Startups are a dream come true for individuals and private investors wishing to diversify their investments and support the local economy. Active or passive, investors have a deep impact on the life and success of companies, most often led by young entrepreneurs. We had the privilege to discuss with Claire Munck, CEO of the Belgian business angels network BeAngels to understand the mechanisms offered to investors and tried to draw a portrait of women entrepreneurs and women investors.
Photo: Led by Claire Munck, BeAngels currently have 370 investors of which 15% are women / Credits © BeAngels
Claire Munck was one of the keynote guests at the 5th edition of the Women Founders conference organized by the WIDE association, in partnership with Silicon Luxembourg.
Can you tell us more about the BeAngels network? What services do you offer to entrepreneurs and investors?
BeAngels is a network of Belgian business angels created about 20 years ago. Our historical job is to connect entrepreneurs looking for financing with private investors a.k.a business angels. We are quite open to different sectors of activity. Apart from the real estate and the horeca we look at all types of files, whether they are in a startup phase or in a growth phase. Entrepreneurs come to us for a first round of financing at around 250000 euros. This round is generally completed by a subsidy, a bank leverage or a public investment called Invest.
The files we deal with are mainly Belgian, but we also receive files from Luxembourg – Yotako or Passbolt to name a few. These startups have benefited from direct investments from our members. We also have a few files from the north of France as we work closely with accelerators and incubators based in Lille in particular.
The members of our network wish, as much as possible, to invest in the local ecosystem and accompany the entrepreneurs in their local area. This is the real role of the business angel to be honest. Proximity makes support easier, especially for nascent projects with young startup teams.
The uniqueness of BeAngels is that beyond this traditional role of putting entrepreneurs and investors in touch with each other, we have become over the years much more than a network. We now offer a service platform dedicated to private investors who want to make unlisted investments.
“Eight years ago, BeAngels created a Women Business Angels Club which is fully integrated in our activities.”
What investment formulas do you offer to business angels?
Private investors currently have five formulas at their disposal.
The first – historical – is the membership to the BeAngels network and access to the startups’ deals. The business angels can then make their own investment decisions and play an active role alongside the entrepreneurs.
The second option is more for people who start as business angels and are not familiar with investing in startups. We then teach them to invest in groups. A maximum of 20 people per group are coached by experienced business angels. We have created a tailor-made training cycle during which eight business angels share their experiences on eight different topics. Then we propose to the new business angels to make three investments during the year. The commitment that we ask them at the beginning of the year to be part of a group is 15000 euros.
The third formula is more “passive”, in quotation marks. From 10000 euros we suggest to the business angels to be part of a SIBA, i.e. a Business Angels Investment Company. We have two types of SIBA. The first one is a group of investors. The new comers will co-invest with active investors in startups where the investment tranches range from 10,000 to 50,000 euros. We create for them an investment portfolio of six to eight companies. The second is a SIBA for student-entrepreneurs. We work with five incubators in Belgium for this purpose. Coaches identify students who are ready to create their companies and members of our network put money into these student-driven companies.
The fourth formula is closer to private equity and investment funds. We are here in a post-business angels and pre-venture capital phase. Funds enter the capital of companies that have been financed either by our members or by co-investors. These companies already have commercial traction and are in their acceleration phase. Business angels can participate financially in these funds managed by a dedicated team. Final decisions are made by an investment committee.
Finally, the fifth formula will be unveiled in a few days and you will be able to discover it in these columns.
With this range of formulas the business angels have the possibility to be active or passive in startups or scale-ups and can choose the ones that suit them best. The same goes for entrepreneurs who come to BeAngels for financing. They know that several stages of financing are possible for their projects.
How many investors does the BeAngels network have? What is the profile of women investors?
We currently have 370 investors of which 15% are women.
Drawing a portrait of an investor, whether male or female, is not easy because they are private individuals who invest a small part of their assets. However, we note that the breakdown is quite similar to that of men, i.e. some of the women have a profile as managers in large groups, banks or law firms. The other part is rather composed of women entrepreneurs.
What they are looking for when they join BeAngels is to give meaning to their savings! What they are interested in is helping the startup world, the business world and the real economy. What matters to them is the impact of their investment and the company they support. What interests them is the possibility to accompany and do more than mentoring. Becoming a business angel is an extension of an experience that one has generally had as a mentor. By helping startups, mentors often realize at the time of fundraising that they would like to financially support the projects they accompany. This opportunity to accompany and bring real added value is very dear to women business angels.
Eight years ago, BeAngels created a Women Business Angels Club which is fully integrated in our activities. In the beginning we were really the stereotype of the investment club with very few women. The conclusion was clear: when there are very few women, they don’t invest! We decided to be proactive in recruiting more women and to have as much diversity as possible so that this also benefits the entrepreneurs. When an entrepreneur reaches the BeAngels network out, he/she must be able to find people who understand his/her market, his/her business model and who can bring a transversal or sectorial expertise.
Women investors are investors like any other. They want to invest in good entrepreneurs. And, it’s the cream on the top when it makes them happy to be able to invest in projects led by women.
“The Tax Shelter for startups allows private investors to deduct up to 45% of what they invest in startups – within the limit of 100,000 euros invested per year – from their taxes.”
Tell us about project holders and women entrepreneurs as well.
More women are submitting their projects to the BeAngels network. Over the past few years, a lot of efforts have been made to address issues related to female entrepreneurship, be it the communication made by incubators or co-working spaces to ensure that women feel concerned by the messages, the creation of support structures dedicated to women entrepreneurs or the emergence of networking clubs.
The number of women CEOs and co-founders we have financed is well above average and statistics. 25% of the projects financed in the last two years were carried out by women, and this in fields as varied as STEM, tech, beautytech, etc. If I take the example of the startup Bonjour Maurice, they are two co-founders who have founded a new brand with ranges of clothing inspired by the Montessori spirit, reversible, to help children adapt and evolve independently. It’s a real success story.
The principle of “syndication” and group investment is a strong argument for attracting private investors…
Indeed, business angels are seduced by the different levers we offer. When they want to invest, our role at BeAngels is to find co-investors or groups of co-investors. Within these groups we can also find one or two groups of investors. This is one of the reasons why private investors come to BeAngels. They want to be able to meet people who invest in startups, who share the same mindset and with whom they will be able to co-invest depending on the case and the sharing of skills.
… the Tax Shelter is available for startups too?
Absolutely. First of all, historically there is no capital gains tax for private investors in Belgium. Since 2015, there is a tax mechanism called the Tax Shelter for startups which allows private investors to deduct up to 45% of what they invest in startups – within the limit of 100,000 euros invested per year – from their taxes – and not from their tax base. This is an incentive that is very important and has contributed to boosting seed stage investments in Belgium. The government’s objective was to widen the funnel of startup creation and allow companies to create jobs, be innovative and make a difference from an economic point of view. The impact five years later is irrefutable!
Women are also now more aware of these tax incentives and the opportunities available to them. They can hear about the scheme through their accountants, fiduciaries or advisors. They most often ask us for information about it and about the deals we bring. Those who only want tax exemption, who do not challenge anything, neither the business plan, nor the valuation are a brake for entrepreneurs. It is precisely to avoid this situation that we have set up our SIBAs. If some of them want to defiscalize, fine. Then, we put them in a pool of investors. The entrepreneur can thus benefit from co-financing and available money without having too many passive shareholders.
Do you have a message for Luxembourg’s business angels?
We are starting to have some investors from Luxembourg in our network. This trend was confirmed during the first confinement when we put all our pitches online. We keep organizing one investment forum per month during which 4 to 5 pre-selected startups present their projects to raise funds. As the events now take place online only instead of in person, we have a few people from Luxembourg and the north of France participating. This also allows us to see how both the Luxembourg and French deals flow. Even if we call ourselves BeAngels we are « open for business » for Luxembourg’s startups and private investors!
Claire Munck will be one of the keynote guests at the 5th edition of the Women Founders conference organized by the WIDE association, in partnership with Silicon Luxembourg. Listen to her testimony and ask her your questions this Thursday from 7:30 pm. Online registration here.
Article originally on Silicon Luxembourg