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Raising funds at the seed stage of a startup

On the impact stage of Startup SAFARI Virtual Experience, we welcomed Gaspard Lefèvre, head of the Incubation program at La Ruche. He spoke to us about the problem of raising seed funding for Impact projects, i.e. projects with a social impact.

In his presentation Gaspard showed 3 types of financing or fundraising, by grants, debt and by increasing equity. We will summarize everything he said. You also have at the end of the article the link to the video of his presentation.

There will be specific vocabulary. A glossary is at your disposal at the bottom of the article 🙂

Les types de levées de fonds

The grant

A grant is funding without compensation. It can be public or private. This financing is not dilutive (no opening of capital). The amounts and conditions vary from one structure to another. Moreover the constitution of the file is time-consuming, but one can be accompanied. This is exactly what The Hive does. Here’s how to get this funding, who to contact and when to do it.

Who should I contact for a grant?

Les deux types de subventions

There are 2 types of subsidies. The private and the public ones.

Public subsidies come mostly from BPI France, the Public Investment Bank, which financially supports innovative startups throughout France. It does so through a grant, La Bourse French Tech. It amounts to 30 000€ to finance innovation. However, the most important condition of access is to have equity to be able to co-finance the project. You can see the other conditions on La French Tech website. There are subsidies in the different territorial authorities like Les Trophées de l’ESS of the city of Paris. It finances projects that deal with social, societal or environmental issues. Public grants are diverse and varied. Get in touch with your public contacts (regions, departments or municipalities).

For private financing, there are many companies that grant them. This is part of their CSR approach. It is through the foundations of these companies that social and societal impact projects are financed. The amounts vary from a few thousand euros to hundreds of thousands of euros. Foundations such as the Google Impact Challenge or Aviva are very popular in this field. They are often specialized and support clearly defined causes. Foundations that support women, such as the Chanel Foundation or the FAMAE Foundation, which are aimed at companies with an environmental impact.

Find all the foundations in the directory of Centre Français des Fonds et des FondationsIt’s very practical!

You probably won’t get the grants because there is a lot of competition. It’s free money so there’s a lot of traffic on that road. But Gaspard advises you to keep the contacts you will have in these foundations. They will explain to you why you were not selected and you can always apply again for some of the foundations.

How to get grants ?

Comment avoir des subventions

To get a grant, you will normally start with a research phase. Think about common law financing. These are sectorial policies in force on a given territory (Regions, Departments, Intercommunities, Municipalities). Check regularly the calls for projects on Makesense Spot or on Appel à projets Carenews. The last piece of advice is to regularly contact the funders to keep them informed of the progress of your project and the impact it is having.

Then make sure you understand what the funders want from you. To get the grant, make sure the project is to their liking. So talk to them, go to their website or contact previous winners. This will avoid wasting time responding to their call for proposals, only to have your application rejected.

The hardest part is writing your application. Present the application as clearly as possible. You need to demonstrate to funders that you understand the need of your market and that you know how to meet it. They want to see a concrete solution. Don’t think of taking elements of answers already used in other calls for proposals. Instead, tell your story and simply answer the questions. Also show that you are flexible. They need to see alternative plans as the market changes. Let them know that you are not fixated on a single idea, but on a project as a whole.

The funder’s expectations

Les attentes des financeurs

Show what and who you are making an impact on. You will not be able to measure it as you are just starting your activity. Qualify this impact or imagine it using the need observed in the market. The need is the key.

Additionality is showing that your impact solution addresses a need or part of a need. For example, if your project is educational, you should demonstrate which part of the education issue you are addressing or which population. Additionality is showing that your solution is complementary to what already exists on the market.

Measurability is about proving your ability to measure your impact. Funders want to know the impact of your solution so they know how their funding will further leverage that impact.

Through your project, they want to communicate their commitment. Give them the opportunity to mobilize their employees and to communicate on their commitment to you.

Finally, the expectations of the funder are to have a clear project by defining indicators of evolution and evaluation of your project. Be square!


Levée de fonds en fonds propres

Equity fundraising is the act of opening one’s capital to investors. Unlike a grant, it is mainly to finance operations. These are for example purchases of stocks, marketing expenses, research and development or application development. They are done with private investors. This means that the investors will take part in your capital and will expect a part of the company’s profits. You lose a part of the control of your company according to the shares of the investors. So for this financing, you have to ask yourself the right questions : 

  • Why do I want to raise funds?
  • What issues do I need to raise money for?

Before going out and getting the funding, you have to show that you have a place in the market and that you are capable of getting clients. So first, you have to go out and find customers, demonstrate your ability to attract and generate impact and then raise the funds. You have to raise funds for the right reasons, that is, to accelerate. First, focus on your first funder, which is the customer.

Who should you contact to open your capital?

Equity investorsThere are different steps to raise equity capital. Entrepreneurs often start with Friends & Family —-> then Business Angels —-> to finish with Institutional Investors. Friends & Family are your friends and family who you can ask to participate in the capital. They are the easiest to reach.

Business Angels are individual investors and most often former entrepreneurs. They are individuals who act on their own behalf and who want to invest in high-growth or start-up companies. You can find them in investor clubs such as Les Cigales, Garrigue, ANGELSQUARE, ClUB INVEST IDF, or on participative financing platforms that mobilize citizens’ savings to finance your projects in equity. Take a look at LITA and WEDOGOOD.

For these investors, it is essential to understand that they are people like you and me. Compared to institutional investors, you can therefore convince them more easily on targets of commitments or according to their financing issues. Link up with Business Angels who know your sector, because they bring to your company skills, resources or a network. Since they take part in the capital, you will have to report to them and consult them for strategic decisions. They are close to the entrepreneurs and play a mentoring role.

For institutional investors, there are different kinds. Inco, Phitrust, Citizen Capital and Investir et plus, invest in series A and series B phases, that is to say a third or fourth round. But there are players who come in early, from the beginning of the creation of your company. They intervene in Seed or Pre-Seed. This is the case of France Active and Alliance for Impact, which is an acceleration program coupled with an impact seed fund and partner of La Ruche. With this program, La Ruche can raise seed funding ranging from €300,000 to €1,000,000.

Comment ouvrir son capital ?

How to open your capital

As a first step, you must prepare documents bringing together the essential information for investors to understand your project. These documents are called “the Deck”. They must answer the following questions :

  • Who is leading the project ?  
  • What have you already achieved? 
  • What will you achieve with fundraising ? 
  • How much do you plan to raise ?

To this, you will add your past accounts, the Excel forecast, the financing plans and the cash flow statement. With all these documents and a well-defined upstream strategy, it will then be necessary to target the right investors, to save you time. This is a point on which La Ruche supports entrepreneurs. Make their sign!

When an investor receives you, he will go further with the Investor Due-Dil. It is a survey that he will carry out to go into the details of what makes up your company, at the level of HR, legal, accounting and commercial. The length of this survey depends on the investor or the size of the amount you are raising. It is this survey that will reassure the investor so you have to prepare and put yourself in your best light. 

Having an investor is building a long-term relationship. So don’t be too aggressive when negotiating. However, do not hesitate to put investors in competition. The same goes for bankers and all financial partners. Contact several to keep the choice on your side.

And finally, make Smart Money. It is the fact of choosing investors who are in your sector and who will be able to bring network, specific skills or knowledge about the sector. Challenge investment funds, also putting them in competition to make the best choice. But don’t expect a follow-up as close as that of the Business Angels.

The expectations of funders

The expectations of funders

You have to prove the scalability of the project. Demonstrate that the project will grow in the future. To do so, it will be necessary to present an ambitious and operational BP (Business Plan).

Show that the return on investment is in line with your investment thesis or the way you plan to invest. For this, you will have to simulate the IRR (rate of return on investment) of the investor. This will let him know when he will start making money.

Investors care about a competent team. So recruit the right profiles to attract them. Internalize the technology. It’s more reassuring than calling on service providers all the time. This is a very important point !!

You also need to have economic fundamentals to present a good business plan. And finally, cultivate a relationship of trust, partnership and transparent with the funder.


La dette est un type de financement qui ne nécessite pas l’ouverture de votre capital. Elle sert souvent à financer des investissements comme la R&D (Recherche et développent), travaux d’aménagement ou d’achats de matériels couteux. Il faudrait se rapprocher des partenaires bancaires à Impact.

Quel partenaire bancaires choisir ?

Debt is a type of financing that does not require opening your capital. It is often used to finance investments such as R&D (Research and Development), development work or the purchase of expensive equipment. We should get closer to Impact’s banking partners.

For personal loans, you have actors such as France Active, Initiative France, Réseau Entreprendre or Raise Sherpas.

Regarding business loans, you can choose, La Nef, France Active, BPI France, Groupe Crédit Coopératif and BNP Parisbas. These banks are interesting because they are committed to impact and some of them have bank advisers trained to understand new businesses with innovative business models.

How to get debt ?

As usual, you must present documents that show the financial state of your business, so your past accounts, Excel forecasts, etc…

Once you’ve met the lender, take an honor loan first. This will give you a guarantee for other bank loans. Then, you will have to put yourself in the lender’s shoes to understand on what points he needs to be reassured. Indeed, as a lender, he will like to be sure that you will be able to repay. So present him your business strategy, super mega reassuring and relevant.

During the negotiation, do not hesitate to put the lenders in competition. Of course, you are aware of the balance of power between you and the bank. You are not the best at negotiating. That’s why don’t go out and do loans or fundraising when you’re strapped for cash. You will be even more in bad shape and increase your chances of refusal. Anticipate this. Borrow, raise funds before you are in the red zone. Loaning or fundraising shouldn’t be a lifeline, but rather gasoline that will propel you further.


We are finally at the end of this article. Thank you for following up to this point and I hope you learned as much as I did by transcribing Gaspard’s presentation. She is rich in advice and the best advice I could give you is to have an incubator accompany you. Your project may have specific characteristics. You will need a guide. La Ruche will be delighted to welcome you, for a fundraising journey as sweet as honey!

Here is the video link of Gaspard’s presentation.

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