SOUTH SUMMIT 2016

ENTREPRENEURSHIP REVIEW

Data

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Origin

ORIGIN OF THE STARTUP: International ORIGIN OF THE STARTUP: Spain

Winners South Summit 2015

Finalists 2016

THE ENTREPRENEUR

Entrepreneur profile

MOTIVATION

TYPE OF PROJECTS

TARGET MARKETS OF THE STARTUPS

NEEDS AND RESOURCES

Money, Talent and Technology

WOMEN IN STARTUPS

BUILDING AN ECOFRIENDLY STARTUP SYSTEM

Regulatory areas to improve

FINAL CONSIDERATIONS

1. THE ENTREPRENEUR

THE SPANISH ENTREPRENEUR IS NOW PLAYING IN THE PREMIER LEAGUE PROFILE OF A SPANISH ENTREPRENEUR :

• Male

• 34 years old

• University level education (97%)

• Engineer (45%)

• Recurring entreprenuer. (51% have created more than 1 startup previously)

El emprendedor El emprendedor The entrepreneur

AGE

El emprendedor

9%

42%

33%

13%

2%

7%

54%

28%

7% 4%

13%

54%

21%

9%

2%

0%

10%

20%

30%

40%

50%

60%

18 - 24 25 - 34 35 - 44 45 - 54 >55

Spain

Europe

LATAM

Average Founder´s Age: 34

The entrepreneur

AGE. SPAIN 2014 - 2016

El emprendedor

6%

36%

44%

11%

3%

8%

44%

34%

11%

3%

9%

42%

33%

13%

2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

18-24 25-34 35-44 45-54 More than 55

201420152016

Similar evolution vs. 2015 and in line with Europe y Latam

The entrepreneur

17% 83% 16% 84% 16% 84%

El emprendedor

GENDER Percentage of Women

Founders remains at 17%. More needs to be done!

The entrepreneur

El emprendedor

GENDER. SPAIN 2014 - 2016

81%

19%

83%

17%

83%

17%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Man Women

201420152016

19% 81% 17% 83% 17% 83%

The entrepreneur

El emprendedor EDUCATION

El emprendedor

Startup is INNOVATION and therefore, EDUCATION. 45% of Founders are

Engineering Graduates

The entrepreneur

El emprendedor

El emprendedor

90%

10%

95%

5%

97%

3%

0%

20%

40%

60%

80%

100%

120%

Univesity Education- Postgrade Highschool Education - FP

2014

2015

2016

EDUCATION. SPAIN 2014 - 2016

Constant evolution with slight increases

The entrepreneur

56%

30%

11%

2% 1%

55%

30%

9%

2% 4%

49%

32%

15%

3% 1%

0%

10%

20%

30%

40%

50%

60%

Employed Entrepreneur Student Other Unemployed

Spain

Europe

LATAM

PREVIOUS WORK SITUATION

The entrepreneurship is a decision, not a necessity. Only 1% were

unemployed before launching a Startup.

The entrepreneur

57%

29%

10%

3% 1%

56%

30%

11%

2% 1%

0%

10%

20%

30%

40%

50%

60%

Employed Entrepreneur Student Other Unemployed

2015

2016

PREVIOUS WORK SITUATION. SPAIN 2014-2016

The entrepreneur

52% 48%

IS THIS YOUR FIRST STARTUP? More than the half have created a Startup before!

51%

First Startup I have undertaken before

The entrepreneur

52% 48%

63%

37%

49% 51% 49% 51%

0%

10%

20%

30%

40%

50%

60%

70%

It's my first startup I have undertaken before

201420152016

IS THIS YOUR FIRST STARTUP?. SPAIN 2014-2016 Ongoing evolution in terms of the maturity of Entrepreneurs

in Spain

The entrepreneur

50%

27%

15%

3% 5%

46%

27%

11% 11%

5%

37%

27%

22%

9% 5%

0%

10%

20%

30%

40%

50%

60%

1 2 3 4 5+

Spain

Europe

LATAM

NUMBER OF STARTUPS LAUNCHED BEFORE

5% of Founders have launched more than 5 Startups

The entrepreneur

2. MOTIVATION

62%

19% 19%

1%

68%

18% 13%

1%

70%

17%

10% 3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

I always wanted to bean Entrepreneur

I joined a project that Ibelieved in

I wanted to change myprofessional life

I was unemployed

Spain

Europe

LATAM

CIRCUMSTANCES BEFORE STARTING A

STARTUP

Entrepreneurship is a decision, not a necessity. Only 1% has been

previously unemployed.

Motivation

61%

20% 18%

1%

62%

19% 19%

1% 0%

10%

20%

30%

40%

50%

60%

70%

I always wanted to bean Entrepreneur

I joined a project that Ibelieved in

I wanted to change myprofessional life

I was unemployed

2015

2016

CIRCUMSTANCES BEFORE STARTING A

STARTUP. SPAIN 2015 - 2016 Circumstances leading people to create a Startup unchanged year

on year

Motivation

59%

20% 19%

1%

71%

16% 12%

1% 0%

10%

20%

30%

40%

50%

60%

70%

80%

I always wanted to bean Entrepreneur

I joined a project that Ibelieved in

I wanted to change myprofessional life

I was unemployed

First Startup

Recurringentrepreneur

CIRCUMSTANCES: ENTREPRENEUR BY FIRST TIME AND RECURRING ENTREPRENEUR

Motivation

62%

38%

63%

38%

66%

34%

0%

10%

20%

30%

40%

50%

60%

70%

Yes No

Spain

Europe

LATAM

DID YOU HAVE A PREVIOUS

STARTUP THAT FAILED?

26%

74%

37%

63%

34%

66%

Yes No

HAVE YOU PREVIOUSLY

SOLD A STARTUP?

62% of Founders have failed previously and 1 out of 4 have previously sold a Startup. Is selling synonymous with having had a successful startup and

failure synonymous with learning for your next one?

Motivation

3. WHAT KIND OF PROJECTS

STARTUP PROFILE

Projects

CATEGORY

Most startups are in early stage of development. Only 17% consider themselves at the Growth stage.

Projects

YEAR OF CREATION 50% of projects have been going for between 1 and 3

years

Projects

YEAR OF CREATION. SPAIN 2015 - 2016 Favorable evolution towards more projects with a greater

level of maturity

Projects

ACTUAL REVENUE 2015 / ESTIMATED REVENUE 2016 – SPAIN

54%

30%

7%

5%

2%

2%

0,35%

23%

29%

26%

18%

7%

4%

1,51%

0% 10% 20% 30% 40% 50% 60%

No Revenue

< 50.000 €

50.000 € - 150.000 €

150.000 € - 500.000 €

500.000 € - 1.000.000 €

1.000.000 € - 5.000.000 €

> 5.000.000 €

Estimated

Actual

Entrepreneurs are increasingly ambitious: Number of Startups that expect to bill between 150.000

And 500.000 euros is triple the number who billed that figure in 2015

Projects

NUMBER OF EMPLOYEES Startup continue to generate

Employment

Projects

NUMBER OF EMPLOYEES. SPAIN 2014 - 2016

21% of Startups have a team of 5 to 10 employees, 5% more than last year

Projects

4. TARGET MARKETS OF THE

STARTUPS

0% 2% 4% 6% 8%

Telecommunication 15.

IoT/IoE & Sensors 14.

Social Impact 13.

Media & Communications 12.

Big Data & Analytics 11.

Fashion 10.

Social Networking 9.

Fintech, Banking & Legal 8.

Food & Beverages 7.

Advertising & Marketing 6.

Travel & Transportation 5.

Health & Med Tech 4.

Business & Productivity Services 3.

Consumer / E-commerce 2.

Education 1.

Industries 2016

*Top 15 industries with the most Startups registered

Target markets for Startups

TOP RANKING SEGMENTS 2016 TOP RANKING SEGMENTS 2015

1. Consumer / E-commerce

2. Business & Productivity Services

3. Education

4. Travel & Transportation

5. Social Networking

6. Health & Med Tech

7. Media & Communications

8. Advertising & Marketing

9. Big Data & Analytics

10. Fashion

11. Fintech, Banking & Legal

12. Sports, Quantified Self & Recreation

13. Telecommunication

14. Food & Beverages

15. Gaming & Virtual World

Startups change respond quickly to changes in Market focus.

60%

53%

38%

8%

65%

45% 42%

9%

59%

52%

40%

12%

0%

10%

20%

30%

40%

50%

60%

70%

B2B B2C B2B2C B2G

Spain

Europa

LATAM

CUSTOMER TYPE Startups create most of

products and services for the industries (B2B). Fewer startups

are focusing on B2C

Target markets for Startups

49%

42%

28%

11% 14%

22%

37%

53%

41%

12% 11% 14%

56%

51%

23%

12% 8%

19%

0%

10%

20%

30%

40%

50%

60%

Services Software Saas Hardware Other Physical productor material

Spain

Europe

LATAM

TYPE OF PRODUCTS AND SERVICES In Spain most Startups focus on Services, where as in Software

is king in the rest of Europe.

Target markets for Startups

5. NEEDS AND RESOURCES:

MONEY, TALENT AND

TECHNOLOGY

15% 54%

27%

14%

4% 1%

53%

21% 24%

1% 1%

57%

24%

16%

3% 1%

0%

10%

20%

30%

40%

50%

60%

Own Family and friends Private funds Bank credits Crowdfunding

Spain

Europe

LATAM

FIRST SOURCE OF FINANCING

Needs and resources

More than half of entrepreneurs rely on their own resources to get started.

15% 61%

22%

12%

5%

58%

26%

12%

3% 1%

54%

27%

14%

4% 1%

0%

10%

20%

30%

40%

50%

60%

70%

Own Friends & Family Private Funding Bank Credit Crowdfunding

2014 2015 2016

FIRST SOURCE OF FINANCING– SPAIN 2014 -2016

Ongoing maturation in terms of the Financing model, as it gets more sophisticated. Spain advancing in Private funding but still has long way to go, in comparison to Europe. (14% vs 24%)

Needs and resources

15%

14% 14%

43%

15%

9%

4% 6%

7%

36%

23% 22%

7%

25%

16%

38%

10% 9%

2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Spain

Europe

LATAM

FUNDING REQUESTS

Needs and resources

15%

28%

43%

14% 11%

4%

15%

18%

40%

16%

7%

4%

14% 14%

43%

15%

9%

4%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2014

2015

2016

FUNDING REQUESTS. SPAIN 2014 - 2016

Needs and resources

15% 13%

42%

14% 11%

4% 9% 9%

43%

18% 16%

5% 5%

12%

30%

24% 24%

5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0 - 50.000 € 50.000 - 100.000 € 100.000 - 500.000 € 500.000 - 1.000.000 € 1.000.000 - 3.000.000 € + 3.000.000 €

1

2 a 3

4+

FUNDING REQUESTS VS NUMBER OF LAUNCHED STARTUPS

Level of Funding Startups are looking for, increases in line with the number of Startups

previously launched

Needs and resources

40%

31%

24% 26% 22%

20%

11% 14%

5%

52%

24% 27%

25%

16%

29%

5%

11%

5%

43%

26%

21%

17%

25% 25%

16%

21%

8%

0%

10%

20%

30%

40%

50%

60%

Spain

Europe

LATAM

INCOME MODEL

Direct Income models are more prevalent than Indirect Income models

Needs and resources

15% 49%

47%

41%

25%

16% 16% 14% 14%

8%

4% 3% 1%

45% 44%

33%

28%

21%

17% 15%

20%

10%

2% 2% 1%

43%

46% 49%

27%

17% 19%

21% 23%

10% 8%

4% 2%

0%

10%

20%

30%

40%

50%

60%

Spain

Europa

LATAM

Business Development Sales, Sales, Sales!!!

REQUESTED PROFILES

Needs and resources

6. WOMEN IN STARTUPS

• Startups with female founders fail less than those with only male founders. Only 48%

vs 66% of males. • Female Founders are more conservative when it come to managing their own

resources.

• They tend to be less risk adverse with the amount of financing they ask for. 54% of Female led Startups received funding of between 50000 to 500000 EUR vs 44% of Male led Startups.

• They are more cautious when estimating their gross income. 30% of them estimate

they will make less than 50.000 euros this coming year.

¿¿HOW TO CONVINCE WOMEN THAT IS WORTH IT??

• 23% of Female Founders became Entreprenuers in order to change their career path against 15% of male founders.

ONLY 17% BUT SYNONYMOUS OF SUCCESS

Female Entrepreneurs

* Based on Global Dataset

52% 48%

66%

34%

46%

54% 53%

47%

0%

10%

20%

30%

40%

50%

60%

70%

No Yes

Female

Male

Mixed team

¿ IS THIS YOUR FIRST STARTUP?

Women in Startups

52% 48%

¿HOW MANY STARTUPS HAVE YOU HAD BEFORE?

55%

26%

6% 6% 6%

44%

27%

18%

6% 5%

56%

30%

8%

1%

6%

0%

10%

20%

30%

40%

50%

60%

1 2 3 4 5+

Female

Male

Mixed team

Women in Startups

52% 48%

¿DID ANY OF THOSE FAIL?

48% 52%

66%

34%

60%

40%

0%

10%

20%

30%

40%

50%

60%

70%

Sí No

Female

Male

Mixed team

Women in Startups

41%

26% 28%

3% 1%

49%

20%

24%

4% 2% 1%

53%

18%

23%

4%

1%

0%

10%

20%

30%

40%

50%

60%

Female

Male

Mixed

INVESTMENT ROUNDS

Women in Startups

60%

24%

8% 5%

4%

53%

31%

14%

2% 1%

57%

30%

10%

3%

0%

10%

20%

30%

40%

50%

60%

70%

Employed Entrepreneur Student Other Unemployed

Female

Male

Mixto

PREVIOUS WORK SITUATION

Women in Startups

80%

15%

5%

81%

15%

4%

83%

14%

3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

I saw an opportunity Entrepreneur spirit Out of necessity

Female

Male

Mixed

REASONS THAT LEAD YOU TO START A STARTUP

Women in Startups

56%

18%

23%

3%

67%

17% 15%

1%

61%

23%

15%

1% 0%

10%

20%

30%

40%

50%

60%

70%

80%

I always wanted to be anentrepreneur

I joined a project inwhich believed

I wanted to turn myprofessional life

I was unemployed

Female

Male

Mixed

CIRCUMSTANCES BEFORE FOUNDING A STARTUP

Women in Startups

7. HOW TO CREATE A STARTUP

FRIENDLY ECOSYSTEM

73% 70%

41% 41%

15% 14%

12%

6% 5%

60%

79%

40%

34%

18%

8% 10%

6% 8%

58%

77%

41%

26%

20% 22%

13%

8% 5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Taxation forStartups

Access tofunding

Tax benefitsfor investors

Hiring flexibility Entrepreneurvisa/talent

More beneficialregulation forCrowdfunding

Stock options Ease ofextinction ofthe company

Other

Spain

Europa

LATAM

REGULATION AREAS THAT NEEDS IMPROVEMENT

To a ecosistem Startup Friendly

The government has fundamental role to play in the consolidation of the startup ecosystem.

Entrepreneurs are seeking: Reduction in tax rates for startups, facilitate the access to economic funds, fiscal benefits and flexibility in hiring.

8. FINAL THOUGHTS

Final Thoughts