French Fund Taps Tax Cut For Angel Investors

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Partech International, one of the big VC funds in France, has announced the creation of a fund that will raise money from individual accredited investors to invest in early stage startups.

The fund is based on a 2007 French tax break that allows people who pay the ISF, or wealth tax (yes, there is a wealth tax), to invest their money into small businesses and get 75% off. Partech’s most well-known investment is Dailymotion, the biggest video site after YouTube.

Even though the tax break was meant for innovative businesses, most of the money has gone to traditional businesses, mostly because of clever tax accountants and lawyers, but also because a lot of rich people don’t have the time and/or the expertise to become serious angel investors. Several funds have tried to tap into this by collecting rich people’s money and doing investments for them, but most of the efforts so far have been of limited scale and importance.

Given that Partech is one of the premier French VC funds, this gives new scale and visibility to the idea, and should increase the amount and intelligence of early stage money in France.

This news is part of a much larger trend that increases the amount and quality of early stage money in France, with the launch of entrepreneur-friendly superangel fund ISAI, a global seed-stage fund including France’s biggest tech entrepreneur, and other very good early stage investors.

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