'This is a great time for entrepreneurs in Spain'
Published on: 25 Aug 2014 16:57 CET
François Derbaix is no stranger to taking risks. In 2000, he took a leap of faith by moving to Spain with his Spanish partner. Once here, they launched their first web business, the rural holiday house portal toprural.com.
"We had no experience in Spain, in travel, or in rural tourism — or even in the internet, but we managed to attract several seasoned experts to our team. Toprural grew quite fast, mostly thanks to the website's usability and traveller reviews," Derbaix tells The Local.
"After two years of bootstrapping the company, with a lot of work and very little financing, the company grew to be a very profitable business which we sold in 2012."
Some 25 other businesses have now been added to Derbaix's résumé, including Soysuper, a supermarket aggregator he launched this year.
In June, the Belgian also launched Bewa7er, which he describes as a "lightweight stock market for not-listed companies" designed to "offer transparency and liquidity to investors in those non-listed companies".
"We manage to bring this to the small and medium-sized enterprises by selling 'economic rights' in place of shares (because shares in Spanish limited companies are not freely transferable because the current shareholders have a pre-emptive right of acquisition)," Derbaix explains.
Those investment opportunities are also only open to professional investors because the regulatory burden to offer to non-professional investors would be too high.
"A potential seller comes to Bewa7er and offers us the chance to sell his shares," says Derbaix outlining the system.
"Bewa7er then offers the economic rights to potential investors and if there is demand Bewa7er buys the shares, keeps the political rights of the shares and syndicates itself with the lead investor in the company, selling the economic rights to the interested investors," he says.
"Those investors will then be able to freely trade economic rights on the platform."
Bewa7er makes money by charging three percent commission to the seller on all transactions, and a 0.6 percent yearly maintenance fee to investors.
The exchange's first deal is about to be closed with 12 percent of Zacatrus, an online board game store in Spain, successfully listed on Bewa7er. More deals are in the pipeline.
Rules for listing on the exchange are strict and designed to make sure only serious businesses are included.
"Our selection criteria specify that the business must have enough financing at least for the next 12 months, be fast growing, have a lead investor and a shareholder agreement protecting the minority investor, and sales worth at least ten percent of total valuation over the previous four quarters," says Derbaix.
The entrepreneur says the idea came about because "the current barriers to information and transmission of shares in SMEs are so large that there is actually almost no secondary market in those companies".
"In many start-ups we have seen shareholders wanting to sell, while others want to buy, but the administrative burden involved in carrying out transactions simply kills them off," says Derbaix.
Asked about potential risks, the Belgian argues that Bewa7er is actually safer than many other platforms.
"Investing is a risky business, but the risk is lower in Bewa7er. A case like Gowex — a Spanish tech company which failed dramatically recently — would definitely not have happened in Bewa7er, because one of our admission criteria is that the start-up has a professional lead investor among its shareholders."
These professional investors are more prepared than normal individuals to value the risks of their investments and to have proper diversification of their investments, Derbaix explains.
"That was not the case in Gowex, where there was no professional investor in the board and almost no control of the entrepreneur and his friends."
"I think this is a great time for entrepreneurs in Spain: there are a lot of little productive sectors to break into and very well skilled people available to build great teams. I think that there are plenty of opportunities, across many sectors," Derbaix argues.