What is a network?

Business angels very often operate within networks. A business angel network is a formally constituted organization that connects potential investors with entrepreneurs, aiming to facilitate investments by business angels and serve as a focal point for entrepreneurs seeking funding.
Each business angel network that is a member of France Angels commits to supporting and promoting business angel activity in its region and to connecting entrepreneurs seeking funding with the business angels belonging to its own network.
France Angels brings together various types of structures with diverse objectives and differing operational and investment approaches.

Legal structures

The associative networks are structures dedicated to bringing entrepreneurs / investors together. Generally, the structure organizes monthly meetings to present selected projects to an audience of potential investors. These networks are mainly used for projects requiring small amounts (often less than 200,000 euros). The Business Angel joins such a network by paying an annual fee. The network pools its expertise with the other network members and makes its own decision whether or not to invest in the projects presented.

The establishment of these investment companies can meet two objectives:

  • Some Business Angels (especially in a small group, from 10 to 20 people) wish to remain “among themselves” without seeking strong regional visibility. They then agree to put their money in a “common pot”.
  • Certain networks wish to acquire, in parallel with the associative structure, a BAIC allowing them to supplement the investments of individual Business Angels.

Creating an investment company requires strict operating rules (board of directors, chairman, etc.) and investment decision (investment committee). It imposes a fairly rigorous discipline on its members but is very effective in terms of quality and speed of decision as well as of investment capacity.

There are 2 types of appropriate legal and fiscal structures:

  • The limited company / joint-stock company allowing in particular to benefit from reductions of the personal income tax and solidarity tax on wealth during the investments of the holding company in eligible SMEs,
  • The limited company / joint-stock company’s “Venture Capital Company tax option” allowing in particular to benefit, when reselling the interests, from an exemption from capital gains.

It is possible to create a mixed organization (Association + Investment company). More and more networks having experience with the associative structure or the Investment Company structure come to the conclusion that a double structure (whether or not the Business Angels are members of the two structures) has many advantages. The associative structure allows easier “acculturation” of new, less experienced Business Angels, various communication actions aimed at recruiting new members and systematic contact with entrepreneurs seeking funding. The Investment Company structure enhances organized collective decisions and it effectively brings together a larger number of Business Angels, both active and passive.

Investment process

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    Sourcing

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    Preselection

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    Presentation

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    Due Diligence

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    Closing

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    Follow-up

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    Exit

Types

Networks of Business Angels are organized in three different ways:

  • Geographical

    Their scope of actions is local, departmental, regional or national

  • Thematic

    They specialize in a specific activity sector (Health, ICT, Agri-food, Environment, Wood industry, etc.)

  • Affinity-based

    The alumni of colleges and higher education institutes (ESSEC, Polytechnique, Arts & Métiers…)

Advantages

Coming together in a local network, thematic or by sector, allows Business Angels to better organize themselves and to share experiences, decisions and investments.

01.

EASIER & WIDER ACCESS

Access to more files, both interesting and original. A network is a regional point of attraction for entrepreneurs seeking funding

02.

SKILLS & EXPERTISE

Sharing skills and expertise with other Business Angels allows to deal with more complex projects

03.

ANALYSIS & STUDY

Dividing the analysis and study of files between several Business Angels reduces the risk of error in judgment on projects and entrepreneurs

04.

COMMON INVESTMENT

In the same project, which allows either to consider larger projects or to be able to invest in a greater number of projects while reducing individual risks

Networks directory

How to create a network?

The establishment of a network of Business Angels is very specific, in particular in a region, and has to be adapted to each particular case. France Angels offers its know-how and contacts to stimulate the creation of such a network. France Angels specifically uses a proven method: information day, public conference, technical support for the initial team.

Contact France Angels