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Risk financing for entrepreneurship dimitris tsigos
1) Risk financing for entrepreneurship in Europe faces challenges due to Europe being seen as "Old" compared to places like Silicon Valley, with a more conservative culture and slow moving approach. 2) Europe needs to develop a "culture of failure" through education and legislation to turn Europe "Young" again and better support entrepreneurship and risk-taking. 3) The Silicon Valley model of high funding and expectations is not a panacea for Europe, which should develop its own authentic growth models like the "Entrepreneurial Ecosystem" model of supporting startups through access to markets rather than just capital.
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Similar to Risk financing for entrepreneurship dimitris tsigos
Risk financing for entrepreneurship dimitris tsigos
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- 2. Risk Financing for Entrepreneurship “Finding liquidity” The Economist’s Credit Risk Management Conference Dimitris Tsigos Founder & CEO StartTech Ventures www.linkedin.com/in/tsigos Athens, November 9th 2012
- 3. “Significant shortening ofrisk financing for entrepreneurship in Greece”
- 4. Is it reallyabout Greece?
- 5. 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
- 6. It’s not aboutGreece. It’s about OLD Europe
- 7. How does anold person behave? • Conservative • Slow moving • Does it look like the ideal ground for “Risk Financing for Entrepreneurship”?
- 8. Need to developthe “Culture of Failure” in Europe Turning Europe YOUNG again! •Education •Legislation
- 9. 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….
- 10. 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
- 11. The Silicon Valleymodel is NOT a panacea! We need authentic growth models for start-up entrepreneurship (including of course risk financing) in Europe
- 12. USE Vs USA •EU: The “grow- • USA: The “fail fast” sustainably” model model – Invest in unique – Investing in unique teams ideas – Focus to usefulness – Focus to excitement – Invest less, support – Tons of funding, more high expectations – Higher percentage – Very low of successes percentage of – Higher return on successes average – Very high returns (?)
- 13. From Pyramids to Pancakes • Josephine Green: “From command and control to a truly flat world of collaboration!” http://www.pyramids2pancakes.com
- 14. • We Europeansmust champion the pancake model versus the pyramid one • In other words: – Europe’s strategy should NOT be about domination, but it is about sustainability
- 15. 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
- 16. Who can fund entrepreneurship? • Financial Institutions • Governments • Individual Investors • Corporate Investors
- 17. Extreme necessity forincentives 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
- 18. Governments • Please, stopsubsidies 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
- 19. 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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