Young companies don’t need to go abroad for help anymore
Because startup companies are important for economic growth, the Slovene Enterprise Fund is closely collaborating with the Ministry of Economic Development and Technology and putting a lot of energy into designing financial instruments that enable the financing of young innovative companies, says Maja Tomanič Vidovič, the director of the Slovene Enterprise Fund (SPS), which is also the co-organizer of PODIM. She adds that this year, 1 million euros more of support is available to the startup ecosystem compared to last year.
“We assess that in the next mid-term period, Slovenian SMEs will have at least 35 million euros of public and private funds at their disposal,” says the director of the Slovene Enterprise Fund, mag. Maja Tomanič Vidovič.
This year’s record number of entrepreneurs’ applications to the pre-selection of Slovene Enterprise Fund’s P2 tender – we received 135 applications – is only one of the indicators that entrepreneurial activity has once again been strengthening. How do you assess this from the perspective of an organization that’s an important part of the support environment for startups?
“It’s true. On the one hand, entrepreneurial activity is really strengthening, but on the other hand, companies have learned that in the Slovenian environment, they can get more and more support that they urgently need at the beginning of their business journey, where most problems usually arise.
The fact is that young companies do not need to get help abroad due to a lack of finances and content support anymore, as SPS together with the Ministry of Economic Development and Technology is trying to ensure as many good conditions for successful company launch on the Slovenian market within the startup ecosystem.
That is why young companies have the opportunity to obtain not only financial support for launch through SPS but also rich content support, offered to young companies through intense mentoring and educational programmes. They can learn while working with excellent startup mentors and actively establish new business contacts in a community of individuals who hold the same values. With the entire offer package, including both financial and content support, we offer as much as possible.”
Plan to support about 50 new and young innovative companies
The Slovene Enterprise Fund and the Ministry of Economic Development and Technology are further strengthening support for startups and scaleups, this year there is more support than in the previous years, actually the most support in history. What is already available and what is still coming?
“Because startups are important for economic growth, SPS is closely collaborating with the Ministry of Economic Development and Technology, and putting a lot of energy into designing financial instruments that enable the financing of young innovative companies. Over the past few years, we have succeeded in putting together a rich range of products for young innovative companies, which enable company creation, company growth and global market launch.
We offer three lines for startups. With startup incentives, seed capital and venture capital, we are trying to offer young, development-oriented companies a comprehensive package of financial products, with which they can gradually finance the development of a young company. At the same time, this offer has strengthened the Slovenian startup ecosystem, which is becoming increasingly internationally competitive. This year, approximately 3.16 million euros will be available for all three lines, which is 1 million euros more than in 2018. We are planning to support about 50 new and young innovative companies.
Within the first line, we already offered incentives to young innovative companies with rapid growth potential, in the amount of up to 54,000 euros, altogether 2.16 million euros for 40 innovative companies that are 14 months old or younger. In the period until the year 2023, companies will have 8.64 million euros at their disposal for the first growth stage.
The second line is seed capital, which will once again be available, namely in the form of convertible loans of 75,000 euros for faster commercialization of innovative products on the market, and in the form of SPS co-investment with business angels or corporations into young innovative companies with global growth potential.
The amount of SPS investment into young companies will be up to 650,000 euros, which will be at least matched by independent private investors (business angels or corporations). In 2019, altogether up to 1 million euros will be available, and as much as 13 million euros of public funds until the year 2023 will be offered to about 80 young innovative companies. This will altogether mean at least 26 million euros of public and private funds.
Within the third line, young companies with global growth potential can get funds through the equity line of private and venture capitals, namely CEFoF – the Central European Fund of Funds, managed by the European Investment Fund (EIF).
We assess that Slovenian SMEs will have at least 35 million euros of public and private funds at their disposal in the next mid-term period. The companies will be able to get the funds through venture capital firms and private venture capital funds which have been or will be chosen by EIF as the intermediary in financing SMEs.”
Collaboration between SPS and private investors reduces risk for both partners
As a financial institution investing public money, what do you think about the engagement of private investors (informal business angels as well as venture capital funds and corporate business programmes)?
“With tenders for co-investing with business angels and venture capital funds, SPS wishes to further strengthen the engagement of private investors in the domain of startup support. We also wish to include as many potential business angels who so far haven’t invested into young companies, as this part of early investment is especially important for the development of a successful ecosystem.
Collaboration between SPS and private investors decreases risks for both partners, while the knowledge and connections of business angels increase the likelihood of success for the supported startup companies.”
Collaboration between established companies and startups or scaleups is also becoming increasingly important for innovation and marketing innovative products. Is SPS, in collaboration with the Ministry of Economic Development and Technology, also thinking about incentives for such collaborations that it would dedicate to established corporations?
“The previously mentioned second line is dedicated to this entirely, and the third line presents public-private partnerships as well. SPS, through the Fund of Funds, is already preparing a tender for co-investing into innovative startup companies with corporations, with which we wish to additionally encourage corporations that already have programmes for collaboration with startups and attract new companies that are interested in the idea but don’t know how to start with the implementation.
For them, 13 million euros are reserved by the end of 2023, we could together invest into about 20 startups companies in this period. The open innovation concept is already established abroad, but still in its infancy in Slovenia. Open innovation is changing the mindset of corporations, where development isn’t hidden in R&D departments within companies anymore, but instead, it’s faster and better for companies to look for external development sources in collaboration with startup companies.”
PODIM as one of the reasons why the Slovenian startup ecosystem is developing incredibly quickly
There are more and more incentives for connecting in the region, including the Startup Europe Central Eastern Europe Network and Startup Europe Western Balkans Network, which will also be present at PODIM and wishes to strengthen collaboration in the region. We believe that SPS also feels like it’s a part of this region, so we are interested to know: how are you connecting with regional stakeholders?
“SPS is constantly connecting with regional stakeholders, and in this, it’s closely collaborating with partners from the national startup ecosystem. SPS is thus connecting with practically all similar institutions from the entire region, which doesn’t include only the Balkans but also covers other countries close by. The most important institutions thus include AWS from Austria, HAMAG-BICRO from Croatia, Fond za inovacionu delatnost from Serbia and other similar partners.
By participating at international conferences such as PODIM, SPS is also connecting with international investors who are interested in connecting with Slovenian companies. Such regional connections are very important for SPS in the domain of financing and introducing best practices for private-public financing partnerships. This way, SPS is also an active investor in CEFoF – the Central European Fund of Funds for venture capital, where globally-oriented companies can get up to 8 million euros/company.”
This year’s PODIM, co-organized by SPS and MGRT, will also give a lot of emphasis to collaborations between corporations and startups/scaleups. What is the motive behind co-organizing PODIM?
“The international PODIM conference is one of the key components of the Slovenian startup ecosystem. The conference has an educational as well as networking part. In Maribor, all stakeholders of the startup ecosystem can gather in one place, exchanging their experiences and knowledge.
PODIM is also one of the reasons why the Slovenian startup ecosystem is developing incredibly fast, and why there is an increased level of knowledge in all domains of managing young innovative companies, which will be a backbone of Slovenian economy in the future. The decision to support and co-organize such a successful event thus isn’t difficult.”