Small and medium-sized enterprises are often the focus of analyzes and measures by European national and supranational authorities due to the importance they hold in terms of employment and economic growth. The European Commission has urged to encourage their creation, especially by stimulating and facilitating youth entrepreneurship.
In the context of SMEs, more and more attention is paid to startups, companies that are often (but not always) guided
by young entrepreneurs. Even if it is not easy to measure, the contribution that startups provide to economic growth and job creation seems to be substantial: it is estimated that those that survive in the five years following their establishment create between 21 and 52% of the total work in the related segment, depending on the countries in which they operate.
Among the factors that allow the survival and development of startups, the presence of adequate sources of financing is crucial. For start-ups in the start-up phase, the banking channel is often precluded, above all due to the absence of a financial track record which makes the loan difficult to reconcile with prudential regulations.
Equity financing appears to be growing: in 2016 the amount of new investments by EIF1, the body that facilitates loans to SMEs on behalf of the main European institutions, increased by 45% (to €3 billion) and guarantees lent by 31% (to €6 bn).
Even greater increases concerned the amounts raised by private investors thanks to the carryover effect generated by the presence of a highly reputable institution among the lenders: +88% (to €19 bn) and +42% (to €24 bn) for the contribution of equity and guarantees respectively.
Venture capital is undoubtedly among the types of equity financing suitable for the first years of activity of startups. In 2016, investments of this type of loan increased by 12% both in Europe and in the United States: $4,7 billion raised in the Old Continent against $67 in the United States; in Italy the amount is $97 million, €46 million more than in 2015.
In Italy, the Startup Act launched at the end of 2012 by the MISE has established a series of incentives and concessions, especially for innovative companies. About four years later, the sector records positive results in terms of number and employees: last September there were 7.854 companies registered (+23% y/y) and around 40.000 employees between shareholders and employees. The support from the Central Guarantee Fund is also important, from which 1.784 startups have so far benefited for an average loan of €242 thousand.
