Alliance of family businesses and impact pioneers: the key to France's industrial renaissance?

The strengths of family-run businesses are well known: entrepreneurial DNA, local roots, a web of trusted relationships, tangible and intangible capital...

Combined with the experience of patient business development and a long-term vision, they make them an obvious partner for the new generation of impact entrepreneurs.

The proof is in N Zero's story. (Opinion piece originally published in the Family Stories special issue and on the Décideurs Magazine website. Décideurs Magazine).

Once upon a time, there was an innovative young company called 'N Zero', whose mission it was to develop a large-scale decarbonization technology.

Founders Claire and Leila, recent engineering graduates, have just filed three patents.

Here they are, looking for funds to develop their business.

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Funding real impact innovation: a long-term gamble

An initial series of meetings with investors left them disappointed:

"your technology is too risky , you don't make enough sales, you don't have enough experience... that's what all the funds told us", the two young partners recall.

Yet Claire and Leila are firmly convinced of the potential impact of their innovation.

But their project requires time and substantial investments to have any chance of success.

Their timing is not compatible with the exit requirements of most venture capital funds.

Just as they were beginning to lose hope, an entrepreneur friend told them about a new fund with permanent capital that invests in impact companies at the seed stage: "It's an evergreen fund, which means it has no pre-established exit date and allows entrepreneurs to plan for the long term", he explained.

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The power of the collective: supporting first-time impact entrepreneurs and derisking their investment

Claire and Leila present their vision to the fund's partners, who, after thorough due diligence, decide to invest.

The two young entrepreneurs can look forward to the next two years with confidence. A lead investor in the first seed round, this VC has the unique feature of bringing together 50 individual investors in a single investment vehicle known as an SPV.

These 50 personalities, chosen for their specific and proven skills, are a springboard for N Zero: "We saved an incredible amount of time thanks to them," recalls Claire.

As years go by, N Zero takes off: the number of contracts grows, the team expands, and fundraising keeps pace with the company's growth. N Zero is now an 'Entreprise à Mission' and a B Corp.

The Evergreen VC, still a long-term core shareholder, also ensures that new funds are aligned with N Zero's mission.

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Evergreen funds and family businesses: long-term core shareholders

Each fundraising is also a liquidity event, allowing certain individual investors in the SPV structured by the evergreen fund to exit as they go along, and others to enter.

The €10 million Series generates a fundamental change in the SPV's capitalization table, but N Zero sticks with the same lead investor.

This capital increase is led by the family office of the Roche-Dubois family industrial company. A year earlier, the new generation of managers had decided to make a strategic shift, putting their regional roots, industrial know-how and patient business development experience at the service of fast-growing industrial start-ups.

"It was at this point that our historic investors, who had helped us find our first customers, began to sell their shares, with an already impressive return multiple. The arrival of the Roche-Dubois family allowed us to secure the equity financing we needed in our pre-industrialization phase," explains Claire.

Here we are ten years later, and Claire and Leila are at the helm of a thriving company with 600 employees, recognized for its many positive impacts and with the highest Net Promoter Score in its category.

With the support of their historic investor, they decided to join forces with the European leader in their industry to increase the impact of their technology tenfold.

Claire sums up the conclusion of the N Zero adventure as follows:

"We've had other takeover opportunities before, but it wasn't the right time or the right deal. I'm glad we were able to wait, because everyone's happy now: the team, as it's a really human project, the investors, who are making a great exit, and our innovation, which is in good hands."

As you can see, the story of N Zero, while fictional, could be the story of many new impact industrial companies.

This is the story of two founders who were given enough time to maximize the impact of their company.

It's the story of a community of entrepreneur-investors who pitched in to help two first-time entrepreneurs find their market.

This is the story of a family business that understood the strategic value of joining forces with a young, high-impact company.

It's a story that could be told many times over if more French funds were to take up the evergreen challenge, and if more family businesses take the bold step placing their assets at the service of new impact players, so as to pass on not only a heritage, but also an inhabitable planet, to future generations of the family.

To realize their full potential, impact start-ups will need the patient capital and experience of the managing families of France's finest SMEs, who can accelerate their innovation process thanks to these new players.

What if this alliance of family businesses and impact pioneers heralded France's industrial renaissance?

(Article published in the Décideurs Magazine paper edition ahead of the https://www.family-stories.fr/ event, where Asterion will be speaking)

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