Thoughts on the EU Recovery Fund and SE startup ecosystems
Following an interesting discussion on Linkedin last week, discussing key challenges on further building the momentum in the Greek ecosystem, Sifted today published an article on the EU Recovery Fund and how this will affect southern European ecosystems, like ours — including comments and thoughts by yours truly. (Thank you Tim Smith, for the fruitful discussion)
TL;DR — + additional thoughts:
- It’s super difficult to raise your first round as a first-time entrepreneur, typically amounts up to 200k Euro (50–200k range) at the ideation stage, where its a bit pre-mature to seek for VC money. This leads to limited experimentation and thus shortening the potential venture creation funnel.
- The domestic (Greek) angel community is very small and very premature. We need to supercharge this. The Greek Ministry of Development and EIF have announced a new “Angel Fund(s?)” focused purely in Greek startups, as reflows from the JEREMIE program have emerged in recent months (no fresh public investment — that’s super important for the long-term sustainability of the local market). The tender is expected to be published in late September.
- A similar strategy needs to be followed for local accelerators and incubators. If not mistaken, EIT Digital Venture Program (part of ARISE Europe, operated by Found.ation) is the only program that offers hard cash (up to 25k Euro). We need to make it easier to raise first cash, and corporates must be more active as funders (including hard cash to startups) and market validation/access platforms for young ventures.
- The JEREMIE program, and especially the Equifund platform as a framework-best practice of distributing capital in innovation (via financial intermediaries, commonly known as Venture Capital Investors) as they provide higher accountability, transparency, and an all-around more effective and aligned (between capital provider and investee) mechanism compared to grant-focused schemes.
- Not included in the article, still a dire need in Southern Europe: Access to impact capital for social or hybrid enterprises. This deserves a separate, stand-alone, article.
