risk financing for entrepreneurship dimitris tsigos
TRANSCRIPT
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Materializing Innovation
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Risk Financing for Entrepreneurship
“Finding liquidity” The Economist’s Credit Risk Management
Conference
Dimitris TsigosFounder & CEO
StartTech Ventureswww.linkedin.com/in/tsigos Athens, November 9th 2012
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“Significant shortening of risk financing for
entrepreneurship in Greece”
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Is it really about Greece?
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USE(!) Vs USA
• The EU27 GDP is higher than the US GDP
• http://europa.eu/about-eu/facts-figures/economy/index_en.htm
• Angel investments (2009)– EU27: ~ 4B$– USA : ~18B$– Source: EBAN, www.eban.org
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It’s not about Greece.
It’s about OLD Europe
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How does an old person behave?
• Conservative• Slow moving
• Does it look like the ideal ground for “Risk Financing for Entrepreneurship”?
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Need to develop the “Culture of Failure” in
EuropeTurning Europe YOUNG again!•Education•Legislation
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The Silicon Paranoia
• “Silicon Roundabout”, UK http://www.siliconroundabout.org.uk
• “Silicon Beach”, Australia http://siliconbeachaustralia.org
• The “Greek Silicon Valley”– “Acropolis Technology Park”– “Alexander Innovation Zone”– a.s.o….
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Stop insanity now!
• There’s only one Silicon Valley• It’s NOT an “one size fits all”!• Looking for the “European Facebook”
or the “European Google” is a kind of provinciality
• Europe does not deserve it
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The Silicon Valley model is NOT a panacea!
We need authentic growth models for start-up entrepreneurship
(including of course risk financing) in Europe
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USE Vs USA
• EU: The “grow-sustainably” model– Invest in unique
teams– Focus to usefulness– Invest less, support
more– Higher percentage
of successes– Higher return on
average
• USA: The “fail fast” model– Investing in unique
ideas– Focus to excitement– Tons of funding, high
expectations– Very low percentage
of successes– Very high returns (?)
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From Pyramids to Pancakes
• Josephine Green: “From command and control to a truly flat world of collaboration!” http://www.pyramids2pancakes.com
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• We Europeans must champion the pancake model versus the pyramid one
• In other words:– Europe’s strategy should NOT be about
domination, but it is about sustainability
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The “Entrepreneurial Ecosystem”
• A European approach challenging the Silicon Valley model
• Key assumption: Access to market is more important than access to capital
• Group of non-competing start-ups• Enjoying economies of scale• Without losing flexibility, strong entrepreneurial
drive• Evolved in the journey from the first student start-
up in Greece to a Seed Fund, an Incubator and a Business Angel Network
• http://en.wikipedia.org/wiki/Entrepreneurial_ecosystem
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Who can fund entrepreneurship?
• Financial Institutions
• Governments
• Individual Investors
• Corporate Investors
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Extreme necessity for incentives for individuals and corporate investors in promoting angel / seed investments in Europe
• From “SME support” to “Start-up support”• Tax start-ups like individuals:
–Lower tax income – lower taxes
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Governments
• Please, stop subsidies NOW!• Subsidies kill entrepreneurship• Looking for Customers is wiser than
looking for the right supplier invoices!• New instruments
– Business plan competitions– Soft-loans – State-backed Funds
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Conclusions?
• Angel investments & corporate venturing can drive risk financing for entrepreneurship in Europe
• A plethora of successful examples already exists
• Extreme necessity for structural changes in the legal & tax framework as well as in the education & research fronts– Bridge innovation/research with market needs– Create start-up-friendly environment
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Thank you