This book is dedicated to European start-ups, specifically French start-ups. Herein we analyze three main parts: the influence of the ecosystem on start-ups, the different methods of financing innovative companies, and financing by equity crowdfunding in France. To conduct our analysis, we use concrete examples and interviews with targets.

The word start-up is an ellipsis of start-up company, an expression designating an innovative company that is starting (start) and is subject to strong growth potential in the new technologies sector (up). However, this rapid development implies fragile growth that is dependent on an ecosystem-like environment. The balance is based on informed support, an appropriate legal framework, an attractive market and, more particularly, abundant financing solutions.

It is in this sense that Chapter 1, entitled “The Influence of the Ecosystem on the Development and Financing of Start-ups”, has a dual microeconomic and macroeconomic dimension. Indeed, the main start-ups have emerged in the United States and Europe, and we have adopted an international comparative approach in order to understand the financial development patterns of start-ups in several Western and developing countries. Focusing on the available human, political and economic levers, the main issue of this first part is as follows: how does the geopolitical and economic environment favor the financing of start-ups? The empirical study is based on the results of interviews conducted with French investors, financing professionals in the African market, coaches and a founder of start-ups. The conclusion shows a very significant impact of new technologies on the financing of companies in general and start-ups in particular. In addition, French political strategies are being put in place to promote and support the development of innovative companies (such as French Tech) to ensure the stability of the French market.

The second part includes Chapter 2, entitled “Financing Young Innovative Companies in France”, which puts the financing possibilities of start-ups into perspective in the context of the dynamics of the French market. Given the reluctance of traditional commercial banks to finance young innovative business projects and, at the same time, the ambition of the Head of State to make France “the nation of start-ups” (Lacroix.com 2017), we deal with the following issue: how to facilitate the financing of start-ups in France? Indeed, the development of these companies is an important issue for growth and employment in France, but, depending on the developmental phases, financing is more or less difficult to implement. The results of this empirical study, carried out among leaders of young innovative companies and representatives of organizations providing support for their financing (Bpifrance and Business France), particularly highlight the fact that incentives for start-ups to finance themselves through government policies are more developed in the United States, the United Kingdom, Germany, Scandinavia and Israel than in France. However, the entrepreneurs interviewed acknowledge the usefulness of public support during the project start-up phase, but state that they have difficulty finding appropriate financing when it comes to growth. Thus, the recommendations focus on the development of venture capital and business angel networks in France. Finally, they aim to encourage the development of participatory financing or “crowdfunding”, an effective alternative to traditional financing methods.

Chapter 3, entitled “Equity Crowdfunding of Start-ups in France”, aims to analyze the relevance of equity financing. Through previous research, we have found that it is difficult for French entrepreneurs to finance themselves through traditional means. Many financing alternatives exist for entrepreneurial projects such as love money, business angels, investment funds, banks, public subsidies or the public investment bank. Of all existing financing alternatives, the opening of capital to external investors is the one that allows companies to raise the most funds while providing a significant network to the company in the start-up phase. Equity financing is a new form of capital opening that simply encourages significant fundraising. However, the “crowd” is not expert and the number of investors is large, which poses problems in terms of valuation and governance for the company. Here, the problem is therefore the following: how can equity crowdfunding position itself as a successful financing alternative for start-ups given the entrepreneur’s human capital? This empirical study was conducted with several entrepreneurs. Even though none of our targets have already been financed by equity crowdfunding (all of them even admit to being somewhat reluctant to open their capital for governance reasons), young entrepreneurs accept the idea of being able to use this long-term financing. However, they highlight the need to preserve human capital, which is essential for the sustainability of the project.