‘Spain Entrepreneurial Nation’: this is what startup founders and investors of the new government project think
The Government of Spain has presented these days his project of ‘Spain Entrepreneurial Nation’, a package of 50 measures to boost the startup sector. These include the creation of a national network of entrepreneurship centers, new incubators, a visa program and the preparation of the ‘Startups Law’.
From Xataka We have asked different founders, investors and accelerators what their vision is of this new strategy to find out to what extent Spain is going in the right direction or if these measures are far from being able to place our country at the level of Europe.
What is the ‘Spain Entrepreneurial Nation’ strategy?
To carry out this initiative, the Government has brought together the ministries of Foreign Affairs, Industry and Commerce, Social Security, Science and Tourism and Economic Affairs, in addition to having the participation of the CEOE president, the founder of Spain Startup and founders such as Carlota Pi from Holaluz or Rosario Ortiz from Adalab. In a meeting led by the President of the Government, Pedro Sánchez, they explained that in the coming weeks the draft of the ‘Law for the Promotion of the Ecosystem of Emerging Companies’ will be approved, known as the Startups Law. At the moment all the details are unknown, but it will be aimed at facilitating administrative procedures, retaining and attracting talent, promoting the company’s rapprochement with the educational world and will include “tax advantages and investment incentives”.
At document different initiatives are described. Among them is the creation of a Brand Spain Entrepreneurial Nation, the launch of a National Entrepreneurship Office, a visa program for improve access to foreign professionals and an international talent attraction program for women.
François Derbaix, co-founder of Indexa Capital, Toprural and Rentalia and investor in Seedrocket, has a quite negative view of the strategy, with some exceptions. “In general, what I ask is that the Government reduce obstacles and offer simpler regulation”, something that would not be being fulfilled in this case.
His vision coincides with that of different VCs that express a general disgust towards the political class, with little ‘feeling’ towards Francisco Polo, the high commissioner for Spain Entrepreneurial Nation, and the different centers created.
“The government is not able to select the best companies. This is how it is rewarding those startups that more or better ask for subsidies. Not those who look at customers,” says Derbaix. “There are many centers, accelerators and incubators. Many work and compete, but I do not think that it is the State that should organize it. What we find is that they are attracting more regulation, where in many cases we even have to consult with 2 or 3 lawyers to have a clear idea. ”
Founders and investors criticize the numerous centers and public aid programs, which in the end end up causing a part of the startup ecosystem to be too assisted.
Beyond the position regarding public investment, the sector values some proposals such as the issue of visas. A measure to facilitate international mobility and that does not entail an increase in spending.
Agustin Cuenca, founder of NeuroK and adjunct professor at IE Business School, also believes that the visa issue is positive, although he believes that what should exist are “open borders”, so that talent can move freely from one country to another.
As described by the Entrepreneurial Nation program, these visas will be aimed at “entrepreneurs who want to found or move their company to Spain, investors and professionals.” A visa for digital nomads will also be created, which includes freelancers, self-employed and remote workers. The particularities are not described, but it is reflected that it must provide the necessary safeguards to avoid fraud of the law. Asking investors in the sector, they explain to us that although procedures can be facilitated, in general there is a lot of international mobility.
He talks about attracting talent Adriana Freitas, investor in MusterVC and DeepGreenVC. As a connoisseur of the startup ecosystem in Barcelona, she explains that the diversity is enormous in this sector, where many of the leading startups are led by talent from abroad. And that is precisely why the issue of visas is so important.
When the different founders and investors review the current panorama, mobility and international talent play a leading role. There are visas for soccer players, but not for engineers and experts, they comment resignedly. In this sense, “a greater cultural commitment to startups is needed”, as Freitas explains. Not only because of the aspect of creation and promotion, but also because of the infrastructure, the firm commitment and public opinion, where the high salaries of qualified personnel are often criticized.
Diversity and international talent are two relevant factors of many startups and the new Government Strategy includes some requests such as the improvement of visas.
Among the different measures of Spain as an Entrepreneurial Nation is the creation of support programs, transparency offices, technology centers and public procurement of innovation. These are initiatives that help to promote small projects, but in the end they end up assuming a “sector dependent on aid”, as Derbaix describes. An orientation that is not what is needed, because “as a nation we need more competitive companies, not more assisted ones”.
These hubs produce another peculiarity and that is that the more offices, incubators and different programs, a differentiated ecosystem is generated in groups. That if those of the university hub, that if those of the national program, that if those associated with the city …, under the vision of investors like Freitas, it is necessary to go more to one and not create so many programs.
The sector does value initiatives to promote the presence of women in investment and STEM careers, indicating that the degree of diversity is usually a reflection of a good competitive level.
Javier Jimenez, CEO of Lanzadera, Juan Roig’s business accelerator, states that “in relation to the area of talent and entrepreneurial culture, it is essential to facilitate the attraction of international talent removing barriers, adding incentives and reducing bureaucracy. In addition, the figure of the employer should be valued, as a generator of wealth and employment, and therefore of well-being “.
From ‘stock options’ to the time limit to pay
The ‘stock options’ is another topic that is touched on in the program. A matter that the sector considers among the worst in Europe. The Government proposes to modify this matter, promoting the delivery of purchase options on shares as a form of remuneration. Something that to achieve this, the current tax treatment must be improved. This is a point that investors welcome.
Agustín Cuenca points to another challenge: oblige administrations to pay SMEs within 30 days of work and not of the invoice. From his point of view, the treatment must be simplified and the need to pay social security and taxes should be eliminated until there are no benefits.
For Jiménez, “within the fiscal measures, I would highlight the following proposals: establish a fixed withholding rate for directors or administrators based on their remuneration and not based on the company’s billing; and develop an exemption system in the transfer of participations of startups (for both natural and legal persons) similar to that enjoyed by venture capital entities “.
Regarding the labor area, the director of Lanzadera considers that “it would be interesting to articulate that the administrators who are registered as self-employed can also benefit from the flat rate for payment of fees. Furthermore, it would be interesting to encourage Corporates (large corporations) to integrate startups into their production chain and to simplify administrative burdens “.
The Strategy includes various tax improvements, including a promotion of ‘stock options’. Changes in the right direction, but insufficient for many small businesses.
The Entrepreneurial Nation Strategy includes some of the historical requests of the startup sector, such as the simplification of procedures or tax improvements. At the moment it is a program, without materializing in a Law or disclosing the specific details, but part of the main lines of ‘Entrepreneurial Nation’ are oriented towards that “streamlining” that founders and investors demand.
On the other hand, many of the measures of the Strategy are too generic, They point too much to the future and several of them continue to assume in practice an increase in public spending, something that the sector mostly sees as an action that instead of favoring competition and innovation, what it does is create startups that depend on you help them and not your clients.
Spain is in a second league within the European ecosystem, according to several founders. Clearly behind London, Paris or Berlin and without many options to reduce the distance. These measures are one more step to follow this path, but it does not seem that the sector considers them sufficient to become “the beacon for entrepreneurs” that the Government has promised.