5. Contextual analysis

1. Policy

Macron

President Macron has breathed new life into the country since his election. Out of the Hollande government to found a new centre-right party, La République En Marche, he built an ideal path between a republican and social France, and a France firmly rooted in today’s economic realities. He sells the image of France abroad. For LFA, Macron obviously brings a very positive influence since he is one of the strongest supporters of French entrepreneurship and innovation.

French Tech

The French Tech label was created in 2016 to give a strong common visual identity to French startups in France and especially abroad. Macron makes it a sustained communication during his official visits. This creates an even stronger attractiveness for French startups by foreign investors. The label is now exported to French Tech Hubs in major international cities such as Tokyo, New York, Dubai, San Francisco, London, Tel Aviv and Sao Paulo. This proves the importance of the French state in its support for entrepreneurship, a significant advantage over our neighbours.

Brexit

The UK’s exit obviously has a significant effect on the European economy. This has already prompted several banks to replace their London headquarters with Paris or Amsterdam. Moreover, uncertainty about the British economy is playing in favour of European countries, including France, which is doing well thanks to its mastery of metrics. Germany is entering recession, another opportunity for Paris to regain its position against its rival Berlin for the attractiveness of startups.

2. economic

Employment crisis

Before, it was risky to undertake. Today, it is risky not to. Indeed, the welfare state is no longer able to provide jobs for all. Then there is only one solution left: to start a business. Create jobs yourself. And we note that in the world of entrepreneurship, the employment crisis is the opposite: they seek to recruit but do not find the right profiles. This is a huge asset: surfing the employment crisis to offer a much more interesting alternative. Undertake to work and invest in the future. What the salary no longer guarantees.

Retirement crisis

The reversal of the age curve has changed the game. There are not enough young people to fund the pension fund. Confidence is at an all-time low for young people who still think they will get a “comfortable” retirement. The system doesn’t hold up, we know that. To remedy this, there is only one solution: no longer rely on the state. So rely on yourself. The average salary is by far insufficient to build up a supplementary pension. Conventional risk-free products generate little more than inflation. The only remedy for young people who have the energy to get started is entrepreneurship. To undertake is to invest one’s time in the future and to build up from an early age a sufficient pact to ensure his retirement and that of his family.

Economic crisis

In addition to the negative impact of the 2008 crisis on the global economy, it has been a major blow to the reputation of bankers. However, investors are always focused, for a part of their capital, on risky investments. High risk high return. Yes only when the rules are followed and they are not deviated so that the banker is the only one who gets rich. Wealthy investors: an excellent opportunity has existed since long before 2008 but its boom was felt after the crisis. A simple reason: the return on investment is immensely more important than traditional banking products, even for the riskiest.

German recession

The European economy is intertwined. Europe is made up of several independent countries, but from the outside, it is a single market, a single currency and a policy that goes in the same direction, within the European institutions. If Germany has been Europe’s economic engine for a long time, this is no longer the case today. France has been lagging behind for years, but today it is taking advantage of the German slowdown to become one of the best students. Foreign investors are turning away from our neighbours and are very happy with the arrival of many concomitant positive factors such as the election of Macron and the unhealthy environment of economic war between the US and China. Finally, France appears as a paradise for investors all over the world.

3. Social

Attractiveness of entrepreneurship

The most motivated and competent young people no longer want to work in the big clubs. The big institutions don’t make them look interesting: low and stagnant wages, overwhelming hierarchy, huge structure (employees are numbers), archaic and slow working methods, bullshit jobs endlessly. The startup offers the exact opposite:

  • staggering remunerations (with shares)
  • little or no hierarchy
  • human-sized teams
  • modern and fast working methods
  • no room for bullshit jobs in startups

The choice is quickly made. However with an extra risk spike that some are still not ready to take. LFA will be able to target them through project diversification, including risk mitigation.

Bullshit jobs

The phenomenon of bullshit jobs has taken the world of work by surprise. We realized that among the executives, well paid, many had nothing to do! Really nothing. The phenomenon would be all the more important if the salary is high. This is what anthropologist David Graeber calls managerial feudalism. Straight from our feudal heritage. The consequences of this new phenomenon are not trivial: mood disorders, burn-outs, depressions. Those who realize this choose to leave their employer. Many want to make sense!

Quest for meaning

She’s in everyone’s mind. Employers are twisting their brains to understand what can be done in the minds of their employees. The little end-of-year bonus is no longer enough for them! They also want meaning in their job. In the past, it was the chief who gave this meaning. But today, if the entrepreneur himself no longer knows what is going on in the workings of his huge organization, it is because it has far exceeded the size of what is manageable by a person. Those who come out want to make sense of their actions. The challenges of our world are many: ecology, demographics, economics, poverty. If we don’t understand the impact of our day-to-day job on the world, responding to our deep values, then we’re leaving!

Super fluidity of the job market

This is an extraordinary advantage for new businesses. Where the elders rarely left their posts in one large group for another, this is commonplace today. It has now become a market in its own right. It is not for nothing that recruitment companies take staggering costs of up to 30% of gross annual remuneration! The victims are businesses. It becomes a real challenge for companies to recruit the best talent.

4. Technological

Working remotely

Working remotely does not mean having your feet in the water while your colleagues are working in an office thousands of miles away. Not! Meeting your colleagues is essential. However, working remotely is an excellent opportunity for everyone: it allows you to work close to home most of the time and meet your colleagues to meet, exchange and work as a team. Personal time as well as team time are important. Always being in a team, especially with the horrors of open-space (we may over-sell these open-spaces, a real office is better … a little more expensive, it’s a fact). It is important to have time to concentrate to move forward on a subject. This time, we can not have it continuously with others. Thanks to remote work, it is now possible to work from home, in a shared office (like work or spaces) and have everything necessary, without the inconveniences.

Easy access to technology

The younger generation has lived in digital development in recent decades. It is obvious today to work with a computer and a phone. Yesterday, we couldn’t do without our sheets, our calculator for accountants and the wired phone. Today, the use of our smartphone as a phone is in 7th position of its most used features. In the first position is the reading of the emails and second the use of search engines.

This ease of access to technology has enabled a rapid development of entrepreneurship. Creating a showcase site that is accessible to all, without training. Advertising is extremely simple (with a few clicks on google or facebook that stir a large number of users). The examples are numerous and prove that today it is possible with few means and a quick learning to create the necessary to start a business.

Reducing development and manufacturing costs

Just as access to technology is facilitated, costs are also kept to a minimum. Globalization is now allowing the development of a prototype on a computer from Paris and ordering its manufacture in Shenzhen, China, where prototyping costs are among the lowest.

5. Environmental

Ecological challenges

Startups are definitely the best tool to best meet the most ambitious environmental challenges of our century. There is no shortage of examples to prove it. Starting with food, FoodTech brings together countless startups looking for ways to produce quality, organic and affordable food. Others are hunting for waste. Still others promote local consumption by connecting producers directly with the consumer.

New ways of working

In startup, the organization of work has nothing to do with traditional companies. That’s why it’s possible to run a business without all the hierarchy it used to require. What a terrible burden on the employees’ heads. Today, 75% of employees work in offices. You have to find some form of management. There is a lot of talk about new ways of working, including self-management, holocracy (on which the LFA fund was based), sociocracy, non-hierarchical organization. All this would be difficult to apply without the technological tools at our disposal, but also the changes in mentalities. No need for a top-down war structure to direct employees, quite the contrary. They can handle it less and less! So to boost motivation, you have to have imagination to meet the needs of the team. We are no longer in the era of the Client King, but that of the Collaborator.

Easier to start companies

France is one of the countries in the world where the creation of society has become the easiest and fastest! It can also be the cheapest but it depends on lawyers… Startups offer a company creation from A to Z with statutes in 7 days for 300 euros. The minimum capital requirement is 1 euro. When you compare this with the good old SA whose minimum opening capital is 37,000 euros, there is something to be pleased about.

Free Partnership Society

For LFA, the best structure is the investment fund. It allows its shares to be marketed to outside investors. In addition, the Free Partnership Company, or SLP, created in 2015, is slammed on the Anglo-Saxon model of limited Partnerships, recognized by international investors. This type of fund did not exist in France until 2015, so it was necessary to create an equivalent structure by passing a mirror fund/trust in Luxembourg. This involved significant costs and was too heavy for a venture capital fund. Thanks to the SLP, foreign investors find their mark in a 100% French vehicle.

EuVECA Fund

European Venture Capital Funds (EuVECA) have been set up to promote the financing of unlisted companies. EuVECA funds must intend to invest at least 70% of their capital in startups, which is the case for LFA.

EuVECA funds can only be marketed to professional and non-professional clients who commit to investing a minimum of 100,000 euros.

LFA aims to receive EuVECA accreditation before the lifting of business angels in order to guarantee a brand image brought by the European label.

LFA