Glossary · Ecosystem and support · Updated
French innovation funding covers the country's non-dilutive support schemes: Bpifrance grants and repayable advances, the research tax credit (CIR), the innovation tax credit (CII) and young innovative company (JEI) status. Combined, they can represent several hundred thousand euros without giving up a single share.
This is the most underused French particularity, especially by founders arriving from abroad. Where a US startup funds research purely with equity, a French one has a stack of schemes that can cover a meaningful share of its technical payroll with no dilution at all.
The mechanisms work differently and stack. CIR and CII are tax credits computed on eligible spending, refunded in cash if the company is not paying tax. JEI status reduces employer social contributions on research staff. Bpifrance grants and advances are awarded case by case on application.
Two important caveats apply. Rates, caps and eligibility conditions are revised in each annual finance act, sometimes substantially, so a cash plan must never be built on last year's figures. And the timing gap is real: a CIR receivable is often collected the following year, which means funding the gap in the meantime.
Example: stacking the schemes across a technical team
An eight-person software startup with four people on research and development. Illustrative figures, to be recalculated under the current year's rules.
| Eligible R&D spending | €300,000 |
|---|---|
| Research tax credit (headline 30% rate) | about €90,000 |
| Eligible innovation spending for CII | €200,000 |
| Innovation tax credit (20%, €400,000 spending cap) | about €40,000 |
| JEI status | relief on employer contributions for R&D staff |
| Bpifrance grant or repayable advance | €30,000 to €90,000 depending on the scheme |
| Total non-dilutive support for the year | in the region of €150,000 to €200,000 |
| Dilution | 0% |
| CIR collection timing | often the following year |
These amounts represent several months of runway obtained without giving up equity. Since rates and caps change with each finance act, confirm them with Bpifrance or your accountant before putting them in a plan.
CIR or CII: the comparison
The two tax credits are routinely confused. They fund different work, target different companies, and can be combined as long as they apply to separate expenses.
| Criterion | CIR (research) | CII (innovation) |
|---|---|---|
| Work covered | Research resolving a scientific or technical uncertainty | Designing new products with no scientific obstacle |
| Eligible companies | Any size | Only SMEs as defined by EU rules |
| Indicative headline rate | 30% | 20% |
| Indicative spending cap | €100M at the headline rate | €400,000 of spending |
| Typical expenses | Researcher salaries, depreciation, approved subcontracting | Prototypes, pilot installations, design |
| Evidence required | Technical file describing the state of the art | File describing what is new about the product |
| Refunded if the company pays no tax | Yes | Yes |
| Can be combined | Yes, on separate expenses | Yes, on separate expenses |
The dividing line is the nature of the obstacle: if you must resolve an uncertainty the state of the art cannot answer, that is CIR. If you are designing a new product with no scientific barrier, that is CII. The rates and caps shown are reference points and change regularly.
The common mistake
Counting the CIR as cash in the year the spending occurs. The receivable is generally collected only after the tax return is filed, months later, and many cash plans slip by a full year for that reason alone.
Frequently asked questions
What public funding exists for an innovative startup in France?+
Mainly the research tax credit for research work, the innovation tax credit for designing new products, young innovative company status which reduces employer contributions on R&D staff, and Bpifrance grants or repayable advances awarded project by project.
Do these schemes dilute the cap table?+
None of them do. They are tax credits, contribution reliefs or grants: no organisation joins the cap table. That is what makes stacking them attractive before or during a round, since they extend runway without costing any percentage.
Related terms
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