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France gives a chance

If words are used frequently, their meaning is often lost. Terms innovation is likely to be used for trivial replication, investments for transferring money from the right pocket to the left, a start-up for any new enterprise … But I’m not talking about terminology, rather about how you can raise funds for real innovative developments. In France.

Maybe, it is possible in Russia, too. Let someone else who succeeded write about it. The main problem in our country, as I see it, is in relations with government agencies, which, in fact, are responsible for investment policy in the regions. The dominant source of funding is government-supported innovation programs run by officials. As you know, officials must adhere to certain regulations and follow clear instructions. But the problem is that there are simply no such instructions in relation to innovative enterprises. There are no criteria to what is considered an innovation, leading to the vague criteria for selecting eligible participants, and excessive red tape around the process.

France gives a chance

In France, the bureaucracy also exists, but at the same time there is a fairly clear and streamlined system within which you understand what awaits you at the end.

To obtain investment support in France, it is necessary to carry out research activities to implement a project in the field of high technology. The list includes IT, communications, IoT, big data, robotics, etc. Pretty much everything you can imagine. A project can be at any stage of development: there is funding that covers R&D, funding for development to a finished product and launching it to the market.

The choice of institutions is wide, i.e. support is provided by several dozen large and two to three hundred small funds and establishments representing both public and private capital, as well as various types of government support to attract banking resources.

To access them, you need to be an SME (micro, small or medium-sized enterprise), with less than 250 employees and an annual turnover of less than 50 million euros or a total annual balance of not more than 43 million euros. The company must be established in France. Such an enterprise must not be controlled by large industrial or financial establishments. It must however develop innovative technologies or deploy new products or services.That being said, the product/service must have the potential for market growth – this will be appreciated by the investors.

If there is nothing but an idea or an innovative business model, it doesn’t matter ether – you can still apply for a grant to cover bank loans up to 60% (for example, at the expense of BPI France). Importantly, in this case, the age of the enterprise must not exceed one year (normally they consider the age of up to two years). In general, an individual can also apply for a grant, regardless of nationality, residency and professional affiliation – subject to eligibility criteria for starting a business. Here is an example: the 22nd edition of the i-Lab Innovation Competition was opened on December 3, 2019, and applications closed on February 12, 2020. Application process is easy, i.e. head to the website, download documents, fill them out and contest.

There are large, national funds, there are also local ones interested in the development of their region. How do they work? For example, Provence Promotion, the state agency for the economic attractiveness of the Aix-Marseille Provence Metropolis, is able to raise 1 euro of subsidized aid for 1 euro of your own investments using the capabilities of the previously mentioned BPI France, and also raise up to nine euros for one of yours as a loan. Another example, the MonacoTech startup program opens up wide access to the vast investment opportunities of the Principality – the hardest part is to get into it.

France gives a chance

IFPEN fund is a powerful nation-wide instrument. It focuses on financing R&D activities, which are performed by various research institutes in our country. Ultimately, we are talking about millions of euros: in 2018, out of 280 million euros of the total budget, 233 million were spent exclusively on R&D. IFPEN has a rather curious set up – it is the so-called public industrial and private institution (EPIC), controlled by the Department of Energy. Half of the funding is provided by the state, half – by industrial partners interested in the development of certain technologies.

France gives a chance

State support for innovation in France (including through IFPEN, but not limited) can be of several types. These include minority investments with participation in the management of a startup, direct non-returnable investments from 1 to 10 million euros, Pari Passu joint investment with private players, various forms of long-term support or raising venture capital. As you can see, France offers wide opportunities for the development of innovative business, provided you a driven by desire and have appropriate ideas.

Financing through investment can be obtained through various channels and at various stages – literally from ex nihilo (out of nothing) to launching a finished product to market. Such a streamlined system gives a visible result. France is one of the most advanced in the world for providing finances to introduce high technologies in various sectors of the economy.