A specialist by excellence in the financing and development of investment projects, Mrs. Annie Prod’homme is a specialist by excellence in the financing and development of investment projects. Thanks to her many years of experience, she masters today the language of some and the constraints of others. Given her combined expertise in the fields of finance and ICT, she works as a Business Angel to find and shape investments for start-up companies around the world. In the following interview, Mrs. Annie Prod’homme shares her commitments and judgments with us with convincing candor.
Bridges Builder : Tell us more about your many years of experience as a business angel and start-up financing.
Annie Prod’homme :
When I was offered the opportunity to be part of Sophia Business Angels less than a year after its creation, I didn’t know what a business angel was, but I quickly realised that – like Mr Jourdain – I was one without knowing it. At least for the “angel” part, which consists of giving his time and experience to help a project get structured. By becoming a business angel in the “business” sense of the term – i.e. an investor – I quickly understood the need to know a business sector perfectly before getting involved financially. In other words, if the “crush” for a project leader explains the voluntary work, it should never be the origin of it when we invest our own money or encourage others to invest alongside us. There is a simple reason for this: an investment must be profitable. In order to at least recoup your investment, you have to take calculated risks and therefore be able to assess them. If there were only one rule for me, it would be this one, because we only play our role as business angels when we are able to help the project owner in a concrete way during the whole time of our participation (advice, contacts, etc…) and make sure to significantly increase the value of the project, in the best interest of all.
What is a good project or a good start-up, according to your experience?
I would tend to say that a good project is what it promises, and a good start-up is what it does! The project has to be transformed into a product/service that in turn meets a market. Without optimal conditions of profitability for the start-up, acceptable prices for the target market and an advantageous competitive positioning (quality/price ratio in particular) there will simply be no turnover. So it all depends on the speed at which the product/service is marketable, the business model chosen, and the price offer. A good start-up is therefore the one that integrates all these factors as essential prerequisites before taking any steps whatsoever, especially when looking for funds.
What does Sophia Business Angels bring to project owners and start-ups?
Sophia Business Angels is an international club that brings together men and women of 14 different nationalities; very experienced, they have mostly held high responsibility positions internationally, or created one or more successfully resold companies. In addition to their ability to invest personally, their added value is considerable in terms of experience and networks, both nationally and internationally. They provide support to project leaders and help them bring together the various players involved in assisting and financing start-ups at the seed and development stages. They open the doors to strategic partnerships (commercial, technological) and facilitate access to European funding in particular.
What is your assessment of financing methods for start-ups in general and equity investments in particular?
The diversity of the funding available to start-ups is mainly due to: the innovative or not innovative nature of the product/service it markets, the amount of its equity capital, its stage of development (proof of concept, beginning of turnover, seed capital, first developments), the nature of its needs (end of R&D, prototype, hiring, intellectual property, Go to Market, internationalisation), etc., the amount of its needs and the expected timing of the availability of funds. As a result, there are several types of addressable financing: honour loans (repaid by the individual), “love money”, innovation loans & grants, traditional bank financing, calls for projects, business angels and VCs. So and to answer your question: there is no good financing for a start-up that does not meet the following requirements: a minimal debt in external financing as long as there is neither proof of concept nor an identified market and a validated business model with respect to the target market and the competition; the systematic implementation of leverage effects between public and private financing and this at each stage of development; the opening of phase 2 capital to VCs as soon as the valuation allows the exit of first-time investors who wish to do so and only if the management team has perfectly integrated the ins and outs of a fund raising, the need to be significantly diluted in the capital and the need – very often – to no longer be the sole decision-maker when development requires the establishment of an operational board of directors. As you will have understood, if sometimes things go wrong, it is because elementary rules of caution and acceptance of other people’s imperatives have been disregarded…
Won’t the current economic climate encourage a decline in business angel commitments and have a negative impact on the financing of start-ups?
Unless the fruit of their savings has been altered by the crisis, being a business angel is above all a state of mind: it is therefore not what will stop them, especially since all countries have taken significant measures to support businesses weakened by the crisis, including start-ups.
What advice do you give to project leaders and start-ups looking for financing in this difficult environment?
Always have plans B,C etc. It is also necessary to quickly take all measures to lighten the fixed loads. Also, it would be important to take advantage of this crisis to rethink the economic model and identify partners likely to reduce variable costs. However, it is necessary not to resort to external financing to make up for a cash loss, always favouring the use of debt scheduling and negotiation. Do not hesitate to seek advice from the CCIs, accountants and lawyers, all of whom are highly mobilized.
See also :
Emmanuel Bocquet: The African Digital Business Booster
Mohamadou Diallo, Founder of Cio Mag & ”African Digital Tour”. ”22 of the 51 investment funds, are in Africa and run by Africans.”
”Tomorrow, the regulation of remote work as a mode of exercising work in Africa”.David TSAASSE, Consultant
Gemma Rubio Rodrigo: A Digital Entrepreneur
Chams Diagne, Founder of Talent2Africa ”The countries and industries that recruit the most in Africa”…