In an increasingly competitive context, it has become essential to offer an objective analysis of the digital start-ups market. Objective: to equip players with the tools to identify, select and support an investment project.

Supply has caught up with demand. According to some observers, there are 60,000 French start-ups on the market. It’s not surprising therefore that the average Business Angel cannot find their way around it. At the same time, the hyper-publicised national and local large gatherings of the new wave of start-uppers have become commercially successful, filling the disused buildings in our industrial wastelands.

But how can these gatherings help investors to identify the most promising projects? And how can customers find their way in this market, where horse traders, experts in delivering a pitch, pumped up on marketing steroids from the FrenchTech incubators, try to persuade you that an old mare is actually a racehorse? Potential investors cannot even examine the horse for themselves, as the information being conveyed is so brief and intangible. Seen from the outside, this system has lost sight of its initial objective: identifying the best projects. Instead, it “identifies the ideas that are marketed best”.

Trust cannot be dictated

There’s the idea, and then there’s the people behind the idea. With regard to the latter, the information given out at these start-up events is inadequate. As Jean-Stéphane Arcis reminded us in his interview at the last Talentsoft fundraising round: fundraising is above all an encounter between people who do not necessarily know each other but who have connections with each other (technology, ethics, background, etc.) and common clear ground on which to build a joint business start-up plan. This encounter must be based on trust. Unfortunately, networking sessions are not enough to build this trust. Trust cannot be dictated.

More and more time spent on “informing” rather than doing

This is how the situation was summed up by a start-up founder: from fair to fair, and from price to price, he spends more time informing people what he’s developing instead of developing it. Why waste so much energy marketing a product when its design isn’t even completed yet? It is of course necessary to compare the product against the market, but it’s even more important to compare the idea against the potential users of the service. Comparisons with other start-ups are illusory in terms of product maturity. However, it seems that directors of start-ups spend much more time comparing themselves against each other rather than drawing comparisons with the market, whether it’s an existing or emerging one.

A dose of objectivity is needed to make decisions

In this context, the risks for investors, such as Venture Capitalists or Business Angels, are real – they might end up with an old mare, when they thought they were betting on a thoroughbred racehorse. In light of this, the methods for identifying the best digital start-ups are not adequate. It requires a combination of several skills, one of which is seemingly under-estimated: assessment of the start-up project’s management method.

Whatever the method used – Business Model Plan, Lean Startup, Kanban or “thrown together” – it is recognised that some information and practices are essential to the different stages of start-up development. Mapping the practices used in the start-up can help to identify any weaknesses or risk areas not covered. For example, a study of the practices of the Management Control System can provide an inventory of the best practices for start-ups. One in two companies in business for over five years puts in place a cashflow projection method after its second year. When this is not done, it’s a sign of weakness that can be a red flag about the quality of the project.

Start-up audits: new possibilities for investors

The start-up audit exercise must not be neglected therefore, as it involves auditing a project whose target may be a moving one, but which must be correctly identified at all times. The audit opens up new possibilities for investors, to consolidate their investment choice by adding objectivity to a world of superlatives and hyper-publicity. The model developed by Exaegis is designed to support this responsibility, by applying several points of inspection to the Business Model and its robustness – Is it user-centric?, Has it been tested? -, and to the Business Plan and its alignment with the Business Model, and also to the identification of any pivotal points that might require the start-up project to change direction.

These static elements should also be viewed against the operational performance of the project, including the initial customer experiences, in order to examine the suitability of the resources committed vis-à-vis the promises that need to be kept. The coherence between the initial products and services offered by the start-up and the customers’ needs must be measured to assess the maturity and viability of the product.


In conclusion, the current context for start-ups makes the investment exercise a difficult one, due to the transient nature of the offers as is felt by most investors, who may not be fully au fait with the digital sector and are bombarded with acronyms such as BYOD, IoT or SaaS. It is also made difficult by the profusion of offers, increasing competition between projects in a pernicious way, as the focus is more on marketing and communication than the value of the service and its suitability for the market. The start-up audit is an additional objective leverage tool for investors who are seeking reassurance about a decision, a second opinion or validation for a transaction.