Access to Financing
The challenges related to financing, seed funding, or development are common to all companies. However, eco-businesses face particular difficulties due to their dependence on regulations and the significant delays in penetrating environmental markets.
This is also a consequence of the lack of visibility of the sector. Indeed, there are still few venture capital funds and business angels specialized in environmental fields. This occurs in a context of very limited access to bank financing.
While situations differ between eco-businesses with high growth potential and those with moderate growth, all eco-SMEs face difficulties in financing their growth.
Alongside these obstacles to obtaining private financing, eco-businesses must navigate a wide variety of dedicated public financing schemes (74 measures / 115 actors).
To address these challenges, eco-business networks have developed systems aimed at strengthening companies’ capacity to find financing and guide them to the right contacts.
Support in seeking financing. The Sénart eco-activities club, like many eco-business networks, has developed a number of tools to meet its members’ needs. Beyond listing aid available by theme (export, development financing, innovation), the network provides individual support to companies seeking financing, depending on their project: support for the company on possible financing, identifying the right contact, help with application preparation. A guide on available aid for companies in the sector has also been produced and distributed.
These missions are also objectives of all competitiveness clusters. This is the case, among others, of Trimatec, which helps its members identify the most appropriate funding sources, find partners, determine the state of the art, and validate market aspects. It also plays a role in connecting members with specialized partners, reviewing applications, and lobbying public funders. These are concrete supports that are part of the range of services offered. Since its creation in 2005, with projects related to Future Investments, Trimatec has labeled 186 projects for about €841 million. Similarly, Advancity in Ile de France supports its members in preparing collaborative projects for FUI, ANR, ADEME, and European funding, and since 2006 has developed more than 130 collaborative R&D projects totaling €390 million in investments.
Belonging to an eco-business network, a green cluster, or a competitiveness cluster is essential for companies wishing to be supported in financing, from identifying the right funding source to assistance in preparing applications.
The Connect VC action: Supporting high-potential eco-SMEs in financing search
Led by the CCIR Paris Ile-de-France as part of the Greendustry sector plan,
Supporting high-growth-potential SMEs in their search for new sources of financing. Important players in the economy in terms of innovation and job creation, SMEs suffer from insufficient financing capacity. For innovative companies, this issue is even more pronounced because investment in research and development of new technologies requires high capital efforts. In this context, where financing is a real development challenge, and as Ile-de-France accounts for a significant share of the national turnover generated by the sector, the Connect VC action within the Greendustry plan facilitates the search for new financing sources for SMEs by:
– supporting them in their fundraising efforts through individual coaching,
– connecting them with specialized investors on the sector’s technological themes.
The proposed action is based on 3 key steps:
1st step: Information, awareness, and pre-qualification of companies
– Information and awareness workshops on equity financing
– Connect VC call for applications launched among SMEs
– Submission of an “executive summary”
2nd step: Selection of companies
– Eligible SMEs appear before a selection committee made up of investment professionals and market experts.
3rd step: Coaching and connection with equity investors.
SMEs are guided by fundraising and communication experts to work on their project. They are also connected with investors through individual meetings during a business lunch.
In 2011, following a first call for applications, 4 SMEs increased their equity capital by a total of €10 million. Seven SMEs were selected in the 2012 call and met with 5 private investors each. The first fundraisings resulting from these meetings are expected in 2013.
For more information: http://industrie-iledefrance.paris-iledefrance.fr/tous-les-zooms/215-connect-vc-eco-activite