Paul Midy: "There will be tax reductions of between 30% and 50% for individuals who finance innovation".

Paul Midy: "There will be tax reductions of between 30% and 50% for individuals who finance innovation".

Appointed by the government, Paul Midy MP (Renaissance) is looking at ways of providing better funding for French start-ups, particularly in innovative sectors such as Web3. We spoke to him about this.

The Big Whale: A few weeks ago you published a progress report on the financing of French start-ups. What is your assessment?

Paul Midy: Overall, it's very good. Over the last ten years, we've had quite an exceptional trajectory.

In 2012-2013, there was virtually no ecosystem, and today we have nearly 30 unicorns (companies valued at more than a billion dollars) in fields as varied as e-commerce, data and cryptos.

This dynamic can be summed up in one figure: in 2017, French start-ups raised €2 billion, while in 2022, they will have raised more than €13 billion! 🤑

Today, France is number one on the European continent ahead of Germany, although the UK is still far ahead with double that (€26 billion).

With inflation and investor fears, the amounts raised will fall sharply and some companies will run into difficulties...

Fundraising has been falling very sharply for several months now, but this is not just a French issue, it affects everyone.

The reasons for this fall are fairly obvious: with inflation and rising interest rates, money is more expensive, so investors are in a fog, and they're waiting to see how things will develop.

In your progress report you make several proposals to better finance businesses, with an emphasis on innovation. What are they?

For decades, France has been the world champion in public funding. Between Bpifrance, France 2030 and the French Tech mission, we have a unique system that has supported companies such as Qonto, Ledger and Spendesk.

But when it comes to private funding, we're a long way behind, which can penalise us, particularly on disruptive technologies where there needs to be an alliance between the public and private sectors.

This is why the President of the Republic announced during the 2022 campaign (in an interview with The Big Whale, editor's note) his desire to set up a system comparable to the UK's SEIS-EIS, which mobilises private savings via tax breaks of between 30% and 50% depending on investments in start-ups 💡.

What are you proposing?

As requested by the President, France must have a similar scheme. I'm working on an overhaul of the "young companies" tool to make it a genuine scheme that finances companies, focusing on innovative sectors, with buffers and two new categories: Young Companies for Innovation and Growth (JEIC) and Young Companies for Innovation and Breakthrough (JEIR).

Investments in a JEIR will benefit from a tax reduction of 50% and those in JEICs from 30%.

When will this scheme be available?

This project must be included in the Finance Bill because there are tax issues involved. I hope that it can come into force on 1 January 2024 🗓️.

What is your view of Web3?

France has the capacity to be a leader in Web3, at least at European level. What we lack most is funding.

We have the talent and the entrepreneurial spirit, we need more funding so that there are not just a few companies, but dozens of leaders in the sector.

The crypto ecosystem is still volatile. Isn't it problematic to get people to invest in it?

Here, we're not talking about the markets, but the companies in the ecosystem. Ledger and Sorare have shown their resilience. We need to continue to lead on this front, just as we need to continue to make progress on regulation.

Some people are worried about too much regulation. Do you understand them?

It's understandable, but we can see that regulation has become a key issue, and if you manage to take the lead as Europe has done with MiCA, you become attractive.

How do you measure it?

Look today at where Binance, Circle,, and the other giants are setting up shop. They are coming to Europe and especially to Paris. The other interesting point is that even though volumes have fallen, Europe is attracting more and more web3 investors, who are reassured by the regulatory framework.

How do you explain that France is so well positioned on tech topics?

We have a country of science and engineers. We have very strong skills that we need to capitalise on because these are also issues of sovereignty.

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