Is the slashing of ENISA critical, and do we need government support in building tech startups?
Recently news broke that the acting Spanish government reduces the budgets to parts of the ENISA funds (the EBT line) by 91%. As you may know, these kinds of equity loans targeted at technology startups has been of great help for many young companies the last years.
Is the cut in the línea EBT fund (specifically for tech startups) from €20.4 to €1.7 million a sign to Spanish startups that the government is no longer backing this part of the sector?
The startup community in Barcelona and Madrid has been raging the last days over what seems like a strange decision, but how much will less ENISA funding affect the evolution of new companies?
The CEO of itnig venture builder and Camaloon, Bernat Farrero, believes the success of a company does not depend on government funding, but acknowledges that ENISA funding has been very important for many entrepreneurs:
“ENISA is actually one of the government initiatives that has been working, in comparison with other less successful attempts. So the signals the acting government is sending with these cuts are not good.”
Also Pau Fernandez, head of corporate development at itnig finds the latest news depressing:
“The cutback is certainly not good news for the entrepreneurial world. We do not know the real reason for why it has been decided to reduce this budget, especially in times where there are negotiations for the configuration of the new government that could take months.”
ENISA is not dead
After the news broke this week, ENISA tried to reassure that their fund still will benefit tons of startups in the future, also with these cutbacks.
And ENISA have a point, the total amount of the fund will still amount to €82.6 million that will be spent on entrepreneurs.
There’s no secret that itnig has a great relationship to ENISA and several of our startups have gotten support over the years.
“We praise them for what they have done for the Spanish economy, turning the focus from sangria and sand, towards technology,” says CEO Bernat.
It’s also worth noting that the EBT fund is not the most used fund for young startups, according to Pau:
“Our experience shows that most startups apply to other ENISA funds than the EBT. The “Jóvenes emprendedores” for first-timers and “Competitividad” for startups that already have an important track record in terms of revenues and investment”.
However, the startup ecosystems are growing all over Spain, so can we afford to downgrade our efforts to boost it even further?
In the end, the young suffers
Startups have created and are still creating thousands of jobs for Spanish young people, and are attracting talent from all over the world. Recent numbers show that record many young people are leaving the country, and the late decisions will at least not make these numbers better.
“Funding or no funding from the government, startups with a good idea will always succeed in getting financial support. But for Spain as a whole, this represents something bigger,” says CEO Bernat.
The group that will suffer the most from such poor government decisions as we’ve seen this last week, are the up-and-coming youth, looking for a job, and a reason to stay in Spain.
The startups itself may not be in critical need of the government, and the best ideas will always get funded (also by ENISA). However, if Spain wants to heal its wounds, supporting young technology companies might just be the right medicine.
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