A number of years ago, access to capital (money) represented one of the top 3 main causes for the low number of startups (entrepreneurial intiatives) in Romania.
Press forward a decade later and some more than 1.5 Billion Euro (most of it, EU funds) invested by the State in grants for tens of thousands of startups, access to capital is no longer a top problem. New challenges, yet to be properly tackled, take precedence like digitalisation, bureaucracy, lack of predictability, fluctuations on the market and so on.
Some highlights of this decade
2011-2014 State support for SRL-debutante: grants, loans, tax waivers
Ten years ago, the Romanian State made the first timid (or shall we say prudent) attempts to support startups. The SRL-Debutant legal concept was launched (SRL-D meant a company created by a first-time-business owner and it was defined in Government Ordinance 6/2011), accompanied by some governmental facilities, such as:
- mixed grant & loan scheme (Eur 10 k grant * 50% business investment + optional partially subsidised loan toc over the rest of the costs)
- some salary contribution waivers
- company registration tax waivers
Post 2015 – State grants for startups in rural areas
- Around 1900 non-agricultural startups were launched in rural areas with EU subsidies through submeasure 6.2. – National Programme for Rural Development 2014-2020.
- The budget spent was around 111 million Euro.
- The grant / startup was around Eur 50 k.
2017-2019 – Romania: a Startup Nation
The peak of this State & Startups partnership was, in my opionion, during 2017-2019 when Romania had available several public financing schemes for startups, thus providing tens of thousands of entrepreneurs the opportunity to get a subsidy (amounting from 25 k Eur to 44 k Eur, generally) to launch their startup in various field of economy:
POCU: Diaspora Startup & Romania Startup Plus & other schemes
- Training, mentorship, grants
- Average grant around 30-33 k Eur – seed capital (equipment, furniture, staff, taxes, operational costs, etc)
- Some 10 k new startups launched
- More than 11 k new jobs created
- More than 700 M Eur spent by State
- Top 10 business sectors: vehicle maintaince and support, leisure and entertainment, photography, beauty salons, software design, training, bread & pastry manufacturing, human health services, engineering and technical consultancy
- Urban businesses
Start Up Nation (only partially disbursed from EU funds)
Rural startups – non-agricultural businesses
- A new call for rural startup projects is about to be launched (Oct 2021) through Submeasure 6.2. of the National Rural Development Programe.
- Grants will be as high as 70 k Eur/project.
- Budget available is 50 M Eur.
- Priority to: Manufacturing, leisure and restaurants in highly competitive touristic areas, healthcare businesses
Social entreprises (economy) in rural areas
- Especially supported will be social entreprises in the food and agricultural processing sector
- Grants amount to a maximum of 200 K Eur, depending on the no of employees
- Support will include training, mentorship and subsidies
- Those interested may enroll and apply through grant administrators selected (11 organizations selected)
Innotech Student – Startups in tech for university undergraduate and MA students
- Startups (more than 6 months old but less than 4 years old) may be funded if they target certain competitive sectors in Romanian economy, specially tech
- Grants may amount to a maximum of 100 k Eur
- Support will include training, mentorship and subsidies
- Those interested may enroll and apply through grant administrators selected (list of organizations selected not yet published)
Innovation Norway
- Startups will be funded if they target innovation in green economy, blue economy, ICT
- Available budget: 200 k Eur
- Grants may range from 10 k Eur to 200 k Eur – maximum of 85% of business plan budget
- Grants may be spent on equipment, IT, licenses, research and innovation, staff, travel, etc
- Deadline: November 18, 2021
State & Startups: what kind of common future? State support should also become local.
Improvements & novelties in the next decade of EU funding
- Structural Funds EU budget 2021-2027 + Recovery and Resilience Facility
- Entrepreneurship, social economy, technology, research, innovation, digitalization
- Support such as training, internships and mentorships to be continued
- Grants vs financial instruments – the right mix is yet to be defined
- Extend EU funds to acceleration concepts fort startups and scaleups such as InnovX – the targeted applicants may be startups launched with State grants
- Launch of calls – 2023?
- Local public administration should be encouraged (including in EU Funded Programs) to become a more active actor in supporting local and regional start-up ecosystems
- Models have been tested through POCU Romania Start Up Plus and Diaspora Start Up schemes where local administration (even from small comunities) have partnered with private organisations to support entrepreneurs with training, mentorship and even grants.
- Other municipalities test innovative support mechanisms that can identify local talent, test and grow entrepreneurial initiatives – see The innovation and experiment Fund FixCluj.eu
- Feedback from Diaspora Start Up and Romania Start Up Plus should be collected and used to propose future instruments to support effective startup ecosystems, not just random initiatives
- Local state involvement in startup support makes sense: it might mean a more efficient, a truly complete support package, transitioning from mere training or money to administrative support: registration and permits, taxing facilities, bureaucratic support, access to education, talent & human resource, research and innovation.
Briefly: Fund and grow locally, innovate globally
