Swiss Entrepreneurs Foundation: tailwind for startups and innovative SMEs
Relatively new businesses often have trouble raising capital in an advanced growth phase. A new kind of financing aims to help.
Switzerland is proud, and rightly so, of its multifaceted SME landscape. For all that, it is time to take action as we are seeing too many young enterprises migrate abroad after their foundation phase because of missing financing opportunities. It means that technological know-how and jobs are also going with them. Leading personalities from politics, business, and academia, including former federal councillor Johann N. Schneider-Ammann, agreed that this trend could not be allowed to continue and launched the Swiss Entrepreneurs Foundation. Based in Berne, the foundation has been under the patronage of Economics Minister Guy Parmelin since the beginning of 2019 and aims to support Swiss startups and innovative SMEs during their growth phase.
To do so, the Foundation implements specific projects to improve the overall conditions for young enterprises and innovative technologies while at the same time making expertise and networks available to young entrepreneurs via an international advisory board. Together with Credit Suisse and other partners, the Foundation also initiated the launch of a financing platform that makes venture and growth capital available for startups and innovative SMEs.
The financing portal on your doorstep
Mr. Denat, what prompted Credit Suisse to participate in the launch of such a financing platform?
Ever since it was founded by Alfred Escher, Credit Suisse has seen itself as the “bank for entrepreneurs” committed to sustainable growth. This specifically includes our commitment to providing young, innovative enterprises with access to growth capital. Alongside our longstanding activities as a venture capital provider, we have now created an additional platform for growth capital within Switzerland.
What companies can apply for financing?
The companies have to be able to demonstrate a certain amount of market acceptance, by which I mean their products or services will have been developed to market maturity, with a customer base already in place and with the companies themselves in an accelerated growth phase. Typically, these companies have evolved from their startup status. Our target companies will have entered an advanced growth phase.
Is it necessary for the companies to already have positive cash flows?
No, not really. But identifiable and plausible prerequisites for positive cash flows must be in place, of course.
Our goal is to develop close links with companies at an advanced stage of growth.
Is it really the case that promising companies in this development phase can’t be sure of obtaining funding? That’s astonishing for a financial center as strong as Switzerland …
Yes, you’re absolutely right. Studies show that most of the highest-profile funding rounds in recent years for growth companies in Switzerland have only succeeded thanks to capital from abroad. It’s a real shame that successful startups like the ones emerging from the Swiss Federal Institutes of Technology in Zurich (ETH) or Lausanne (EPFL) have no choice but to raise foreign capital or else emigrate once they have reached a certain size.
Is capital all it takes to steer these companies toward success?
No. Most growth phases are complex, with many new challenges having to be overcome simultaneously. This is why companies need to be assisted during this phase. They are provided with access to a network that incorporates highly qualified advisory board members in their capacity as representatives of the Swiss Entrepreneurs Foundation. Entrepreneurs benefit from the experts’ collective business expertise, mentoring, and operational coaching.