The Truth About Startup Funding in France: An Interview with Funding Expert Pascal Mercier

Date Updated: Friday, October 5, 2018

The Microsoft Ventures Paris Accelerator has been working with funding expert Pascal Mercier to help startups raise capital. Many of the startups to come out of the French accelerator have secured funding, including Azalead, which announced a €2 million round just a few months ago. We caught up with Pascal to get his opinion on the funding landscape in France as well as some advice for startups seeking to approach investors.

Hi Pascal, you’ve been helping startups raise money with investors in France for quite some time and the French investor community really thinks highly of you. But for people who don’t know you as well, can you tell us a bit about your experience? How did you first get into the business and what are some of the most exciting deals you’ve worked on?

I got into this business in the late 1990s by accident. I wanted to raise money for a project and noticed that the market structure was a bit unfair: VCs had lots of experience from dozens of deals, whereas entrepreneurs with little or no experience were struggling to raise capital. I first joined a company that specialized in fundraising before launching my own company, Ader Finance, about 12 years ago.

We have now more than 120 successful deals on the meter and it’s hard to say which deals were the most exciting. I like to think that the most exciting deal will be our next deal!

Foreigners especially have a lot of negative opinions about funding raising in France. Do you think it’s really that difficult to raise in France compared to other markets?

Foreigners that have negative opinions are those who do not know the French market very well. Top tier VCs—such as Index Ventures, Accel Partners, Summit or Balderton—are investing massively in French startups, and I would say that raising in France is “reasonably” difficult. In other words, when it’s easy to raise you most likely have a bubble problem…

The French ecosystem and funding landscape has changed a lot since you first entered the business. What are some of the biggest changes you’ve witnessed?

The ecosystem has changed a lot and is changing every day for the better. We now have very experienced VCs with the experience of large exits; we have fantastic entrepreneurs and the world is their playground; we have fantastic engineers and tax incentives that allow us to have highly competitive R&D costs. France is definitely on the unicorn map.

What advice do you have for young startups looking to secure a seed round or a series A round, especially in Europe or France? What do they usually overlook?

For a seed round: you need a vision, a product, a team and a network. Do not forget the network or there will be no round…

For a seed round: you need a vision, a product, a team and a network. Do not forget the network or there will be no round…

A series A round is not a post seed round. Entrepreneurs have to have KPIs before launching a series A round, and my advice is to work with a fundraiser, of course :-)

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Are you ready to take your startup to the next level? Applications for the Microsoft Ventures Paris Accelerator close on Friday, June 19. Apply now!

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