7,500 BA in Ger­ma­ny 4,300 BA in France

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Con­cen­tra­ted or de­cen­tra­li­zed geo­gra­phi­cal dis­tri­bu­tion

In France, the few ri­chest re­gions concen­trate most Bu­si­ness An­gels with a strong concen­tra­tion on Pa­ris and the Pa­ri­sian re­gion. While in Ger­ma­ny, there is a ve­ry good re­gio­nal dis­tri­bu­tion of Bu­si­ness An­gels in all the Län­der of the West, mo­reo­ver ma­ny more than in France (7,500 in Ger­ma­ny against 4,300 in France)(3).

A small coun­try like the Ne­ther­lands to­tals 3200 BA and fi­nances more than 200 mil­lion € per year.

BAs are main­ly lo­ca­ted in the ri­chest re­gions. 76% of BAs are in Nor­thern Ita­ly, for example.

What are their se­lec­tion cri­te­ria?

The main BA se­lec­tion cri­te­ria is the high ca­pa­ci­ty to in­crease the va­lue of the start-up’s shares in a short time (2 years).

The BAs fi­nance al­rea­dy exis­ting young com­pa­nies that prove their abi­li­ty to si­gni­fi­cant­ly in­crease their tur­no­ver and ge­ne­rate a high pro­fi­ta­bi­li­ty by re­lying on a new ser­vice, a new pro­duct or pa­tents and thus ha­ving the ne­ces­sa­ry at­trac­ti­ve­ness to in­ter­est a large com­pa­ny or the abi­li­ty to make a good IPO in a short time (ideal­ly 2 years).

On­ly in­no­va­tions ap­pli­cable to a mar­ket can ap­peal to BAs. Thus, the most in­ves­ted sec­tors are ICT (In­for­ma­tion and Com­mu­ni­ca­tion Tech­no­lo­gies) (43% in Aus­tria, 48% in France), but all in­dus­trial sec­tors can be co­ve­red.

The BAs re­ceive a lot of pro­jects, they do not present much to their in­ves­tors who them­selves are not all fi­nan­ced. The Aus­trian net­work ABAN re­ceives about 50 pro­jects eve­ry year, se­lects 60 and on­ly about 20 get BA fun­ding. In Bel­gium, the 400 Bas re­ceive 750 pro­jects per year and so 40-50 deals an­nual­ly for a to­tal amount of around €10 mil­lion. A small coun­try like the Ne­ther­lands to­tals 3200 BA and fi­nances more than 200 mil­lion € per year.

Among Bu­si­ness An­gels, if they re­ceive 1000 pro­jects per year, they will se­lect 400 and they will au­di­tion alone for 10 mi­nutes to se­lect on­ly 160 and present to in­ves­tors 40 to 50 pro­jects for 30 mi­nutes which them­selves will on­ly find fun­ding for 20 to 30 star­tups.

How go­vern­ments sup­port BA?

Pu­blic sec­tor can set up a BA net­work as it did in Aus­tria (ABAN)(4), in Ger­ma­ny (BAND) (5), in the Ne­ther­lands (BAN)(6). It can al­so fa­vor BA in­vest­ments by tax de­duc­tions as in France (2007 TEPA law on wealth tax –ISF), in Ita­ly or in Uni­ted King­dom (“70% of the ove­rall in­vest­ment is co­ve­red by the go­vern­ment through tax breaks”)(7). The pu­blic au­tho­ri­ties can al­so set up grants and co-in­vest­ment funds (in Ger­ma­ny HTGF, ERP Start­fonds, EAF, in the Ne­ther­lands Seed, in France re­cent­ly An­gel Source ..).

Crowd­fun­ding, new BA ten­dan­cy ?

Ma­ny BA are in­vol­ved in crowd­fun­ded plat­forms. In the Uni­ted King­dom, 23% of an­gels in­ves­ted by the crowd­fun­ding plat­forms.

Those in­ves­tors are youn­ger pro­file of BA (in the UK, 74% are bet­ween 25 and 54 years old, half less 45years old).

What fu­ture for BAs?

In the context of the de­ple­tion of re­sources, the re­duc­tion of the la­bor fac­tor in re­la­tion to ca­pi­tal and the­re­fore of work-re­la­ted wages, the aging of the po­pu­la­tion, there is a risk of las­ting im­po­ve­rish­ment of part of the po­pu­la­tion of the Triad coun­tries (Wes­tern Eu­rope, North Ame­ri­ca, Ja­pan) and el­sew­here in the short and me­dium term.

Thus, BAs do not fa­vor sus­tai­nable de­ve­lop­ment en­tre­pre­neurs be­cause these pro­jects are less pro­fi­table, re­quire long-term in­vest­ments and the consi­de­ra­tion of so­cie­tal and not just fi­nan­cial ob­jec­tives.

At the same time, the pu­blic ove­rin­deb­ted­ness of these same coun­tries of the Triad and the high risk ta­king of en­tre­pre­neu­rial pro­jects make BAs an in­dis­pen­sable tool for the de­ve­lop­ment of the 4th in­dus­trial re­vo­lu­tion.

It would re­quire a new ge­ne­ra­tion of BAs that would in­te­grate so­cie­tal pro­jects if in­ves­tors or Pu­blic po­li­cy make them a condi­tio­nal goal. It would be be­ne­fi­cial so­cial cri­te­ria for consu­mers (health, ener­gy sa­ving ...) or em­ployees (num­ber of jobs crea­ted, qua­li­ty of jobs, wor­king condi­tions and wages ...), en­vi­ron­men­tal cri­te­ria (sus­tai­nable de­ve­lop­ment, pre­ser­va­tion of re­sources, low le­vel of pol­lu­tion, ...) or re­search (space, ...) or culture (mul­ti­cul­tu­ral di­men­sion, pea­ce­ful phi­lo­so­phy..).

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