The Luxembourg Business Angel Network (LBAN) aim is to create a dynamic networking platform for Luxembourg’s business angel who either seeks to finance and/or provide business expertise to entrepreneurs in the seed to growth stage of their business ventures. KITE Invest spoke with LBAN’s President, Marc Molitor, about this unique business angel community.
KITE Invest: How do the business angel and entrepreneur communities of Luxembourg differ from their European neighbors?
Marc Molitor: We have observed that there is a general and favourable trend in Luxembourg for the development of start-ups.
Notably, Luxembourg is becoming more and more attractive for start-ups through the several incubators and accelerator programs which have flourished all over the country. One of the most recent examples is the creation of Nyuko, a brand new co-working space in the heart of Luxembourg.
There has been a real boost in innovation in Luxembourg, not only in the finance sector (e-payment, e-banking and Fin-Tech) but also in the health sector and ICT / e-commerce. We have also noticed that many entrepreneurs are coming from other countries to establish their business in Luxembourg, which create even more dynamism in the start-up scene. Also we have noticed a trend towards impact investing, even though this remains an emerging class of asset for Luxembourg we see a growing interest from Luxembourg business angels.
We believe that there is a significant potential as regards the entrepreneurial ecosystem in Luxembourg, which is very encouraging for the economy of the country.
LBAN has also entered a new phase: our main objective is to build a strong community of active business angels and seed capital investors in Luxembourg. As a result, LBAN focuses on serving the interests of the business angels and seed capital investors. We want to be THE reference for the business angel community in Luxembourg for sharing deal flow & best practices and encouraging investments in local start-ups.
In conclusion, Luxembourg is becoming an increasingly attractive platform for both investors and entrepreneurs.
KITE: How does Luxembourg’s small population (around 550K) and high GDP per capita (around 110K) play into the angel community?
MM: Another objective for the coming year is to create awareness in Luxembourg of the business angels and seed capital investor’s community. We want to build and strengthen interfaces with other organizations in the Luxembourg ecosystem.
As you mentioned, considering the size of the country it is of utmost importance that all organizations evolving in the Luxembourg entrepreneurial ecosystem are working together. We are notably working with the relevant stakeholders (notably the Ministries of the Economy and Finance) to create various incentive schemes to foster investments in early-stage projects.
In addition, it is our role to convert high net worth individuals into active business angels rather than passive real estate investors in order to mobilize more capital into the entrepreneurial ecosystem.
KITE: What are the characteristics of most investments in Luxembourg? Syndicated? Across borders? Sectors? Etc.
MM: Most of the investors invest on their own or with friends, however doing investments together with other angels not only reduces the relative risk, but is also a lot more fun then going at it alone.
Due to the high diversity in the nationalities of the Luxembourg business angel population, lot of business angels located in Luxembourg invest across the borders of Luxembourg, either because they get access to interesting opportunities in the great region (Belgium, Luxembourg and east part of France) or simply because they invest in their home countries as well.
In terms of sectors, it really depends on the investment policy of each angel, but we see a real interest for Fin-Tech, health care and ICT industries.
KITE: In February LBAN hosted is annual General Assembly. Could you share some of the highlights and “take-aways” from the event?
MM: Within the context of the LBAN annual general assembly we took the opportunity to first give an update on our activities and financials to our members but also to organize a public event that we called: Calling all Angels: Why Angel Investing matters!
During this event we had the chance to hear the testimony of a successful Luxembourg entrepreneur, Patrick Kersten, who explained how business angels supported his business. In addition, Candace Johnson, president of EBAN (European Business Angel Network) was our keynote speaker. Candace launched a called for the creation of an e-zone in Europe for early-stage investors, a unique market for business angels, entrepreneurs and actors of the innovation within the start-up industry.
KITE: In your estimation what have been some of the Network’s greatest achievements and challenges?
MM: The professionalization of our association has been a real challenge: we went from a symbolic membership fee to a more significant fee in 2014, which decreases significantly our membership base. However, we noticed that the most actives business angels stayed with us.
As a result, our members expect more quality and professionalism in the delivery of our services, which was one of our biggest challenges. In order to succeed we hired a part-time community manager who is assisting the board of LBAN in the delivery of our services to our members.
KITE: Prior to recently becoming the President of LBAN, you were a member of the Board. What are some of your personal goals for the Network that you hope to achieve while serving as President?
MM: I want to further raise the profile of LBAN inside Luxembourg, but also outside of Luxembourg. I want innovative start-ups (notably in the Fintech, ICT and Digital health space) to know that they should start their operations in the Luxembourg Ecosystem and that they will find the required seed capital from the LBAN Angel Investors.
KITE: Additionally you are an avid investor, what have been some of the biggest changes you have seen occur in angel investing over the years and where do you foresee the industry heading?
MM: I believe that angel investment and seed capital investors will become more and more needed for the financing of start-ups due to the economic slowdown and more generally the increasingly amount of guarantees asked by banks which discourages entrepreneurs. In parallel, the economic slowdown also creates a new generation of entrepreneurs who have the desire to work for themselves instead of being unemployed. We see offer and we see demand which seems like a promising wedding!