By admin 
Small and Medium Enterprises (SMEs) are at the heart of the French economy and employ half of the employees in the private sector according to INSEE. In France, investing in an unlisted SME is popular! In 2020, 23.1 billion euros were invested in French SMEs (source: France Invest ). The government wants to support this growth by encouraging individuals to invest in French companies. Do you also want to contribute to the development of the national economy and participate in the dynamism of these unlisted companies? As you can see, investing in a carefully selected SME is a win-win bet!
While investing in an unlisted company presents specific risks, investing in an SME or start-up remains an excellent means of diversification.
Not being an expert in the field does not prevent many novice investors from getting started via brokers, management companies or online platforms. Because the return possibilities are there: 6 to 8% of the invested capital at least if you leave your money blocked at least in the medium term. The tax advantages are not left behind either. So how do you invest well in a company and why? Where to get started and what should you avoid? What are the rules to know before investing in SMEs? Discover the answers to all your questions and many more tips in our complete 2024 guide.
How to invest in a business?
Investing in a company in France means deciding to invest your money to encourage SMEs in their development and to make substantial gains from it. It is therefore an action that is not insignificant and which also presents the risk of losing the capital that you will have initially invested! It is therefore advisable to first know how investing in a company works. Because there are several types of investment in a company: via the purchase of securities on the stock market if the company is listed, by participating in a Risky Mutual Fund for unlisted companies, through participatory financing or “crowdfunding”.
What is the desired objective?
It is important to know that there are as many objectives sought as there are investments made. But some objectives converge or are identical: wanting to support SMEs in your country/region, wanting to make a long-term investment, optimizing your taxes, or having an aversion to market finance.
Still, before thinking about investing in a company, you need to know why you want to invest. From this first question will arise a chain of answers:
Investing in a company is not just about supporting it. It is about hoping for a return on investment (symbolized by the famous acronym ROI). To do this, you must find out about the project you are financing: its core business, its market, its short, medium or long-term prospects, its economic model, its accounting and forecast budget, etc.
This need is also reciprocal, both for the entrepreneur and the investor. Indeed, the entrepreneur needs funds to run his business, invest, and develop. He therefore needs to be persuasive with potential investors, and to do this, provide them with guarantees of profitability and market share. The figures must be precise, on both sides: