“The real challenge lies in the scaleup stage”

Michel Rzonzef, president and chairman of the board at the Luxembourg Business Angel Network (LBAN), shares his perspectives, experiences and ideas for the future, as part of the “Paperjam 10x6 - Entrepreneurs and Private Capital” event hosted by the Paperjam Club on 20 May 2025 at Kinepolis Kirchberg.

In your opinion, what are the main barriers to the internationalisation of Luxembourgish companies, and how can they be overcome?

: Unlike large countries, the Luxembourg market is limited in size. However, this has not prevented major Luxembourg companies--industrial, financial or otherwise--from becoming global leaders. In fact, the small size of the market is an advantage.

To grow and expand, a Luxembourg company must turn to international markets very early on, structure itself accordingly and build up the necessary skills. In contrast, companies from larger countries tend to focus on their domestic markets and, based on experience, they often struggle more when it comes time to scale internationally. For early-stage companies--Luxembourg startups--the challenge is more about the cost of international expansion, which arises early in the company’s development.

This is where business angels, such as the Luxembourg Business Angel Network, or certain VCs, come in. They offer experience, expertise, and often networks that are crucial in helping entrepreneurs adapt quickly to international growth.

Do Luxembourg companies have sufficient access to funding sources suited to their international development, or is there a lack of specific solutions?

Early-stage companies and startups may struggle to secure funding due to the investment criteria of institutional investors. This is where business angels or certain funds like venture capital come into play. Members of the Luxembourg Business Angel Network have invested more than €50m in startups over the past few years. This is significant and confirms that financing solutions do exist. Entrepreneurs with strong projects are able to find the means to fund them.

The real challenge lies in funding the acceleration phase of these companies--the scaleups. Unlike in the United States, Europe lacks sufficient funding options for this scaleup stage. The Luxembourg government has included this topic in the startup support programme it announced a few weeks ago. This is a good step in the right direction, and one that needs to be further developed.

What role do private investors play in the development of Luxembourgish companies? How can they better support these businesses?

Private investors play a crucial role in the development of Luxembourg companies by providing capital, strategic advice and valuable networks. Their support is especially important for startups and SMEs, which benefit from flexible financing and expertise--whether sector-specific or not.

Business angel associations like the Luxembourg Business Angel Network and certain VCs have a mission to support entrepreneurs through mentorship, access to relevant networks, governance guidance and more. They are particularly helpful in preparing companies for future fundraising rounds. This collaboration is key to a company’s development.