of business angels and the sums invested. However, France boasts a large number of investor associations and is beginning to stand out, indicates the Fundme report, which provides some interesting statistics on investor profiles. 

The role of investor associations

France has 84 business angels associations spread throughout the country. Their purpose is to highlight the most promising startup companies and encourage their members to invest. In 2012 early-stage investors provided €40 million to 352 companies, i.e. an average investment of €114,000. The median investment in the seed-funding sector is around €20,000, but 52% of all investments fall below this sum. Among the 8,000 known French business angels, as many as 4,000 are members of an investor association – the highest proportion in Europe. By comparison, in the UK only 10% of all business angels are members of an association. Fundme explains that, over time, the percentage of business angels who belong to a network has been seen to decline so it appears that the UK statistic is a sign of greater maturity compared with the current French ecosystem.

Business Angel morphology 

It comes as no surprise to learn that the e-commerce, high-tech and software sectors carry off the lion’s share (35%) of all early-stage investments, with renewable energy taking 7%, and luxury goods, media and social networks 5% each. The vast majority of seed investors are men, this figure reaching 94% in France, with a very similar situation across other European countries. Only 5% of the members of the European Business Angels Networks (EBAN) are women. In France, a third of those providing seed capital are resident in the Ile de France (Paris region). In fact over half (56%) of all French business angels are business school graduates, with alumni of the HEC (8%) and ESSEC (7%) business schools leading the way. The remaining 44% of business angels are graduates of engineering schools, so those providing startup financing appear to have a relevant higher education background. Lastly, the report shows that those who have themselves set up their own company predominate. Some 52% of French business angels are company owners, although this group represents just 0.3% of the total working population. Looking at the profiles of the 48% of seed capital investors who are not entrepreneurs, almost all of them work in the Internet or finance sectors, reveals Fundme.
By Pierre-Marie Mateo