Barometer 2014 EY (ernst & Young) and France Digital Social and economic performance of french digital startups

1. Social and economic performance of
French digital business start-ups
Barometer 2014

2. Page 2
1. Methodology
2. Executive summary
3. Key figures
3.1 Revenues
3.2 Fund-raising
3.3 Innovation support
3.4 People
3.5 Value-sharing
3.6 Entrepreneur’s profile
4. Contacts

3. Page 3
1. Methodology

4. Page 4 Barometer 2014
1. Methodology
• Barometer based on data from VC-backed digital start-ups
• Survey sent by venture capitalists to their participations
• EY, as a third-party, analyzed data in order to consolidate and guarantee its
confidentiality.
116
5
years
old
€4,8m
2012
&
2013
start-ups Average age Raised since their
creation (median)
Key figures from
financial data

5. Page 5
2. Executive summary

6. Page 6
Hyper growth & Born global
+43% of revenues vs 2012
39% of revenues are generated abroad
in 2013
+ 100% of ROW revenues vs 2012
24% of respondents have a foreign VC
that already invests in the firm
People
+22% of employees in one year
91% of permanent contracts
32 years old is the average age
of employees
68% of employees have from
Bachelor to Master Degree
6% of entrepreneurs are women
Innovation support Value sharing
46% of the sample did not use « Young
Innovative Company » tax incentive
77% use French research and
development Tax Credit (CIR)
French research and development Tax
Credit remains the preferred state
incentive
30% of employees owning equity
instruments
90% of start-ups use equity
instruments
2 is the average ratio between
management and staff salaries
96% never distributed dividends

7. Page 7
3. Key figures

8. Page 8 Barometer 2014
3.1 Revenues
• Total revenues (in €m) • Growth of total revenues (in %)
Analysis by revenue segment
1,598
2,279
0
500
1 000
1 500
2 000
2 500
2012 2013
71%
20%
44%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0 to 5 M€ 5 to 50 M€ + 50 M€

9. Page 9 Barometer 2014
3.1 Revenues
• Worldwide revenues (in %) • Worldwide revenues (in €m)
72%
61%
17%
21%
11%
18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013
1 153
1 398
272
482
173
399
0
500
1 000
1 500
2 000
2 500
2012 2013
France Europe International France Europe International
+ 21%
+ 100%
39%

10. Page 10 Barometer 2014
3.2 Fund-raising
• Average and median of fund raised
(in €m)
Analysis by revenue segment
• International VC
Percentage of foreign venture capitalists
investing in French digital business start-
ups. Analysis achieved by revenue
segment.
5
16
29
2
10
18
0
5
10
15
20
25
30
35
0 to 5 M€ 5 to 50 M€ + 50 M€
Average Median
13%
23%
43%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0 to 5 M€ 5 to 50 M€ + 50 M€

11. Page 11 Barometer 2014
3.3 Innovation support
* Sample of 83 companies created after 2005.
46%
No
54%
Yes
• Did you use the label « Young Innovative
Company » (JEI)?*
23%
No
77%
Yes
• Did you use the French research and
development tax credit (CIR)?**
** Sample of 86 companies having R&D expenses.

12. Page 12 Barometer 2014
3.3 Innovation support
25%
No
75%
Yes
83%
No
17%
Yes
Tax credit for encouraging competitiveness and
jobs (CICE)
Innovation Tax Credit (CII)
• Did you use the new tax credits launched in 2013?

13. Page 13 Barometer 2014
3.3 Innovation support
• Financing Research & Development
(in €m)
• Tax controls in 2013
Percentage of start-ups that had the Tax
administration performing a tax control
during the year*.
18%
24%
0%
5%
10%
15%
20%
25%
2012 2013
* Analysis based on a sample of 108 participants.
25 29
89
123
16
18
0
20
40
60
80
100
120
140
160
2012 2013 2012 2013
Research Tax Credit R&D
InternationalFrance

14. Page 14 Barometer 2014
3.4 People
• People
6 190
7 566
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
2012 2013
1376
jobs
created

15. Page 15 Barometer 2014
91%
3.4 People
4%
3%
1%
Permanent contract ("CDI")
Temporary contract
("CDD" and "Interim")
Professional
training contract
Internship
68%
26%
3%
3%
From Bachelor to
Master Degree
From High
school to
Bachelor
Degree
High school
Degree or less
PhD
• Type of work contracts (2013) • People qualification (2013)

16. Page 16 Barometer 2014
3.4 People
30%
+ €50m
50%
€5m to €50m
20%
0 to €5m
• Distribution of employees by start-ups revenues

17. Page 17 Barometer 2014
3.4 People
• Average age of staff • Ratio Management/Staff wages
42
32
0
5
10
15
20
25
30
35
40
45
Average age
Management
Average age
Employees
0,3
2
6,2
0,4
2
8,1
0
1
2
3
4
5
6
7
8
9
Minimum Average Maximum
2012 2013

18. Page 18 Barometer 2014
3.4 People
89%
Yes
11%
No
• Are you both founder and manager of the company?

19. Page 19 Barometer 2014
3.4 People
54%
No
94%
Men
46%
Yes
6%
Women
• Serial entrepreneur • Gender of Chief Executive Officer

20. Page 20 Barometer 2014
94%
are men
42
years old
46%
are serial
entrepreneurs
92%
have at least a
master degree
3.4 People
• Entrepreneur’s profile

21. Page 21 Barometer 2014
3.5 Value sharing
70%
Loss
30%
Gain
* Sample of 94 start-ups.
• « Earnings before interests and taxes »
or EBIT*
• Percentage of positive « EBIT » by
revenue segment*
12%
45%
71%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0 to 5 M€ 5 to 50 M€ + 50 M€
€

22. Page 22 Barometer 2014
3.5 Value sharing
54% 46%
% of shares held by
owners and employees
% of shares held by
external shareholders
(VC, business angels …)
• Percentage of capital shares held by owners and employees

23. Page 23 Barometer 2014
3.5 Value sharing
90%
Yes
10%
No
* Analysis based on a sample of 101 start-ups.
• Are you using equity instruments to motivate your team?*

24. Page 24 Barometer 2014
3.5 Value sharing
60%
27%
13%
* Analysis based on a sample of 105 start-ups.
Warrants (BSPCE)
Free shares
(actions gratuites)
Stock-options &
common shares (BSA)
• Types of equity instruments*

25. Page 25 Barometer 2014
3.5 Value sharing
* Sample of 99 start-ups.
• Percentage of employees owning equity instruments*
Percentage calculated by doing the ratio between the number of employees owning equity instruments and the total
of employees. First chart presents data globally and the second chart is presented by revenue segment.
28%
30%
27%
27%
28%
28%
29%
29%
30%
30%
31%
2012 2013
34%
24%
16%
0%
5%
10%
15%
20%
25%
30%
35%
40%
0 to 5 M€ 5 to 50 M€ + 50 M€

26. Page 26 Barometer 2014
3.5 Value sharing
96%
No
4%
Yes
• Did you distribute dividends since the creation of the company?

27. Page 27
4. Contacts

28. Page 28
Contacts
Franck Sebag
Partner, EY
VC & IPO Leader France
@frsebag
Xavier Lorphelin
Managing Partner
Serena Capital
@Xlorphelin
About France Digitale
France Digitale bring together the champions of digital
entrepreneurship: start-ups with strong growth plans and potential
investors (venture capitalists and business angels). To build an
alliance between digital entrepreneurs and investors, so that
France becomes fertile ground for the creation of
digital champions of International stature. For more information,
please visit www.francedigitale.org.
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