Start-up financing - Assistance and raising capital

The term "start-up" emerged with the development of the Internet, to complement the term "young company". It asserts a future growth in activity and results, and can be applied to a wide variety of companies in all sectors, but is more easily attributed to high-tech industries. These are young, innovative companies targeting a new or poorly satisfied need, driven by the expertise and conviction of their founders, and in need of risk-adapted financing. Innovation creates need, helps justify higher prices, and facilitates growth at the expense of conventional players.

Some so-called "technology" companies, wishing to capitalize on a breakthrough achieved in the laboratory to create a disruptive innovation, can secure their first steps by going through support stages before raising funds. Obviously, most young companies, even if they are technical, are not start-ups, and present less risk, but less growth, and are financed like normal companies.

After a long maturation phase, start-ups are now hoped and expected to deliver a little extra sustainable growth, different from the ephemeral growth that many countries thought they could easily buy on credit, with heavy public and/or private debt and turbulence.

Some major successes, contagion and competition with the rest of the world, have contributed to this success and helped create new public and private support since the 2000s, despite the telecoms bubble and subsequent cascading financial bubbles.

As the amount of funding increases, working methods evolve. The number of players is increasing, and the concern for efficiency is becoming more precise: support, loans and financing for start-ups are diversifying, and focusing on specific situations. Founders need to be aware of their existence, how they work and how they complement each other. Options need to be identified well in advance and integrated into their growth plan.

Specifically, this article :

• provides a detailed list of public support (financing, practical assistance, taxation) and private support (honor loans, seed investment funds and business angels);

• presents the general scheme of fundraising;

• lists the main springs;

• specifies how the various players operate;

• details key documents such as the business plan and shareholders' agreement;

• describes the basics of company valuation;

• discusses the next steps;

• summarizes the strategies to be followed in seeking successive rounds of financing, and the rules...