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What do Polish startups lack?

According to startup founders, the biggest barrier to growth in Poland is obtaining funding. It is estimated that the capital gap on the Vistula is already as high as several hundred billion zlotys. Which industries are most underfinanced? Can acceleration programmes be the answer to startups’ difficulties in obtaining funding?

– The equity gap is not a new phenomenon, especially for startups in the early stages of development. One could say that it is normal when more projects are created than there is capital to fund them, and only the best ones will defend themselves. The problem is that we are in an extremely difficult period right now, so even very good projects may not survive. In order to fully exploit the potential of the Polish start-up ecosystem, it is necessary to support entrepreneurs in the process of obtaining funding – on the one hand by supplementing the private market with public money, and on the other by ensuring a high level of acceleration programmes, says Tomasz Snażyk, president of the Startup Poland Foundation, which, in cooperation with the Warsaw Stock Exchange and the National Centre for Research and Development, has just published a report on the phenomenon of the equity gap in Poland. The study also contains an analysis of the potential of acceleration as an answer to the problems of raising finance by startups.

Industries that lack money

VC funds have become more selective when it comes to choosing companies for investment – they verify in more detail and rigorously how well the value proposition developed by a given company corresponds to the real needs of the market. This, among other reasons, is why some industries – despite being based on cutting-edge technological solutions – are underfunded.

A survey of 300 start-ups shows that founders consider education to be the most underfunded (22 per cent of indications). In their opinion, companies representing the following industries are also severely underfunded: GreenTech/CleanTech (16 per cent), hardware (16 per cent), AgroTech (16 per cent), MedTech (14 per cent), Industry 4.0 (12 per cent) or life science (12 per cent).

Underfunded projects that have potential but fail to attract investors can be helped by the public sector. Experience has shown that securing public capital strengthens the position of startups in their search for further investors.

To date, public sector involvement has helped many Polish technology companies to mature and successfully commercialise their products. Still, it is public funds that are most often present in the early stages of technology projects. This is why the public sector is, in a way, a natural initiator of activities when it comes to filling the equity gap, both in terms of strictly financial and industry terms, i.e. financing sectors in which private investors are less interested,” says Błażej Koczetkow, director of the equity funds department at NCRD. With the new instrument, the Centre wants to invest its own funds and those of private investors in innovative, technological companies at early stages of development with a predominance of projects from the so-called capital-intensive areas.