Funding and firm creation

IRDEME, with the help of the pH Group (Experian), performed a study on the high growth firm in France (see definition below). It is the first time that such a study is done for France. Indeed, even OECD which has developed an observatory of high growth firm does not have data on such French companies as this kind of companies is not tracked by INSEE (French statistics office).
Definition of High Growth Firms
The most dynamic companies, called High Growth Firms (HGF) have the following (...)

In a previous study on equity capital of French companies, we have shown that, compared to British companies, French firms are undercapitalized. One of the potential reasons of this difference is that French companies earn fewer profits than British ones.
Indeed, during a company life cycle, the main funding source for investments comes from the profits earned during the year. This is called self-financing. National accounting of non-financial companies shows that this kind of companies (...)

In this period of doubts and uncertainty in the global economy we are facing these latter weeks, and that had reached its peak last week with the announce of the Greek referendum (aborted) and the resignation from Papandréou in Greece and Berlusconi in Italy, it is important to have indicators allowing to know if European economies are strong enough to face an important crisis.
One of these indicators could be the amount of equity capital of the companies of a country. Indeed, equity (...)

At the beginning of their life, private company can use several means of funding: Personal capital of the entrepreneur (or its friends and family) Business angels Venture capital
This funding can occur during the seed and early stages of the company life cycle.
The venture capital is a subset of private equity. Therefore all venture capital is private equity, but not all private equity is venture capital.
As described by the Private Company Financial Data Authority, “private equity (...)

Venture Capital and the birth of the Business Angels
The term Business Angels (BA) was created around 1985 by Professor William Wetzel, University of New Hampshire, USA. It is indeed in the preceding years, during the 60’s and the 70’s, that BA have expanded in the USA under the effects of a law passed in 1958 by the US Congress aware of the funding problems of start-ups: the Small Business Investment Act.
This law aims to encourage individuals to invest in start-ups creation. As shown (...)

The Global Entrepreneurship Monitor (GEM) project began in 1999 and is a unique research project which annually measures entrepreneurial activity in many countries. The project also aims to study the relationship between entrepreneurship and economic growth. Fifty-nine countries participated in the GEM twelfth edition in 2010. The Kauffman Foundation, the Babson College , USA, and the London Business School are one of the three main founders of the GEM project.
This project aims to (...)

Companies created by necessity and companies created by opportunity
In order to create a company, you need cash to allow the company to survive at least for the sales to balance the expenditures.
That is why most of the companies are created without employee, with minimum fixed costs. But they create few or no jobs, managing, but not all, to feed their creator. Following a categorization given by the Global Entrepreneurship Monitor (GEM), one has to distinguish companies created by (...)