The other day, in a meeting I had with the founder and director of a well-known start-up incubator, I was confronted with his opposition to any kind of subsidy for the creation of companies. And he was also consistent with his opinion, he had set up 5-7 companies in the last year and had not asked for public support for any of them.
Although public funding programmes have been reduced due to government budget cuts, there are still several that remain, such as, for example, the plan moves forward for ICT companies.
Entrepreneurs against public aid
In recent times, several entrepreneurs have expressed their rejection of the ecosystem that is created around subsidies. The main reason they give is that many projects are created mainly to obtain the subsidy and, in their opinion, are therefore flawed from the outset. As a consequence, these projects are not market-oriented, but rather oriented towards meeting the requirements set by the public institution. We all agree that it is not the role of the administration to determine which markets are more profitable and forward-looking than others.
Opinions in favour of public funding
For many others, on the other hand, the public role is necessary as it fulfils the subsidiary function to private initiative. In the early stages of any enterprise, the absence of private support is covered by public funding.
Albert Fernández (Professor at IESE) tells us about the benefits of public funding in his video:
– Al ser préstamos no producen una dilución del emprendedor, es decir, no reduce su participación accionarial.
– Las buenas condiciones de los préstamos públicos tanto por los períodos como por los tipos de interés.
– Las entidades más activas a nivel español son ENISA y CDTI, y a nivel regional Madrid Emprende. ICF y SPRI.
Another alternative: promoting risk-taking "early adopter" customers
But undoubtedly the best help a start-up can get is a good order book. Sales are the healthiest and most profitable financing. Some entrepreneurs tell us that what they ask the authorities is that they are the first to contract their services and/or products.
Otra alternativa es el desarrollo del crowdfunding como kickstarter para proyectos creativos pero no a cambio de participación accionarial si no como forma de financiar la primera serie de productos a cambio de mejores condiciones de contratación futuras.
Diego Gutiérrez Zarza
ABRA INVEST
Web: www.abra-invest.com