Entrepreneurship Review 2016

The Spanish entrepreneurs are now playing in the Premier league

  • The concept of entrepreneurship as a viable career option, generator of wealth and employment has consolidated and been legitimized this year. 51% of entrepreneurs are serial entrepreneurs and 21% of Startups employ teams of 5 to 10 people.
  • Greater entrepreneurial ambition: Number of Startups that expect their revenue to bebetween 150,000 and 500,000 euros in 2016, is triple the number who earned revenue in that range during 2015. Founder´s top priorities are: funding, visibility, strategic partnerships, customers andattracting talent.
  • Pursuing a business opportunity is the number one reason giving by Founders for launchinga startup in Spain. Only 1% startupswere founded out of necessity, i.e. lack of employment alternatives. In Spain, the typical profile of the entrepreneur is a Male, 34 years old, with a university education (97%), Engineeringin 45% of cases. Women represent only 17% of Startup Founders and tend to see a startup as a means to accelerate their career.
  • The reduction inTaxes and Fees for startups, facilitation ofthe access to financial funds, improvement in tax benefits for investors and flexibility in staffing are the main regulatory improvements that entrepreneursare seeking from the next government.
  • 'The Disruptor's Playground' is the title of the ambitious program of South Summit 2016, taking place in Madrid's LA N@VE, from 5 to 7 October. An annual event organized by Spain Startup and Foundation IE - IE Business School, in collaboration with Endesa, BStartup of Banco Sabadell, Orange and Google for Entrepreneurs.

Madrid, September 7th, 2016. In 2015 more than 2,500 startups were founded in Spain, according to Startupxplore. Among these startupsare disruptive ideas that are responding to new needs in areas such as food, health, new media, finance, fashion, energy, education or travel. But what makesthese startups unique? What do they offer? Who are the founders that start them? What is in their DNA?

To answer these questions, to see how entrepreneurship has changed in Spain in the last year and to analyze the profile of the entrepreneur in our country, Spain Startuppresented it´s ENTREPRENEURSHIP REVIEW 2016,today in Madrid. To develop this report, data from the more than 3,160 projects submitted to the South Summit Startup Competition was taken into account. This is the highest figure reached in all editions. 61% of Startup entries came from Spain, 20% from Latam, 11% from Europe and 8% from other countries.

After comparing the data of the projects, one of the main conclusions wasthat entrepreneurship in Spain continues to be a key generator of employment. The average number of employees in the Spanish startups has increased and 21% Startups now have a team of 5-10 employees (5% more than in 2015).

51 % of entrepreneurs have launched a Startup previously and 5% have created more than five Startups throughout their career. In fact, entrepreneurship in Spain is becoming an employment option which people choose to undertake necessity: only 1% of entrepreneurs were previously unemployed and 56% worked previously for others. Also, according to the data analyzed, the main reason for starting a project is none other than having seen a real business opportunity, according to the affirmation of 8 out of 10 entrepreneurs.

Also, entrepreneurs are increasingly ambitious. The number of companies that expect to invoice between 150,000 and 500,000 euros at the end of this year has tripled, compared with 5 % that managed to reach this figure in 2015. Within Spain half of existing startups are focused on the services segment, while in Europe the main focus is software.

To implement these projects, more than half of entrepreneurs use their own resources initially, so it is not surprising that funding remains the main challenge they face. However, in Spain the startup financing model is steadily becoming more professionaland 19% of the resources now come from private funds, bank loans and crowdfunding.

But it is not the only objective pursued by entrepreneurs, 7 out of 10 are concerned about generating visibility for their project, gaining strategic partners or new customers and 40% are also interested in attracting talent.

These new concerns show, according to María Benjumea, founder of Spain Startup-South Summit, that “the mentality of the Spanish entrepreneur is slowly changing and they are not just looking for capital. The growing interest of leading corporations to attract new ideas is forcing entrepreneurs to react, forge strategic partnerships or work to ensure that they have top professionalsin their teams.”

Profile of the entrepreneur

In Spain, those who decide to create a startup are: men of 34 years old with a university education (97%), specifically engineers in 45% of cases.; while women represent only 17% of the projects submitted, the same percentage as last year. Women decide to become Entrepreneurs in orderto change of direction in their career in 23% of cases, compared with only 15% of men.

In addition, startups led by women have a lower rate of failure, specifically only 48% failed compared to 66% of men’s startups. Maybe,women entrepreneurs are more conservative in managing the resources available to them. Depending on the results obtained, startups with only women founders tend to request larger amounts of funding (half of them requested between 50,000 and 500,000 euros), and they are more cautious in estimating their income, since 30% expect to invoice less than 50,000euros.

From Startups to Scaleups

Is there an opportunity in Spain to strengthen the transition from entrepreneur to large scale enterprise? If we consider the level of development, half of these projects are between one and three years old and only 17% of the Spanish initiatives have already reached the stage 'growth'.

This short term vision, which seeks to get results quickly, explains that 62% of the initiatives have failed, while 1 in 4 has been sold. Is sale of a Startup synonymous with success? Does this perception need to be changed, as it does not allow us to create long term profitable businesses and our entrepreneurs risk becomingexperts in creating projects but not developing businesses.

The Government has a leading role to play here because it is responsible, as perentrepreneur’s perception, of implementation of changes in the scope of regulation to facilitate the process of developing a new idea. For 73%, the main improvement is to reduce taxes and fees required by startups and 7 out of 10, also see as a need for improvement in how the government can facilitate access to affordable funds. In addition, 41% believe we requireadditional tax benefits and flexibility in hiring.

South Summit 2016

The 100 finalists startups, selected from more than 3,000 projects submitted to the Startup Competition, will have the opportunity to have their own space during South Summit 2016, which will be held in Madrid at the municipal space LA N@VE from 5th to 7thof October. The program of this edition, entitled 'The Disruptor's Playground', applies to new disruptive technologies that impact on major industries: Fintech & Insurance, Industry & Energy, Media & Entertainment, Food, Travel, Fashion, Beauty & Lifestyle, Education, Health & Wellness.

The encounter, organized by Spain Startup and Foundation IE-IE Business School, in collaboration with Endesa, BStartup of Banco Sabadell and Google for Entrepreneurs, will bring together all stakeholders in the entrepreneurial ecosystem: startups, investors, institutions, companies and leading corporations. A space to bring out all the creativity that drives innovation and disruption to launch an idea, solve existing problems in different ways and generate new business spaces.

Also, more than 250 international speakers, as well as major investment funds and venture capital, business angels, institutions and national and international partners have already confirmed their attendance at South Summit.

Methodology file

Startup Spain has developed the Entrepreneurship Review 2016 starting from the3,160 projects submitted to the Startup Competition, the highest number reached in all editions. Specifically, 61% of them come from Spain, 20% from Latam, 11% from Europe and 8%from other countries. By region, the Community of Madrid leads the number of startups presented, with 43 %. Followed by Catalonia (20 %), Valencian Community and Andalusia (both 9%), then Galicia (with 4%) and, finally, Castilla and León, Basque Country and Extremadura (both 3%).

To get more information:

Communication Spain Startup Trescom Comunicación

Sandra Infante Florita Vallcaneras / Isabel Gómez

915 625 784 91 411 58 68/ 650 36 36 57

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