Connect with us

Hi, what are you looking for?

France

Fundraising: the tree that hides the forest

This highlight contrasts with the obscurity in which the tax incentives for innovation (CIR/CII/JEI) remain plunged. However, these measures are worth 7 billion euros and concern many more companies. As a result, 80% of eligible companies miss out on tax incentives for innovation, often because they are not aware of them…

In five years, the amount raised by startups in France has increased almost fivefold, from €1.81 billion in 2015 to €5.39 billion in 2020. A record that testifies to the growing interest of startups in this financing solution. This figure also helps to maintain the myth of the young nugget, which starts from nothing and is valued at several million euros in a few months of existence. Success stories widely reported in the press make new entrepreneurs dream, even if it means they forget their priorities: customers, product and profitability. How many companies have raised millions and never reached financial balance? Raising funds does not prevent bankruptcy, Take Eat Easy is an example: 16 million raised in 2015 and a turnaround in 2016. That’s why “in Silicon Valley, when you’ve raised funds, people say good luck!” reminds Olivier Younes, professor at HEC, specializing in entrepreneurship and venture capital.

Raising funds can be an important lever and allow you to impose yourself on a market, but it is too often the plan A, plan B and plan C of startups in their development strategy. The media hype about fundraising obscures other sources of financing, starting with tax incentives for innovation. However, these measures are more important (7 billion annual budget) and concern more companies (25,000 beneficiaries compared to 620 French fundraisers in 2020). One might say that there is no need to talk about the research tax credit, the innovation tax credit or the Young Innovative Company status since so many companies already benefit from them. What is the point of talking about such an obvious subject? And that’s the problem! These aids are too largely unknown to startups and SMEs. The proof is that more than 100,000 of them miss out every year. If all managers know about fundraising, how many have heard of the innovation tax credit?

The latter may be reassured by the fact that the CII is no match for the hundreds of thousands of euros raised in fundraising. Here again, this is a double mistake. Firstly, because the CII is not an alternative to fundraising but an independent and complementary source of financing. Finally, the CII is a generous scheme. It represents an average of 30,000 euros per year for a VSE, it is non-dilutive and can be mobilized quickly. But above all it is very accessible! All you have to do is develop a product or software that is new compared to the competition. And the ITC has proven itself. Since its implementation in 2013, it has largely favored the design of new French products. The same products that then make the headlines in the media…

Advertisement

You May Also Like

Estonia

The online platform PRNEWS.IO, developed by a startup, is already helping clients save tens of thousands of dollars annually, mostly due to zero fees...

News

Onlyfans is starting to get into the Web3 and NFT space by launching an NFT trading card platform called Zoop. After the massive success...

Germany

Mental health is still a sought-after topic. Not only in general society, but also specifically in business, more and more people are becoming aware...

Germany

Mental health continues to be an important topic in our society. More and more startups are founded specifically in this field to support individuals...