Oscar Granados’ article in El País reads about the “Spanish startups being under pressure”. His article portrays a very negative landscape for Spanish startups or early-stage companies. We have seen the that Spanish Government launched measures to ensure the liquidity of companies affected by COVID-19. In recent weeks they have focused mainly on freelancers, SMEs and large companies. However, thestartups in Spain have been forgotten… Once again!!!
Most of the startups in Spain are not “client” of the traditional banking, a channel through which business aid has been channelled. So the special COVID-19 funding endorsed by the ICO (Corporate State-owned Entity) has not reached startups in Spain. Having forgotten these companies by the Spanish Government will have serious unprecedented consequences in job creation and wealth in Spain.
It is worth noting that early-stage companies fundamentally contribute to the economy and could be a solution that mitigate the consequences amid the COVID-19 crisis.
It is very bad news for an ecosystem, that since 2008, after the previous crisis of 2008, it was generator of employment, innovation and economic dynamism. Without finance, early-stage companies have no future as they need to finance their projects, manage their working capital and invest in their growth.
However, the French, German and British Governments are working to provide support to their startup ecosystems amid the crisis.
Let’s see the French example, where startups already account for 25%of new job creation. France has announced a plan of more than€4 Billion to help startups. It would be a great opportunity for hundreds of thousands of young Spaniards who don’t wish to go abroad to find jobs as in the previous crisis.
Germany, as we have said in another article, has prepared a €2 Billion plan to help its startups, these are the first steps to alleviate the effects of the COVID-19 crisis. German startups that need to complete their financing round, the German Gov. will act as an investor and will be able to invest up to 70% of the round in progress.
In short, Spain needs an urgent plan to support early-stage companies, from a point of view of public financing and the fiscal stimulation of private investment and the elimination of the already known barriers to entrepreneurship.
In Fellow Funders we are convinced of the need to launch a message of attention and alarm to all the Spanish and European public administrations to act now (ASAP) and protect the business future of Spain and Europe. We shouldn’t accept, under any circumstances, a generation of new companies and startups because of the COVID-19.
To be continued…
“Start-ups and SMEs need to guarantee their financial room for manoeuvre to face crisis and take advantage of opportunities that are key to their success. For that purpose, they need to be equipped with the best financial solutions on the market, including alternative financing”