To fly, a business needs fuel. And this fuel, this is the money that needs to be found. The first warning is to do not carry all the financial risk on your shoulders. The entrepreneur has devoted a lot of energy and time to his project, sometimes suppressing part of his personal life. “If in addition he bet everything, on himself, he will suffer from particular stress that will have an inhibiting effect on his decisions due to the fear of losing everything”, estimated Alexandre Mars.
In the beginning, if possible, you can appeal to the family (this is called “love money”) and then expand the circle of lenders or investors to your friends and then to friends of your friends. Like that Bertrand and Mathilde Thomas launched their Caudalie cosmetics business in 1995.
Very young and inexperienced at that time, they didn’t even try banking, because their chances of convincing were nil. To take their first steps, they turned to their relatives who lent 100,000 francs, then a few months later 200,000 francs. In 5 years, they borrowed 2 million francs (300,000 euros) especially to create their first Spa in Bordeaux. Everything will be paid in 2002, as Alexandre Mars said in his book “Ose! »*.
+ VIDEO / Excerpt from Alexandre Mars’ masterclass at Go Entrepreneurs Paris (April 2022)
Apart from grants, investors
Local and regional aid, Bpifrance… In France, the possibilities of subsidies are also many. But at some point, especially in BtoC activities, the business creator must call a financing professional, whether he is a banker, business angel or investment fund. Of course, an artisan baker will not deal with the same interlocutor as the founder of a self-scooter rental service. For new young shoots, if the income is sometimes quick, the profit is usually not reached in five years. So it is not the traditional banker who may be most inclined to provide them with financing but a business angel or a venture capital pro invests in the start-up phase of a small amount.
However, regardless of their specialty in terms of sectors, these investors will only trust you based on serious guarantees. Several criteria must be respected to have a chance to seduce them. Everyone takes into account the many criteria that start with the famous business plan that reflects the strategy that has been implemented for many years. Customer target, distribution channels, customer acquisition costs, available equity, future financial needs, revenue forecast, etc. will be checked. The profile of the entrepreneur(s) will be reviewed.
In general, investors are wary of “solo” and prefer groups of two or three partners. skills are complementary. And if in addition these founders have other business experiences in the past, this is a serious asset. A new fact is that more and more financing structures, such as Alexandre Mars’ Blisce fund, examine the social responsibility of the requesting company. Does he participate in one way or another for the common good? Does it consider diversity in its recruitment? Does it select its suppliers based on ethical and environmental practices? For these honest investors, social responsibility is no longer a simple checkbox but a condition of the long-term viability of the project.
* “Dare! Everyone can be an entrepreneur”, the book by Alexandre Mars published by Flammarion / Versilio, 255 pages, 18 euros, published in January 2020.