How can you finance your growth by raising venture capital through a  professional investor? We report on the breakfast-debate organised in partnership between EDHEC and the prestigious law firm, Orrick Rambaud Martel, on June 23. The meeting gave invaluable insights into the process of raising capital, in other words, opening your capital to an outside investor.
The conference was led by a panel of experts:

• Guillaume Richard (1996), CEO, O2 – (care services agency)
• Eric Félix-Faure (1995), Associate Director, Aélios Finance - (venture capital consultants)
• Charles-Henry Tranié (1995), Associate Director, Jaïna Capital (investment funds)
• Fabrice Patrizio, Barrister, Associate, Orrick Rambaud Martel agency
• Antoine Vergnat (1996), Barrister, Orrick Rambaud Martel agency

The highly complementary panel of speakers offered the hundred or so participants clear insights into the challenges involved in raising capital, looking at the process from a number of angles:

• First, from the point of view of entrepreneurs who often hesitate before taking the plunge, caught up between wanting to expand their business and fear of losing operational control. What are the advantages of bringing in outside capital to finance growth? What’s the best timing? 
• Second, what are the key criteria for investment funds when choosing a project? Where should they draw the line between risk-taking and trust in the firm’s business model?
• Finally, legal and tax advice is a crucial element for a well-drawn up and watertight contract. Which is the best structure for you? Which form of governance should you adopt? What exit conditions need to be included in the contract should one of the partners wish to sell off their share?

The lively debate also helped to dispel many preconceived ideas: “it’s not because you no longer have a majority share in the firm that you can’t retain control of your business,” one speaker reminded the audience. “Make sure you have  specialist advice when drawing up the contract,” Antoine Vergnat added. “This is important, especially when things aren’t going well. But above all, don’t forget that raising capital is a great springboard for all entrepreneurs who want to step up their growth . And today, the market is on their side: many funds now have the cash but can’t find the right projects to invest in. So go for it!”
The EDHEC of the Year prize for entrepreneurship will be the focus of the next Edhec entrepreneurs meeting. Get ready to vote!

Article by Sophie Baqué (2004)
rnd.sbaque@gmail.com