Biodemain sees BIG despite its small social capital, taxes and corporate law

Stéphane Delebassé and Maxime Durand broke their piggy bank to create a Biodemain at Mons-en-Pévèle near Lille. “We were students at the time,” Maxime Durand recalls. Their project was to support farmers in their switch to organic produce. The founders collect the total amount and all the 400 Euros which they deposited in the Bank as equity share. “400 euros was the end of the world!”

The company, which has since been renamed Beyond Green, originally had 400 shares with a face value of one euro each. Today, after opening the capital to investors, it has 56,374 shares with a nominal value of 1 euro each, i.e. a share capital of 563.74 euros. The remainder of the capital of a very small company after it was valued at more than 2 million euros during the fundraising process!

Divide the capital by 100

Small or large capital? When setting up a business, or while developing it, the choice depends above all on the amount of investment and, in particular, the materials one is willing to make. No need for thousands of Euros for Biodemain whose aim was above all in serving farmers, distributing products in organic conversion.

However, things accelerated in 2021 when the startup first raised funds. Before any opening of its capital, the company makes an assessment of its value. In the case of startups, such as Biodemain, this valuation often reflects investors’ expectations more than the true value of the assets. This causes many negotiations between partners and future partners.

In Biodemain, the fundraising operation brought in 1.4 million euros. To carry out the operation, the partners decided to create new shares instead of selling part of them. This limits the mitigating effect. But given the valuation and planned contributions, keeping the initial number of shares at 400, the new share price would have been €3,750! The entry ticket is quite high for individuals, especially since Biodemain has decided to launch a mass parity process with the Lita site.

The solution to this was to proceed with a capital split by 100. “We had 400 shares for 1 euro which we converted into 40,000 shares at 1 euro cent,” explains Maxime Durand. The effect on the value of the movement is mechanical, as it drops to 37.50 euros. Maxime Durand adds: “This division allows us to better distribute the capital, as close as possible to what each investor really wants to invest.” Today’s company, which has 19 employees, has brought fifteen new investors to its capital.

Biodemain offers products from farmers in the transition to organic production.

Two million euros in turnover

The partners made another important choice: not to raise the par value of the share, which remained at 1 euro cent. An additional €37.49 corresponds to the so-called issue premium during fundraising or IPO. Let’s take the example of a listed company for a better understanding. The action taken by L’Oreal for example was €331.55 in the markets at the time of writing this article. This is the price you would have bought the stock at. However, the face value of L’Oreal stock is 20 euro cents!

To reorganize Biodemain shareholders, the partners had to be brought together. “We held an extraordinary general meeting, amended the articles of association and submitted it to the record,” the director commented. After the entry of investors, the duo of the founding partners still have 70% of the capital.

Is having a small capital punishable for raising funds? Is this a concern for creditors and investors? Not in the case of Biodemain. “What intrigued them was the actions that were taken, our development projects and the number of products we were planning to release. We only asked a major distributor during the client meeting if there was zero missing from our capital amount. This did not stop them from following us on our projects afterwards,” says Maxime Durand. .

Biodemain supported 150 farmers towards organic produce in 2021, and is targeting 500 farmers this year. The brand distributes its products in 450 organic stores, and under the Transition brand, in 1,200 stores. Sales volume jumped from €150,000 in 2020 to €600,000 in 2021. “We ended the year with a high monthly turnover, which allows us to envision 2022 well,” concludes Maxime Durand, who hopes to exceed €2 million in sales volume this year. Extremely”. . The company will also open internationally, starting with Belgium.

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