With the state investing three million euros in startups, the growth of such companies has been promoted, and their total contributions to the state budget now exceed 52 million. This is the conclusion of the study “Support that pays off” by the Latvian Startup Association.
The study describes a specific program that was financed by ALTUM and implemented by the fund
Imprimatur Capital. From 2013 to 2017, the fund granted 50,000-euro loans on preferential terms to 60 early-stage technology teams. Assessing the program’s return, it was concluded that every euro invested by the state has brought back more than 18 euros to the state budget.
These loans were also issued to several Latvian startup success stories, including Printify, Lokalise, Nordigen (now GoCardless), HackMotion, and Edurio.
“Statistics show that the number of startups in Latvia is stagnating. This is the moment when work must be done at the national level so that Latvia can catch up with neighboring countries and not fall behind the rest of Europe. The program examined in the study demonstrates one way to achieve this – by creating a well-considered, strategic, and professionally administered support instrument that can become a launchpad for the next Latvian unicorn,” emphasizes the association’s Executive Director, Roberts Alhimionoks.
As part of the study, entrepreneurs who received pre-seed funding were also surveyed. Almost all respondents stressed that this support was crucial precisely at the early development stage, when, without external funding, a startup idea often never reaches the market. The funding made it possible to develop initial products, test business models, attract the first customers, and prepare for raising investment.
“This study highlights one of the most successful startup support initiatives implemented in Latvia. Early-stage support, even if it seems risky at first, can create very substantial long-term benefits for the economy. If we want there to be more startups in Latvia in the future, we have the opportunity to learn from this experience and replicate this successful instrument,” says Edurio co-founder Ernests Jenavs.
Originally published at https://inc-baltics.com/valsts-ieguldijumus-jaunuznemumos-atguvusi-ar-uzviju/
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