Bootstrapping sucks. That’s just a fact. It’s the reason startups dream of venture funding, and it’s 9 out of 10 reasons most people don’t start companies.This is why so much of the innovation in the venture capital industry has come in the early stages – startups are often willing to give up more in the long-term in order to have liquidity in the short-term. This is why accelerators have become huge – they are willing to invest the €20K-€60K in order to keep the founders fed and the servers running. For the past ten years, Scientipole has been doing the same thing, but without taking a chunk of your company in exchange. Since 2002, Scientipole Initiatve, funded by the Ile-de-France (the region which includes Paris, its suburbs, and the countryside around it) has been providing personal loans of between €20K-€60K in order to help them develop commercially and hire.
“Startups are risky. We want to see entrepreneurs who are willing to take risks”
So you’re asking yourself: “Yeah, so what? How will a personal loan change the financial structure?” You see, the secret ingredient lies in Scientipole’s reputation and network. With startups like CoVoiturage, Stupeflix, AllMyApps, among their list of startups, they have developed a reputation for accepting great startups. With over 500 applications in the past year and a selection rate of about 20%, acceptance into Scientipole is the first mark of approval in the investment ecosystem, the first step on the ladder.
With this reputation, Scientipole has built a relationship with OSEO, the startup grant-giving financial institution we talked about earlier this year, so that, when a startup wants to get €150K in grant money from OSEO, OSEO will specifically check to see if they’ve already been approved by Scientipole. The next step is, of course, angel and VC funding, and angels and VCs love to see a company with so much capital already injected into the company. In fact, one of the things that makes Scientipole so amazing is that it provides actual capital into a company – once startups receive the loan, that money does not count as grant money, like at OSEO, but can be declared as capital invested into the company by the founders.
Engage Phase #2
This past march, while Scientipole celebrated it’s ten-year anniversary with more than 500 people at the Hotel de Ville in Paris, they announced the kickoff of Scientipole Croissance, or “Scientipole Growth.” The association has grown such a large network (532 startups and counting) that it now is looking to harness that network of accomplished entrepreneurs (over 90% of the startups are still active today), in order to help the next generation of startups to succeed. Scientipole Croissance consists of three sets of services for accepted startups.
Their first tier, animation, consists of a six-month program of workshops, not unlike Founders Institute, which includes access to a private social network of Scientipole startups, a roadshow to visit their corporate partners (e.g: AXA, Bouygues Telecom, Credit Agricole, etc.), and networking events. In addition, they will provide business development services in the form of subsidized consulting services in the areas of sales, marketing, and more. Lastly, a hiring service will put startups in contact with experienced professionals in the areas of HR, finance, etc. as they begin to grow the structure of their company.
In a survey taken of their startups over the past 10 years, Scientipole found that it took, on average, five years for the companies to reach an annual revenue of at least €1,000,000 – this new program hopes reduce that the time it takes to just three years.
How to get on board this gold mine:
Scientipole injected more than 4 million euros last year into a total of 100 startups, and they’re looking to help 120 this year. In order to be eligible for their loan, you must be based in the Ile-de-France region, be less than three years old, be innovative, be at then end of the R&D phase (or at least at the point where you can begin to commercialize your product), and must have the potential to employ people in the near future.
Scientipole is creating a ‘brand’ beyond being a loan-providing association. Their internal network is very grateful to Scientipole, as they are the first to say ‘yes’ to their idea, and so are always willing to give back. As this network begins to grow, it will no doubt become an integral part of the startup lifecycle.