Innovation and future in the world of Venture Capital and start-ups

December 28th, 2018

On 6 December 2018 the Italian Industry article reported some issues related to the current situation of Venture Capital and start-ups in Italy. The limits highlighted with regard to the drive for innovation and the future of Italian industry, and beyond, are common to factors and issues that we have always considered some of the main topics dealing with the meeting between Capital (investors, venture) and Ideas (start-ups, SMEs).

Innovation presents itself at this juncture as a complex challenge, which does not only involve the actors of this world or the skills they bring with them, but rather the tools available to them and even more the system on which they are based. in the way of building and doing business. Start-ups in Italy are increasing, and often in most cases they support high quality ideas and projects. Despite this, there is still a high mortality of the same in the process of landing on the market.

For some time now it has been repeated that investors are lacking and that adequate culture is lacking. The number of innovative startups, their employees and the value of production are increasing – stated in the last Annual Report of the Minister to Parliament on the Italian Startup Act – but there continues to be a problem of size and growth, which is intertwined with that of the investments in venture capital, further and further from other European countries. The Belpaese is full of ideas and there is a liveliness in the proposition of new business models. Liquidity is not lacking, system resources do exist, but we struggle to create efficient interactions between all those who must necessarily be involved throughout the entire life cycle of the process “.

If we analyze the factors involved in the development process, we highlight some of the needs to be met, both on the start-ups side, and that of investors and incubators. Attention must necessarily be placed on questioning the models of development, in defining the minimum size necessary to compete in the market, in the constant evolution of the market and, above all, in the rediscovery and revaluation of each role and function in building and doing business.

Currently, start-ups and SMEs (then) are both partially culturally unprepared and not supported enough in this growth path: the pressure of investors to growth through the weight of their capital together with a little support and / or insufficient supervision by incubators often lead to the defocusing of the team involved in the development of the idea, very often due to the lack of adequate managerial skills (having a bright idea is one thing, building around a company is another).

We need great managerial skills and extreme focus on business models. Large companies interested in opening up to new entrepreneurial and business realities. It is a scenario that can set in motion win-win relationships: on the one hand the incubators that acquire valuable know-how, on the other the people who bring new ideas that have the opportunity to leverage the company’s assets, thus creating the conditions for sustainable growth both in terms of organization and turnover”.

If the poor managerial skills, or an inadequate coaching, turn out to be critical factors for the growth of the start-ups, as are the weak economic incentive and the practically non-existent relationship with the investors regarding the incubators. The latter in fact find themselves having to comply with a period of support that is often too short (3-6 months) in order to be able to carry out an appropriate action of coaching and managerial development, since there are no adequate economic incentives to prepare a growth path for start-ups. up directed to success.

If the life of start-ups and incubators is not simple, we could also discuss from the point of view of who capital invests it by betting on ideas: investors put their liquidity at stake, exposing themselves to a very high risk of loss, both due to of the already mentioned start-ups mortality rate (over 90%), both because the investment in start-up is illiquid, then blocked, for a period of no less than 3-5 years, all in the total absence of real tools for monitoring and controlling the development of projects available to investors.
Summing up, a vicious circle where the dog bites its tail: and this is where the SEED VENTURE platform is inserted, a “crypto” solution that allows us to tackle previously unsolvable problems. In a complex and scarcely protected context, SEED VENTURE represents an innovative platform, offered to the innovation ecosystem, able to overcome the above-mentioned problems and which also assumes the function of a monitoring tool: investors bet on ideas and can count on visibility of all that happens, incubators and start-ups operate in competition and in total transparency, and are subject only to the judgment of the market (the platform, remember, is not under the control of any entity, nor the promoters or developers).

Sources: _ 6 December 2018