Switzerland Welcomes New Startup Fund To Support Entrepreneurshipby Fintechnews Switzerland July 4, 2017
The newly launched Swiss Entrepreneurs Foundation aims to raise a fund worth CHF 500 million to support young Swiss startups. So far, around CHF 300 million has been committed, according to a report by NZZ am Sonntag. The fund is expected to be operational from 2018.
15 representatives of banks, insurance firms and organizations including UBS and Credit Suisse, gathered last week at a meeting with Johann Schneider-Ammann, the Swiss minister of economic affairs, education and research, to sign an agreement to commit to the Swiss Entrepreneurs Foundation.
A Credit Suisse representative commented:
“Credit Suisse sees itself as a bank for entrepreneurs and supports the goal of fostering growth financing in Switzerland. Credit Suisse has been providing capital […] to venture capital firms and Swiss SMEs and young entrepreneurs, amounting to up to CHF 100 million, and we are now actively contributing our expertise to the establishment of the Swiss Entrepreneur Foundation.”
Schneider-Ammann played a key role in the establishment of the organization. Lorenz Furrer of Furrer Hugi, who also is involved in the initiative, said that “without Johann Schneider-Ammann, we would never be where we are now.”
Schneider-Ammann said he “would welcome it if the initiative were taken over permanently by the competent federal council.”
The Swiss Entrepreneurs Foundation intends to support Switzerland’s young talents and improve the framework conditions in order to develop a startup culture. It is part of the broader “Digital Switzerland,” an initiative to promote digitalization led by FDP councilor, Ruedi Noser, and business attorney Christian Wenger.
Schneider-Ammann said that a change of mentality was needed in Switzerland. He noted that while in the US, business failure is greeted with a “better luck next time,” in Switzerland, “if you fail with your business idea here everyone points the finger at you. You are branded a looser.”
“This stifles entrepreneurship – and we want to change this,” Schneider-Ammann said.
“We want to create an environment in which young people are prepared to take risks. We want to breed entrepreneurs.”
Bridging the funding gap
According to Wenger, while it is easy for young entrepreneurs to raise between CHF 1.5 and 3 million for the development of a prototype, it is “difficult for Swiss startups in the second phase of development when amounts between CHF 3 and 15 million are needed to bring a product to market.”
According to a survey, over 80% of the money that flows into Swiss startups comes from abroad, notably from the US and Germany. Wenger said that this entails the risk “that new developments, be it concrete products or technologies, will sooner or later be withdrawn abroad.”
“I don’t want good ideas that are developed in Switzerland to be exported to California, and create jobs there. I want them here, with us.”
Hence, the fund will focus on the segment between CHF 3 and 15 million. As the project lead, Wenger said that he would expand the foundation in the coming months.
The Swiss Entrepreneurs Foundation doesn’t intend to compete against the likes of Zukunftsfond Schweiz (Swiss Future Fund) but rather “supplements and harmonizes the offers” that are already available in Switzerland, Wenger said.
Featured image by Igor Samoilik, via Shutterstock.com.