As the story begins to wrap up, much like the eve of an election night in the US, pundits are racing to declare the #geonpi movement a success. Having managed to get a meeting yesterday afternoon with two French ministers, entrepreneurs and investors spoke their peace about the adverse impact that the proposed law changes would have on the startup ecosystem. While supporters of the proposed law changes tried to fight back against the onset, they underestimated one thing – the same thing that French telecom providers underestimated when Free Mobile launched this year – vitality.
While movement creators would love to claim excellent PR skills, or admit to some of the ridiculous accusations (conspiracy, PR stunt, etc.), the reality of the movement is nothing more than passionate entrepreneurs and web lovers in France and abroad coming together spontaneously to say “we too want to be able to build great companies.”
Many news outlets will tell the story about how a few entrepreneurs and investors created a movement that hit international headlines in less than 5 days, I’d like to tell a story that others may not deem important.
Finally, 50,000 Pigeons do something good in Paris.
This week, French entrepreneurs threw their weight around. They said “we are here, and the ‘anti-rich’ president cannot ignore us.” More importantly, France opened its eyes to see that CEOs of major corporations and founders are not the same people – a distinction that socialist media/politicians often neglect.
In addition, this is a message to the rest of the world that France has entrepreneurs – we are the 2nd largest venture market in Europe behind the UK, and we will continue to grow great companies, and our innovation will not be inhibited by government agendas. We did not protest (though we threatened to), we did not block the roads or shut down transportation, we do not have a union – we only have our united passion for creating great things.
France Digitale, an association of entrepreneurs and investors whose members advise the government on related policy, is owed a large debt of gratitude. When everyone else was taking to twitter, they were drafting up amendments to the proposed laws, in order to have reasonable alternative solutions to present to the ministers.
On Thursday afternoon, among a limited group of entrepreneurs and investors invited to speak their peace about the proposed laws was Henri Verdier, chairman of the board of Cap Digitale and founder of MFG R&D. He posted a great post[FR] Thursday night about what went on at the meeting, detailing the proposed changes by Pierre Moscovici, Minister of Finance in France. These have not yet been written into the law proposal for 2013, but are likely to be announced officially in the coming week:
- The capital gain’s tax will stay at 19%(+~15,5% I believe for a separate tax) as it is now for companies entrepreneurs who keep their company for 5 years or more
- Money gained from selling off your company that is reinvested into other startups will be almost entirely untaxed, as with entrepreneurs who sell their company & go into retirement
- Carried Interest for investors will not be taxed as a salary, as was previously proposed.
There are still things that are unfortunately, but necessary, in Hollande’s proposals – but, for now, things have diminished incredibly from the potential harm they could have caused. On the same Friday that entrepreneurs discovered the initial rise in capital gain’s tax, we were also told that many of the tax exemption statuses in France that make creating a startup so much easier – JEI, CIR, etc. – have been preserved as well as reinforced. Added to these amendments above, I think things will carry on as normal – that is to say, innovation will continue to grow.
There’s a lot more work to be done by entrepreneurs, both In their startups and in France – but this week marked a change in perception of France – we are no longer a country that is anti-business, we are a strong socialist country that is just beginning to realize how essential small business is to our growth and existence as a global power.