BeAngels will launch a seventh and brand-new SIBA very shortly. But what is a SIBA? What type of profile fits with this sort of investment tool? What are the conditions for investing? We try to answer these questions and more in the article below.
What is a SIBA?
The French-language acronym SIBA stands for Business Angels Investment Structure.
A SIBA is a group of investors who invest in a portfolio of six to eight start-ups, depending on the amount capitalised in the investment vehicle. The portfolio is usually built up over 12 to 18 months. The SIBA's business angels invest on a collegial basis as a single entity for the recipient company.
What is the advantage of a SIBA? What type of investor profile is it aimed at?
A SIBA is a flexible and fast tool as regards decision making and building a portfolio. It demands little in the way of time.
Building a portfolio means investing in several start-ups from different sectors in order to diversify your investments; this is an essential strategy to reduce your risk and avoid putting all your eggs in one basket.
In terms of time, members of a SIBA benefit from optimised decision making for their investment. Indeed, due diligence (analysis of a file) for the project is the responsibility of the lead investor: one (or more) members of the BeAngels network who has performed his own analysis of the file and intends to invest in the target company. SIBA members rely on this upstream work done by one of the community members to position themselves for or against the investment opportunity. They may decide to invest more at the same time. Investment decisions, document sharing and exchanges are made via our portfolio management tool developed in-house by BeAngels: "MyPortfolio". The experience is therefore completely digital for those who wish.
Who is in a SIBA? What is the capitalised amount?
SIBAs generally consist of 20 to 35 members. The capitalisation can vary (minimum €300k, maximum €800k). This range depends on the number of members and the tickets they invest in the SIBA vehicle. Investments are made in increments of €10,000.
How much do I have to invest to join a SIBA?
An investor must take a minimum of 1 share and can take up to a maximum of 20% of the total shares under the vehicle (for example, if the SIBA is worth €350,000, the maximum number of shares/investor would be 7 shares; if the vehicle is worth €800,000, the maximum number of shares would be 16). One share is equivalent to €10,000. Each share corresponds to one vote for the voting process to decide whether or not to invest in a file.
What's the SIBA process like when investing in a start-up?
On average, five to eight projects are presented to a SIBA's partners for a co-investment opportunity.
- The majority of the projects come from the BeAngels "Dealflow": this means that the projects have gone through the selection committee, then have been presented to our active investor members and that some of them have already expressed their willingness to invest in the project and that one of them is going to take a role on the Board of Directors of the company. Some applications come from BeAngels' partners, who share the same concern for project qualification and mobilisation of private shareholders. They analyse the applications during the initial round of financing.
- The projects presented to SIBA members are carefully selected by the BeAngels team. These are deals that have already found investors, but are still looking for additional investment. It should be noted that a SIBA always acts solely as a "co-investment" tool. It is never the sole investor in a project.
- Once a project has been selected for presentation to the members of a SIBA, a report setting out the investment opportunity is made available on the platform for the partners to read.
- From receipt of the report, the members have five working days to vote for or against the project electronically. During this time, partners may indicate an interest in investing an additional amount under the same conditions, through the same investment vehicle.
- To act on an investment, a qualified majority must be reached: the qualified majority is set at a participation rate of at least 60% of the members of the structure and a favourable vote rate of 60% of the voters.
When will the next SIBA be launched?
The launch is scheduled for March 2022. Note that the next SIBA, the seventh, will be a "Tax Shelter" SIBA, which will benefit from projects coming from BeAngels and two partners of choice, E-Health Ventures (files in digital health) and Highwai AI (files in artificial intelligence and deeptech). This means that the proposed investments will be projects eligible for the Tax Shelter, a tax benefit that allows you to reduce your taxes following an investment in a start-up (more info here). We still have a few places left.
Would you like to join a SIBA or find out more?
We are organizing 3 information sessions (online) on the following dates:
- Monday March 14 (5:30-6:30 p.m.) - Registration
- Wednesday March 16 (9 a.m. to 10 a.m.) - Registration
- Friday, March 18 (12:00 p.m.-1:00 p.m.) - Registration
Do not hesitate to contact us for more information!