How EU Programmes Can Help Innovators and Startups? An Open Letter
Europe, March 5th, 2018
Open Letter to:
Mr Jean-Claude Juncker, President
Mr. Andrus Ansip, Vice President for Digital Single Market
Mr. Jyrki Tapani Katainen, Vice-President for Jobs, Growth, Investment and Competitiveness
Ms. Elżbieta Bieńkowska, Commissioner for Internal Market, Industry, Entrepreneurship and SMEs
Ms. Mariya Gabriel, Commissioner for Digital Economy and Society
Mr. Carlos Moedas, Commissioner for Research Science and Innovation
Mr. Günther H. Oettinger, Commissioner for Budget & Human Resources
Re: How EU Programmes Can Help Innovators and Startups?
In recent years, Europe has made a lot of progress in producing more startups but the number of tech companies able to scale up across Europe and internationally is still too low. Research shows that we have approx. 4,200 tech companies that have been able to raise more than 1 million euros in Europe. But the number of tech businesses that are able to become scalers or unicorns is even lower. Europe needs more tech companies that are able to grow rapidly and go international while producing revenue, employment, and innovation on an increasingly larger stage. If Europe has somewhat partially filled the gap in seed and early stage financing, later stage growth financing (including access to IPOs and investments from pension funds and wealth foreign sovereign funds) still need to be significantly improved.
1. Support the Ecosystem rather than the single actors
EU programmes should not directly support startups/innovators rather the ecosystem by facilitating and fostering networking and international outreach to other regions’ ecosystems and actions aimed at making the ecosystem visible and attractive for investors and talent from outside Europe.
2. Fuel the Investors rather than the Startups
EU programmes should not be scattered across multiple financial instruments and grants rather be as much as possible concentrated and channeled through a single EU agency to private financial operators.
Rather than directly provide capital to startups EU funding should be invested into venture capital funds directly (public entities as LP of funds) or indirectly (public entities as LP of funds of funds). Alternatively public funds might be invested directly into startup companies but only in combination with investments from private funds and accelerators (matching funds like Yozma in Israel).
In case of public investment into private VC funds, management fees should be zeroed or consistently reduced and define other mechanisms to incentive/de-risk the VC managers (e.g buyout schemes for the investment made into the fund) to use all their means to support their investments to grow at international scale.
3. Support the later stage rather the early stage
Europe needs to produce its own startup champions. EU Support should focus to preferably support the startups in the growth phase (i.e. the scaleups) rather than the early stage startups.
Signing Entrepreneurs (*):
Alberto Onetti, Chairman, Mind the Bridge and Co-Founder, Funambol
Frédéric Mazzella, Founder & President, Blablacar
Peter Arvai, CEO & Co-Founder, Prezi
Christian Reber, Founder, Wunderlist
Juan Urdiales, Co-Founder & CoCEO, Jobandtalent
Andrea Anderheggen, Founder, Shopgate
Karen Boers, President, European Startup Network
Simon Schaefer, Founder, Factory and President, Startup Portugal
Florian Meissner, CEO & Co-Founder, Eyeem
Georges Caron, CEO, Bubbl Software
Neill Ricketts, Founder & CEO, Versarien
Fred Plais, CEO, Platform.sh
Bruno Lowagie, Founder & CTO, iText Group
Gianpiero Lotito, Co-Founder & CEO, FacilityLive
Xavier Corman, Co-Founder & CEO, Edebex
Ugo Parodi, Founder & CEO, Mosaicoon
Carlos Barrabés, Co-Founder, Barrabes.com
Jürgen Ingels, Founder and CFO, Clear2Pay and Founder, NGData
Pieterjan Bouten, Co-Founder & CEO, Showpad
(*) This is an open group. We encourage other fellow entrepreneurs to sign this Letter by filling the form below.