Equifund Athens. Two words which signal an unprecedented development for Greek startups, the country itself and all of the East Mediterranean. Proof if ever it was needed (it isn’t) that investment is alive and kicking here.
You may wonder why we would want to make noise about it. After all, doesn’t it mean more competition for an early stage investor like ourselves at Starttech Ventures? Well, some may see it that way. We do not. I’ll explain why later.
First, let’s take a look at the recent “Save the Date” announcement for the Equifund Athens 2018 event which is scheduled for April 16. And what it means for Greece and the Eastern Mediterranean region at large (with the exception of Israel). Because for entrepreneurs and investors – especially US-based investors, it is a significant development.
Equifund Athens 2018
This blog has continuously been banging the drum about the fact that despite the ongoing financial crisis, Greece is still a dark horse for startup investment opportunities. And this is why we welcome the arrival of Equifund Athens 2018.
The simple reason is that this development puts Athens back on the investment map. More than that, though, it propels our historic and vibrant city to the epicenter of the regional investment and entrepreneurship ecosystem.
For us here at Starttech, our US-based investors will quite rightly look to the Equifund as a marker. A sign of having confidence in our region. They will know now that they are not taking any huge risks here, because they are following a sizable private institutional investor such as the EIF.
Show me the money – a breakdown
So, what about the Equifund, this new fund-of-funds then? Well, for one, it’s mere existence is a massive boost for Greek startups. It means that for a historic first time, they can count on a huge influx of capital to help scale up its operations.
A total of 260 million euros is coming “our” way to establish new companies, as well as support existing investment firms. The scouting for new talent and experienced entrepreneurs ready to scale their businesses has already been set in motion.
Let’s put a few things into perspective in terms of numbers. The EquiFund is bigger than the total of cash invested in Greek startups in the past seven years, according to ta recent report from Found.ation. And this does not include the private capital that will be raised and deployed by fund managers in addition.
Generally, the anticipation is that around 400 million euros will be injected into the Greek tech scene over the next few years. How about that?
The fear
Obviously this is a lot of capital for a relatively small entrepreneurial ecosystem. And while there’s much rejoicing among would-be founders seeing euro signs in their eyes, there is also the fear. The fear that the Equifund Athens will eventually have a perverse effect. After all, it’s not something we haven’t seen before. Ever since Greece joined the European family in 1981, huge sums of money have come in with spectacularly negative results. Across all sectors of the economy. A clear case of sleeping with the enemy.
And the questions going through people’s minds are:
- Are there sufficient emerging founders with ideas good (or great) enough with healthy doses of work ethic and ambition to match. Will the pipeline fill up with sustainable startups?
- Does the country have sufficient intelligent investors to act as fund managers? People capable of building a track record that’s strong enough to ensure a follow-up of private and/or public capital injections?
- Finally, is throwing money at the Athens’ and Greece’s systemic challenges enough in order to sidestep them?
The jury is well and truly still out. And, as always, time and experience will provide all the answers. It is, I would say, make or break time for the Greek capital’s investment managers and entrepreneurs. We’ve got the next 5-7 years to get it right. And make Athens the new…. well, Athens!
Follow the money
One thing we are sure about is this. Just like Dorothy followed the Yellow Brick road to get to that Wonderful Wizard of Oz, investors from overseas – especially the US – shall follow the Equifund Athens to our doorstep.
An that can only be a great thing for ourselves at Starttech. Because in short, we are not competing with the EquiFund Athens fund-of-funds. Conversely, we have a completely complementary strategy, at exactly the point where our very own location is becoming the center of regional developments. So the way we see it, US-based investors will see Equifund Athens as a seal of approval. It will bring the confidence that should really already exist.
And for ourselves, this new wave of money and interest around it is the big wave on which we can ride. If we catch it right, we can multiply the exceptional value we already create for our investors. With a healthy dose of capital efficiency and minimum capital loss ratio thrown in.
Our board is waxed and we’re ready to hit the water!
