If I tell you: “VC, BFT and CII”, do you understand me? Thanks to this article, you will understand the main acronyms used in the world of fundraising.
When Anglicism invades us.
1- Love money. Who better to invest in a startup than family or friends? Love money is a powerful fundraising lever, especially when you start your project. Don’t be afraid to ask your close circle to help you at first. Indeed, they will be more inclined to finance your startup because the trust capital is already installed.
2- PE = Private Equity aims to invest in unlisted companies during their various development phases. In fact, private equity includes :
Seed capital (need to finance research and development).
Venture capital (need to finance the start-up).
Development capital (the company is already profitable and needs to finance its operating cycle).
Transmission capital (need to finance the transmission of a company with or without leverage).
Pre-listing capital (need to finance the company before it goes public).
Turnaround capital (need to buy out companies in difficulty).
Enfin, la forme la plus répandue de private equity est le capital risque (ou venture capital).
3- VC = Venture Capital in English or “fonds de capital risque” in French. Venture capital funds bring together large financial investors, called Limited Partners. The objective is to invest in the start-up and development of innovative start-ups that may become unicorns. They will be able to benefit from the increase in value of the shares and resell their shares between 3 and 7 years later with a capital gain.
4- LP’s = Limited Partners. LP’s can be :
- Firstly, legal entities such as institutions: financial institutions, state agencies, large groups, pension funds, foundations, industrial investors…
- Secondly, natural persons such as individuals: any person with significant financial assets.
5- BA = Contrary to venture capital funds that group together several large financial investors, Business Angels are individual investors who invest their own money in startups that may become unicorns*. Thus, the amounts invested will often be lower than the amounts invested by VC funds which have a greater financial impact due to their grouping.
Did you say “unicorn”?
6- Unicorn = In the world of fundraising, a unicorn is a startup whose valuation is equal to or greater than 1 billion dollars and is not listed on the stock exchange. Indeed, we are talking about startups whose growth is so fast that they can raise millions of euros in a single round of financing to continue their development.
Key fundraising acronyms for grants, competitions and awards
7- BFT = The French Tech Grant is a grant from BPIfrance (Public Investment Bank of France) that aims to support innovative companies that are less than one year old, have fewer than 50 employees and have a turnover of less than €10 million. Aid of up to €30,000 on average is granted.
8- JEI = The Young Innovative Company status allows companies that have been in existence for less than 8 years and that spend up to 15% of their costs on R&D to benefit from tax relief and social exemptions.
9- CIR = The Research Tax Credit is a fiscal measure set up by the State to support and accompany companies that invest in research and development. It allows innovative companies to finance up to 30% of their R&D expenses. The latter must be less than 100 million euros. The RTC is directly deducted from corporate income tax or income tax.
10 – CII = Like the CIR, the Innovation Tax Credit allows innovative companies, which commit up to 20% of their expenses in research and development, to benefit from tax breaks.
With these top 10 fundraising acronyms, you now have a solid foundation for understanding the language of fundraisers.
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