FRANCE Law and Practice Contributed by: Bertrand Barrier, Anne Toupenay-Schueller and Cyril Deniaud, Jeantet
opment of its natural language-based code generation technology. Investment is generally made through the fund acquir- ing a stake in the company’s capital after reviewing the company and its business plan. The investment fund then subscribes to common or preferred shares and may also grant shareholder loans. Relations between the founder and investor are governed by a sharehold- ers’ agreement. 2.4 Venture Capital France boasts an extensive investment fund land- scape, comprising predominantly French, European and American funds. The ecosystem includes over 450 venture capital funds operating across distinct market segments, including infrastructure, French tech, impact investing, family offices, and business angel networks. This diverse funding environment provides start-ups with access to specialised investors who bring not only capital but also sector-specific expertise and networks. The segmentation allows entrepreneurs to target investors whose investment and strategic focus align closely with their business model and growth objectives, while investors can concentrate their resources and knowledge within their areas of specialisation. In addition to traditional investors, the French pub- lic investment bank (known as Bpifrance) is a major player in the financing of start-ups in France. In the innovation and development capital segments, Bpi- france acts as a direct, minority, active and long-term investor through equity or quasi-equity investments. The company is thus accompanied and supported in its growth. 2.5 Venture Capital Documentation France does not have standardised contractual or corporate documentation at the national or regional level. However, standard market practices are widespread and regularly used in venture capital and private equity transactions. The venture capital legal market is con- centrated among a small number of highly specialised
corporate law firms. These firms handle a substantial proportion of investment transactions, enabling them to establish standardised market practices regarding transactional documentation, and thereby reducing negotiation friction and transaction costs. 2.6 Change of Corporate Form or Migration As indicated elsewhere in this section, a simplified joint stock company (SAS) enjoys considerable free- dom in its internal organisation. Thus, when there is a desire or a need to modify the internal organisation of the company, the articles of association are gen- erally amended or redrafted, without any change in corporate form. For example, the entry of a financial investor may involve the establishment of a board of directors of which that investor will be a member. In such cases, upon completion of the investment, the articles of association are generally amended in depth in order to rewrite the internal governance rules and adapt them to the desired situation. 3. Initial Public Offering (IPO) as a Liquidity Event 3.1 IPO v Sale When investors in a start-up are looking for a liquidity event, they would be more likely to expect a sale pro- cess of the start-up rather than taking the company public and listing it on a securities exchange. The number of IPOs has declined somewhat in France, due in particular to greater selectivity on the part of investors and a geopolitical and commercial environ- ment that is not conducive to this type of transaction. 3.2 Choice of Listing In the event that a French company decides to launch an initial public offering, it would be more likely to pur- sue a listing on a French stock exchange than a for- eign exchange. A listing on Euronext Paris presents distinct strategic advantages, including enhanced market credibility within France, improved access to domestic inves- tors who are comfortably familiar with the company’s brand and operations, streamlined compliance with
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