Policy brief 265 - Strengthen seed funding
The Centre d’analyse stratégique released the policy brief:
Strengthen seed funding
The very first years of a company, the start-up phase, is the most delicate phase for funding and support.
In France, the strong government commitment to finance and support innovative start-ups is largely based on capital risk. However, capital-risk only partially meets the needs for seed funding in the start-up phase. In addition, the tax provisions that mobilize private savings in this sector also structure the sector while inducing bias in the practice of venture capital.
Solutions to remedy this lack of funding and provide more qualitative support for start-ups, strengthening support for new initiatives, specifically those positioned very early stages, exist.
This policy brief first determines market failures - notably the lack of support in the critical period between the informal funding (business angels) and the new investors (venture capital) - before looking more specifically at how to strengthen seed funding in itself. Finally, the policy brief examines the different initiatives that could assist the government actions in this matter. The following recommendations are suggested:
- Pursue and support funding by connenecting different experiments with the mechanisms of the “National Seed Financing Fund”
- Reserve a share of its investments that are able to support new investment practices at the start-up stage, such as accelerators
This policy brief extends and deepens the work started in: Business angels and venture capital in France: tax issues (Policy Brief 237 - September 2011).
Press Contacts:
Jean-Michel Roullé, Head of Communicaitions jean-michel.roulle@strategie.gouv.fr Tel. : +33 (0) 1 42 75 61 37
Jonathan Lorrillard, Communications Officer jonathan.lorrillard@strategie.gouv.fr Tel. : +33 (0) 1 42 75 60 39