2015

ESM 2015

Initiator
German Startups Association

Authors
Prof. Dr. Tobias Kollmann, Dr. Christoph Stöckmann,
Jana Linstaedt, Julia Kensbock – University of Duisburg-Essen,
Department of Economics and Business Administration,
E-Business and E-Entrepreneurship Research Group

Technical Execution
Julian Bühler – ESCP Europe

Art Direction & Design

Björn Matthes (www.araproject.de), Judith Hettlage (www.judithhettlage.com)
Björn Wiegmann (www.wiegmann-design.de)

Acknowledgement
We thank all international associations, experts and supporters

ISBN
978-3-938338-16-2

Sponsors
Greetings from the Commissioner for digital economy and society ESM 2015

Greetings from
the European
Commissioner for
Digital Economy
and Society

We are all looking to Silicon Valley, to its vibrant track. We should not be carried away by a general
startup scene. No doubt, Silicon Valley is unique: feeling that startups are good, but be able to demon-
But we can do a lot to push Europe‘s ecosystem. strate how they are good and what they have achieved.
First of all, we need to be supported by the right In an increasingly connected economy, we also need
policies - the Digital Single Market is needed for to be able to connect initiatives – with people, with
them to grow and scale, and the environment technologies, with regions and with the development
should welcome failure as a learning experience. of the industry. Without having concrete indexes
Our legal regimes should be streamlined and based on which real decisions can be taken, we run
simpler to navigate for our startups. Hiring talent the risk taking the wrong turns. Toward this end,
from all over the EU should be simpler, as should it is a pleasure to welcome the European Startup
getting access to finance. Policies should be focus- Monitor. It is an effort toward reaching concrete
ed on achieving measurable results, and decisions goals, while at the same time acting as a motivation
made simpler to take by access to quality infor- for people who want to build their own future and
mation and data. If you can‘t measure it, you can‘t an excellent example for cooperation between
manage or understand it. We all realise the potential European startup-ecosystems.
of startups, their significance to the economy and
their role in education. It is very rewarding to see Günther H. Oettinger – European Commissioner
young people take the risk of starting their own com- for Digital Economy and Society
pany and learn so much about business processes.
Our continent becomes closer knit together when
people from different countries collaborate around
creative ideas. However, we need to focus on the
impact of startups, to make sure we stay on the right

3
ESM 2015

4
Overview of the 1st ESM ESM 2015

Overview
The European Startup Monitor (ESM) represents
more than 2,300 startups with more than 31,000
employees in all 28 European (13 in-depth
analysis) member states and further important
countries.

Startups are defined by 3 characteristics: Startups

are younger than 10 years. Startups feature
(highly) innovative technologies and/or business
models. Startups have or strive for a significant
employee and/or sales growth (definition of
startups, p. 15).

Objectives of the 1st ESM: To present the

development and significance of startups and to
understand European founders. To identify and
compare country-specific and common challenges
that startup ecosystems face in Europe. To foster
communication between European entrepreneurs.
5
ESM 2015 Facts from the 1st ESM

Facts from European

startups are
the 1st ESM job engines
European startups create
on average 12.9 jobs (incl.
founder/s) after 2.5 years.
Moreover, the average start-
up plans to add 6.8 more jobs
within the next 12 months.

Focus on
high-tech
Most startups in the Euro-
pean Startup Monitor
form part of the digital
economy.

Startups are
innovation
drivers
Almost 2/3 of the startups
in the European Startup Moni-
tor rate their products and/or
services as novel across the
European or global market.

6
Facts from the 1st ESM ESM 2015

Startups are ESM startups important current challenges

for European startups.
founded have raised
in teams € 2.5 million Bureaucracy
Most European founders ESM startups have raised on
& regulations
are between 25 – 34 years average € 2.5 million in external
Political expectations:
old. 14.7 % of the startup capital. As part of the growth
European founders hope for
founders in the ESM are process, startups plan to raise
more financial support and
female. an additional € 3.3 million in
improvements in political
external capital on average.
regulations and bureaucracy.
International
markets Satisfied & Room for
Positive improvement
More than half of all startups
already serve international
atmosphere
The European startup environ-
markets, with 8 out of 10
More than 90 % of startup ment is rated as satisfying, but
startups planning further
founders are satisfied with there is room for improvement
internationalisation in the
their present business and there are significant dif-
next 12 months.
situation: 72 % assume posi- ferences between countries.
tive business development
European over the next 6 months.

startups are
international Important
challenges
11.9 % of startup founders
and 31.6 % of their employees Sales/customer acquisition,
are from countries other than raising capital and product
the location of the startup. development are the most

7
ESM 2015 Introducing 8 European startup ecosystems

Introducing 8 mature SME market and many

corporate headquarters reside

European startup
in Brussels. Most other startup
hubs are 3 hours’ travel
distance away, so Belgium is

ecosystems considered the hotspot from

which to conquer Europe.

Karen Boers
Austria Belgium CEO Startups.be

Austria has a vibrant and fast gro- Belgium offers a high density
wing startup scene. Many co-work- of skilled entrepreneurs and Germany
ing spaces and networking events business people in areas such
are the perfect opportunity to find as healthcare, media, fintech, Germany is an economy in
the right team. The state provi- IT as well as creative industries which the “mittelstand” has a
des excellent financial support for and fashion tech. A wide variety longstanding tradition and an
startups & young entrepreneurs of experienced mentors and important meaning, especially
and offers its comprehensive ser- business angels are contributing in engineering and technology.
vices in 15 languages. Vienna with to a fast growing and maturing Furthermore, the German startup
its own startup festival (Pioneers startup ecosystem and entre- scene is full of potential, creating
Festival) is becoming a magnet preneurs have found a common highly qualified and forward-
for talent. The infrastructure voice through Startups.be. looking jobs, driving innovation
for startup founders is a perfect Startup.be has mapped out and growth across large sections of
combination of internationality 1,400 startups and scaleups, the German economy. In the face
and affordable living. Recent with Sirris, a local research of the digital transformation, the
exits and the new VC Speedin- centre. This is an estimated 40 information and communication
vest show that startups can find % of all startups in Belgium. technologies (ICT) sector is
the right investors in town. The country offers an gaining more importance in the
excellent test market for light of digital transformation.
Christoph Jeschke multi-language and multi- This trend is reflected in the
Co-Founder Austrian Startups stakeholder businesses, a high percentage of startups with

8
Introducing 8 European startup ecosystems ESM 2015

innovative business models in in an increasingly maturing record exits). Israel’s ecosystem

the digital economy. Against this startup ecosystem developing consists of smart, eager,
background, a Young Digital around Tel Aviv and Jerusalem. tech savvy, native speakers
Economy Advisory Board was Israel is ranked 1st in the of a variety of languages
established as part of the Digital world for innovative capacity including Spanish, Portuguese,
Economy Action Programme in 2014 by the IMD Global French, German, Italian, and
to strengthen the young digital Competitiveness Yearbook. Russian, are always around.
economy in Germany. The num- In 2014, a banner year Israel
ber of startup foundations has broke all records: over 70 public Noam Band
also grown over the last two years. issues of Israeli companies CEO Algomizer
This was a positive trend reversal for the total amount of 15
after decreasing or stagnating billion US dollars. The data
startup activities following a shows that Israeli startups Italy
boom period in the job market are being acquired faster than
around 2005/2006 (Metzger any other startups, and the Italy is an increasingly maturing
2015). The German startup average time between startup startup ecosystem developing
scene is located primarily in and acquisition stands at 3.95 around the city hubs of Rome
Berlin, Munich, the metropo- years. Furthermore, Israel is a and Milan. Abundant talent
litan region Rhein-Ruhr, highly rated country in being and energy in the startup
Hamburg and Stuttgart/Karls- trusted by investors, second pipelines, flowing from the
ruhe (Ripsas & Tröger 2015). only to the United States. On Italians’ innate creativity as
a per capita basis, the Israeli well as the financial crisis are
Prof. Dr. Tobias Kollmann hi­gh-tech and venture capital the main entrepreneurship
Young Digital Economy sectors were larger than in any behaviour changers. The youth
Advisory Board other country in the world. need help and education on
What’s even more surprising, what a startup is and how the
is that the Israeli hi­gh-tech venture business works. A public
Israel startup exit amounts increased registry of 4,000+ startups
by 980% over the past five years includes hundreds of agencies,
Israel is well known as “The to a record of $9.2 billion in consultancy firms and local
Startup Nation” with over 2014 (like Mobileye, Viber and SMBs. Recent directives from
4,000 startups operating mainly Waze are examples of recent the Bank of Italy cancelled many

9
ESM 2015 Introducing 8 European startup ecosystems

syndications and investment has more than 2,600 tech former European Commission
clubs who were covering the startups and with more than 44 Vice-President for the Digital
seed stage equity offering. Issues accelerators the Netherlands Agenda, closely collaborates
are over-regulation, excess has a unique proposition as with the 10+ tech hubs to
incubators, lack of accelerators, a ‘testbed’ and ‘launch pad’ make the Netherlands one of
lack of VC operators, while for international startups and scale the top three most attractive
research spin-offs are struggling ups. In this testbed a startup can startups ecosystems in Europe
to use their grants productively. find his problem solution fit and in one and a half year time.
Talented resources are test how well their product lands
competitively priced, quality of with its future customer base. Sigrid Johannisse
life is excellent and Italy leads The Ecosystem’s success stories Director Startup Delta
well in several markets, but there include a Startupbootcamp,
is room for more innovation. which is a global accelerator
Returning entrepreneurs can program now operating in more Spain
increase international practices than ten countries, and the
and help the ecosystem mature. first Dutch tech unicorn called Due to the crisis and the high
Adyen. Moreover, in 2015, Dutch rate of unemployment (50 % for
Gianmarco Carnovale startups raised 430 million euro young people), between 2012 and
President Roma Startup with a number of 150 deals, 2013 the term „entrepreneur“
and an average deal size of became trendy in Spain. A
2.85 million euro, placing the country where until then the most
Netherlands Netherlands at the third rank of preferred professional career was
the total amount of VC deals in public worker, suddenly was full
The Netherlands is a small Europe. To further enhance the with inexperienced founders.
country with big tech footprint. ecosystem’s global impact the This attracted to the growing
It all happens in 10+ innovation Dutch government launched the ecosystem good people without
hubs that are 90 minutes apart, StartupDelta initiative, which much experience but willing
giving entrepreneurs access is assigned to tackle challenges to put a lot of effort promoting
to one of the most highly edu- that hinder growth for startups initiatives that could help improve
cated, flexible and motivated and create favorable regulations. the sharing of knowledge,
workforces in Europe. The StartupDelta, led by Special and opportunistic people trying
Dutch startup ecosystem Envoy Ms. Neelie Kroes, to take advantage of these new

10
Introducing 8 European startup ecosystems ESM 2015

founders. In 2014 and 2015 the Stockholm, having produced six seed and series A. The limited
situation started to improve very unicorns to date, is the second communication between dif-
fast, in part because founders were most prolific tech hub globally ferent startup support organi-
gaining first hand experience, - beaten only by Silicon Valley. sations means there are many
and because some startups found Successful entrepreneurs are silos and not enough coherence
the winning formula of finding re-investing time and money in the ecosystem.
investment and clients outside into the many exciting start-
Spain but keep the development ups in various phases and the Nils-Erik Jansson
team there, where the quality of community is a vivid, tight-knit Co-Founder Swedish
living is high and the cost of one. Entrepreneurs and other Startup Association
living is low. An increasing stakeholders share knowledge
number of Spanish talent that and experience through several
had been working on startups different initiatives, like
outside Spain for a few years, recurring events and natural
started to come back, bringing meeting places. The pros of the
with them their expertise and Swedish ecosystem is that it is
the contacts. One of the main easy to start a company, capital
challenges for startups in Spain is ready and available with
are personal relations and family Angels and VCs congregating,
connections, making newcomers the country is filled with
in disadvantage regardless of the early adopters and we have
quality of their product or service. the fourth highest internet
rate in the world (94 % use the
Carmen Bermejo internet). We have top notch
CEO Spanish Startup Association programmers at good prices and
the flat organisations encourage
innovation and creativity in the
Sweden workplace. The cons are that,
especially in Stockholm, it is
Sweden is a mature ecosystem tough to find accommodation.
with hubs such as Stockholm, The taxes are high and there
Gothenburg, and Malmö. is also a funding gap between

11
ESM 2015

Contents

Greetings from the European Commissioner 2.7 Consequences of failure 31

for Digital Economy and Society 3
Overview of the 1st ESM 5 III. Industry, customers and markets 32
Facts from the 1st ESM 6 3.1 Industries and business models 33
Introducing 8 European startup ecosystems 8 3.2 Novelty of products and services 35
3.3 Customer groups 37
Motivation 14 3.4 Current markets and internationalisation 38
Definition of startups 15 3.5 Future markets and internationalisation 39
Academic framework 16
IV. Employment 42
I. Basic characteristics of European startups 18 4.1 Employment situation in startups 43
1.1 Location of startups and regional hubs 19 4.2 Employment situation by startup phase 44
1.2 Age of European startups 20 4.3 Planned recruitment 45
1.3 Developmental stage of European startups 21 4.4 Citizenship of employees 46
4.5 Startups and job training 47
II. Founders and teams 22
2.1 Gender of founders 23 V. Financing 48
2.2 Age of founders 24 5.1 Sources of financing 49
2.3 Citizenship of founders 25 5.2 Own savings as only source of finance 51
2.4 Founding in teams 26 5.3 Kinds of investors 52
2.5 Previous startup experience 28 5.4 Previous raising of capital 53
2.6 Development of previous startup 29 5.5 Planned raising of capital 54

12
 ESM 2015

VI. Economic situation, challenges

and expectations 56
6.1 Annual revenue in the last fiscal year 57
6.2 Evaluation of present business situation 58
6.3 Present versus future business situation 59
6.4 Future scenarios for European startups 60
6.5 Current challenges 61
6.6 Expectations about politics 62
6.7 The startup environment 64

Bibliography 67
Partner network 68
European Startup Network 70
International academic partners 71
Initiator 72
Academic lead 74
Sponsors 77
Endnotes 79
Contacts 80

13
ESM 2015 Motivation

Motivation

The European ecosystem as

a location for startups

Startups are important drivers of the Europe- examines European startups that pursue innova-
an economy. By creating new ventures, entre- tive business models. It evaluates entrepreneurial
preneurs generate new wealth, add products activities, motives and attitudes of entrepreneurs
or services to the market and create jobs. across European and other countries relevant to
the European ecosystem and startup landscape.
In the worldwide comparison however, Europe is The ESM explores the role of startups, their
lagging behind the global pace in terms of new busi- growth throughout Europe and national characte-
ness creation: Compared to Asia or North America, ristics that influence entrepreneurial activities.
where early-stage entrepreneurs make up around
13 % of the adult population, in the European Union The goals of the ESM are to assess the current si-
only 7,8 % of adults pursue early-stage entrepre- tuation of startups throughout Europe and selected
neurial activities (Global Entrepreneurship Monitor countries, to identify country-specific differences
2014). Moreover, according to a 2012 issue of The and common challenges. It also explores the future
Economist, European founders still focus very of European startups by noting current trends and
much on small businesses built primarily to ensure developments in the European startup ecosystem.
the livelihood of their founders (“corner shops,
hairdressers and so on”). Overall, the ESM aims to identify factors that
are crucial to fostering entrepreneurial activi-
In order to keep up with globalised markets how- ties throughout the European startup ecosys-
ever, Europe must foster innovative startups tem. The study may also encourage commu-
that positively contribute to European econo- nication between European entrepreneurs.
mies by creating products, services and jobs.
The European Startup Monitor (ESM) 2015

14
Definition of startups ESM 2015

Definition

Building a startup is a special form of business. promote innovative products or services, or exist
According to well-known Silicon Valley serial entre- primarily to secure the livelihood of founders,
preneur Steve Blank, a startup is “an organisation without a growth perspective (hairdresser example).
built to search for a repeatable and scalable In contrast to such “mice companies” that are
business model”. started to generate income but without ambition
to grow, the ESM conceives startups as “gazelle
Based on this concept, the European Startup Monitor companies”, meaning growing young ventures
only selected businesses with the following features that are built to create wealth (Aronsson 2004).
to participate:
So far, the startup concept is most often used
1. Startups younger than 10 years when talking about businesses in the digital
economy (as they make up the majority of startups),
2. Startups that feature (highly) innovative but there are also other industries in which
technologies and/or business models startups flourish, such as medical technology
or education. All of these kinds of startups are
3. Startups that have or strive for a taken into consideration in the ESM 2015.
significant employee and/or sales growth
The ESM provides a full-scale picture of the
A venture qualifies as a startup for the ESM when promising and high-potential new ventures in
the first point of definition above is met, along with Europe that are built to achieve growth and
one or both of the other two definition points. drive innovation in the following years.
The ESM’s definition differentiates startups from
conventional businesses and SMEs that do not

15
ESM 2015 Academic framework

Academic
framework

The academic framework of the ESM focuses

on established approaches to research on
entrepreneurial ecosystems and is based on the
Babson Entrepreneurship Ecosystem Project
(BEEP) by Daniel Isenberg (Isenberg 2010/2011).
Entrepreneurship ecosystems are characterised
by several impact factors on startup activities.
These include (Figure 1):

Policy – Government, regulatory framework, etc.

Finance – Financial capital in general,
venture capital, etc.
Culture – Societal norms, acceptance, etc.
Support – Financial support, advisory support, etc.
Human capital – Employment, professional
training, educational institutions, etc.
Markets – Customers, market perspectives, etc.

The ESM report evaluates the European startup

ecosystem with recourse to these central factors.
The six impact factors on startup activities and
the sections in which these issues are addressed
in this ESM report are displayed in Figure 1.

16
Academic framework ESM 2015

Policy
6.6 / 6.7

Markets er p er s p e c t
Finance
und ive
3.1 – 3.5 / 6.2 – 6.5 Fo 5.1 – 5.5 / 6.1
2.1 – 2.5

Entrepreneurship

4.1 – 4.5 / 6.5

Em e
ploy t iv
Human ee p erspec
Culture
capital
2.5 – 2.7 / 6.6 – 6.7

2.4 / 4.1 – 4.5

Support
5.1 / 5.3 / 6.5 – 6.6

Figure 1. Academic framework

17
ESM 2015

I. Basic
characteristics
of European
startups

18
1.1 Location of startups and regional hubs ESM 2015

Location of startups: The European Startup Monitor encompasses data from 2,365 startups from all 28
European member states and further important countries in the European startup ecosystem (e.g. Israel).
The map (Figure 2) shows all participating countries (light shading) and all countries for which we are
able to make detailed statements due to a sufficiently large sample of startups (dark shading). The 13 major
countries that are analysed in more detail in this report include Austria, Belgium, the Czech Republic,
France, Germany, Israel, Italy, the Netherlands, Poland, Romania, Spain, Sweden and the United Kingdom 1, 2.
The highest number of participating startups is located in Germany. Major regional hotspots represented
in the ESM are Berlin, London, Paris and Tel Aviv.

major ESM hotspots

ESM countries analysed in detail:

Austria
Belgium
Czech Republic
London Berlin
France
Germany
Israel Paris
Italy
Netherlands
Poland
Romania
Spain
Sweden Tel Aviv
United Kingdom

Figure 2. The European ecosystem / Countries analysed in the ESM 2015

19
ESM 2015 1.2 Age of European startups

Startups are on
average 2.5
1 29.0 %
years old 2
3
28.4 %
16.0 %
4 10.1 %
years (max) 5 6.2 %
6 3.8 %
The participating startups that were analysed were 7 2.7 %
on average 2.5 years old (Figure 3). The start- 8 2.0 %
9 1.1 %
ups that reflected the highest age on average were 10 0.8%
located in Sweden (5.3 years), followed by Spain
(3.8 years) and Belgium (3.7 years). The youngest
ventures were located in Romania (1.3 years) and
Italy (1.7 years).
Figure 4. Age ranges of startups (ESM overall)

ESM (overall) 2.5

Of the responding founders, 29.0 % stated that
Austria 2.5
their European venture was not more than a
Belgium 3.7
year old. Almost three-quarters (73.4 %) of the
Czech Republic 1.9
founders reported that their startup was no
France 2.9
more than three years old. Most of the startups
Germany 2.7
(83.5 %) were no more than four years old
Israel 2.4
(Figure 4).
Italy 1.7

Netherlands 2.3
There was a noticeable predominance of young
Poland 1.8
startups no more than a year old in the southern
Romania 1.3
ESM countries (Spain: 49.5 %, Italy: 43.7 %
Spain 3.8
and Israel: 32.5 %). We observe many of these
Sweden 5.3
very young startups in rather small economies
United Kingdom 2.3
as well (Israel: 32.5 %; Czech Republic: 39.3 %;
years 0 6 Romania: 36.7 %).

Figure 3. Average age of startups (ESM countries) 3

20
1.3 Developmental stage of European startups ESM 2015

Most ESM start-

48.5 %
ups are in the
startup stage

Startup stage: The startup is about to complete a marketable product and already generates its first revenue and/or customer value
Developmental stages: The model applied in

Growth stage: The startup has succeeded in creating a marketable product and achieves high sales/customer value growth.

Later stage: The startup is an established player and/or is planning to conduct trade/sale has succeeded in/is going public.
the ESM comprises five stages (Ripsas & Tröger
2015). As demonstrated (Figure 5), 21.2 % of
the ESM startups are in the seed stage, in which
founders are still developing their business idea
and have not yet generated any revenue.

Seed stage: The startup is in its conceptualisation stage and does not generate any revenue yet.

23.9 %
Most of the startups (48.5 %) are in the startup
stage and have succeeded in generating revenue.

Steady stage: The startup does not create significant sales/customer value growth
21.1 %

The third strongest category comprises startups

in the growth stage (23.9 %), where they have
reached market maturity and robust user and
revenue growth.

Only 1.6 % of the startups are in the later stage,

established in the market and likely to seek further
growth through a trade sale or an IPO. Lastly,
3.0 % of the study participants responded that their
startup has already reached the steady stage.
3.0 %

It is noticeable that Romanian (50.5 %) and Israeli

1.6 %

(43.4 %) startups have predominantly stated that

they are at the seed stage. Israel also features
a relatively high number of startups in the later
stage (6.6 %). Overall, startups in the ESM all Figure 5. Current developmental stages of
follow the same trend. startups (ESM overall)

21
ESM 2015

II. Founders
and teams

22
2.1 Gender of founders ESM 2015

14.7% of the startup 85.3 % of the European startup founders are male,
while 14.7 % are female. Considerable differences
founders in the ESM between countries (Figure 6) can be observed.

are female The countries indicating the highest percentage of

female founders are Sweden (33.3 %) and Romania
(28.1 %). The ESM sample did not include any
female founders (0.0 %) for the Czech Republic.

85.3 14.7 84.5 15.5 86.3 13.7 100 n.a. 73.3 26.7
% % % % % % % % %

ESM (overall) Austria Belgium Czech Republic France

87.1 12.9 86.1 13.9 86.5 13.5 86.2 13.8 84.2 15.8
% % % % % % % % % %

Germany Israel Italy Netherlands Poland

71.9 28.1 84.0 16.0 66.7 33.3 80.0 20.0

% % % % % % % %

Romania Spain Sweden United Kingdom

Figure 6. Gender of founders (ESM countries)

23
ESM 2015 2.2 Age of founders

Most European founders are

between 25 and 34 years old

The founders responding to the survey were on ave- countries such as Romania (68.8 %) and Poland (64.1 %).
rage 34.6 years old, with 14.3 % of the founders older Countries in which comparably many individuals deci-
than 45 years (Figure 7). ESM countries with a de to start a business in their advanced adult age (35–54
comparably high percentage of very young founders years) are Sweden (60.6 %), the Czech Republic (50.0 %)
(< 24 years) are Belgium (17.6 %), the United Kingdom and Spain (46.8 %). ESM countries with the highest
(15.0 %) and Italy (12.9 %). Individuals between 25 percentage of founders in the oldest age category
and 34 years often build startups in eastern ESM (> 55 years) are Israel (16.9 %) and Sweden (12.1 %).

ESM (overall) 8.2 48.2 29.3 11.5 2.8

Austria 5.8 57.5 25.0 10.8 0.8

Belgium 17,6 47.1 33.3 2.0 0.0

Czech Republic 4.5 36.4 40.9 9.1 9.1

France 8.9 51.1 22.2 11.1 6.7

Germany 6.7 47.9 31.4 12.0 1.9

Israel 0.0 45.1 18.3 19.7 16.9

Italy 12.9 49.5 23.6 10.8 3.2

Netherlands 10.3 55.2 10.3 17.2 6.9

Poland 12.8 64.1 20.5 2.6 0.0

Romania 3.1 68.8 25.0 3.1 0.0

Spain 8.5 43.6 36.2 10.6 1.1

Sweden 6.1 21.2 36.4 24.2 12.1

United Kingdom 15.0 40.0 31.6 11.7 1.7

0% 25 % 50 % 75 % 100 %

< 24 years 25 – 34 years 35-44 years 45-54 years > 55 years

Figure 7. Age ranges (ESM countries)

24
2.3 Citizenship of founders ESM 2015

Most of the European founders come from their

country of residence (88.1 %), while 7.6 % of the
Most startups are
founders come from other European countries and founded by residents,
4.3 % come from non-European countries. There are
differences between gender with respect to origin.
but there is a significant
While 89.4 % of the male founders come from their influence of founders
country of residence, 83.8 % of the female founders
are citizens of the country their startup is located in.
from different EU and
Compared to only 6.7 % of the male founders, 10.8 % non-EU countries
of the female founders come from other European

ESM (overall) 88.1 7.6 4.3

male 89.4 6.7 3.8

female 83.8 10.8 5.4

Austria 80.8 14.2 5.0

Belgium 86.3 9.8 3.9

Czech Republic 72.7 9.1 18.2

France 88.9 2.2 8.9

Germany 88.1 7.6 4.3

Israel 95.8 0.0 4.2

Italy 97.8 1.6 0.5

Netherlands 75.9 13.8 10.3

Poland 94.9 3.8 1.3

Romania 93.7 6.3 0.0

Spain 87.2 6.4 6.4

Sweden 81.8 6.1 12.1

United Kingdom 66.7 25.0 8.3

0% 25 % 50 % 75 % 100 %

same country EU country citizenship Non-EU country citizenship

Figure 8. Citizenship and gender (ESM countries)

25
ESM 2015 2.4 Founding in teams

countries. Compared to 3.8 % of the male founders,

79.7 %
79.1 %
5.4 % of the female founders come from non-EU
countries (Figure 8). The northern ESM coun-
tries feature a relatively high rate of founders
from non-EU countries (United Kingdom: 8.3 %;

67.6 %
Netherlands: 10.3 %; Sweden: 12.1 %). Among these
countries, the United Kingdom and the Netherlands
comprise a relatively high rate of founders from
other EU countries (25.0 % and 13.8 % respectively).
In contrast, two southern ESM countries indicate
the highest rate of founder from the same country
of residence (Israel: 95.8 %; Italy: 97. 8%).

The majority of
startups are founded

32.4 %
in teams 20.9 %

Most (79.1 %) of the founders responded that they 20.3 %

started their venture as part of a team. Only 20.9 %
stated that they founded their startup on their own
(Figure 9). While founders from northern ESM
countries preferred to begin their startups alone
(United Kingdom: 29.7 %; Netherlands: 29.7 %;
Sweden: 26.8 %) southern ESM countries preferred
female
male

to start their businesses in teams (Italy: 88.6 %;

all

Israel: 87.5 %; Spain: 82.1 %). Just over a third (36.3 %)

of the participants stated that they founded their In team Alone

venture in a team of two. Almost a quarter (24.4 %)

of the founders started their venture in a team of Figure 9. Founding in teams by gender (ESM overall)

26
2.4 Founding in teams ESM 2015

three, while 18.4 % founded their venture in a team of four or more people. The average team size is 2.7 indi-
viduals in the ESM countries. The largest average founding team size is indicated by Italy (3.1 team members
on average). The smallest teams are found in Belgium (Figure 10), the Netherlands and the Czech Republic
(2.2 team members). A larger percentage of female founders (32.4 %) preferred to start their business alone,
compared to only 20.3 % of the male founders.

ESM (overall) 2.7

Austria 2.5

Belgium 2.2

Czech Republic 2.2

France 2.8

Germany 2.4

Israel 2.7

Italy 3.1

Netherlands 2.2

Poland 2.4

Romania 2.3

Spain 3.0

Sweden 2.8

United Kingdom 2.4

founders 0 3

Figure 10. Average number of founders (ESM countries)

27
ESM 2015 2.5 Previous startup experience

4.2 %
%
2.5

7%

.
11

While the current

startup is the first one
founded in most cases,
a significant rate of
founders have previous
22.6

startup experience
%

%
.0
59
0

>3

Figure 11. Number of previously founded startups (ESM overall)

Of the founders, 41.0 % reported that they already large proportion of all founders with previous
began at least one other startup before they started startup experience (9.8 %).
their current business. About 18 % founded 2 or
more startups before (Figure 11). The smallest percentage of founders with startup
experience comes from Belgium (4.1 % of all ESM
Most of the founders with previous startup expe- founders with previous startup experience), followed
rience come from the Czech Republic (10.7 % of all by Germany (5.1 %).
ESM founders with previous startup experience).
Founders from the United Kingdom also form a

28
2.6 Development of previous startup ESM 2015

Relationship to the previous startup: Most founders (Figure 12 and Table 1). In detail, founders
(37.0 %) stated that they are still shareholders and from the northern ESM countries most often stated
that the venture still exists as an independent unit. that they sold their last company (Netherlands:
A slightly smaller percentage of founders (28.3 %) 23.1 %; Sweden: 20.0 %; United Kingdom: 18.2 %).
responded that the business operations of their Founders from larger economies tended to respond
former startup were discontinued voluntarily, follo- that they sold their last company (France: 21.4 %;
wed by founders who sold their company completely United Kingdom: 18.2 %; Germany: 15.5 %). Coun-
(16.0 %). Lastly, 14.2 % of the participants were tries with smaller economies showed the lowest rate
shareholders and left while the venture still exists. of insolvency (Israel: 3.6 %; Czech Republic: 0.0 %;
Only 4.5 % of the founders stated that business Romania: 0.0 %).
operations were discontinued due to insolvency

My last company was

sold completely 16.
0%

%
.3
28

I was a shareholder and

left the company, but
the company still exists

Starting a new

14.2 %
company does not
I am still a shareholder and
the company still exists as

imply that previous

an independent unit

The business operations attempts were

4.5 %

had to be discontinued due

to insolvency
unsuccessful

The business operations were

discontinued voluntarily

37.0 %

Figure 12. What happened to your last startup? (ESM overall)

29
ESM 2015 2.6 Development of previous startup

Business operations
ESM (overall) Still a shareholder
discontinued voluntarily
Company sold

Business operations
Austria Still a shareholder
discontinued voluntarily
Company sold

Business operations
Belgium Still a shareholder Company sold
discontinued voluntarily

Business operations
Czech Republic Still a shareholder Left the company
discontinued voluntarily

France Still a shareholder Company sold Left the company

Business operations
Germany Still a shareholder
discontinued voluntarily
Company sold

Business operations
Israel discontinued voluntarily
Still a shareholder Company sold

Business operations
Italy Still a shareholder Left the company
discontinued voluntarily

Business operations
Netherlands discontinued voluntarily
Company sold Still a shareholder

Poland Still a shareholder Insolvency Company sold

Business operations
Romania discontinued voluntarily
Still a shareholder Left the company

Business operations
Spain Still a shareholder Company sold
discontinued voluntarily

Business operations
Sweden Still a shareholder Company sold
discontinued voluntarily

Business operations
United Kingdom Still a shareholder
discontinued voluntarily
Company sold

„
Table 1. Top 3 responses to the question What happened with your last startup“

30
2.7 Consequences of failure ESM 2015

Failing with the The founders were asked what they would do if they failed. The largest
response category (69.9 %) comprises the statement that the founder
current business would found another startup in case of failure, while 10.6 % respon-

would not dis- ded that they would work as a freelancer or consultant. Another 3.0 %
would engage as business angels or investors. Only 15.4 % would work
courage most as an employee, while 1.0 % stated that they would no longer work at all

founders from (Figure 13). Founders from countries with small economies do not
become discouraged and stated that they would continue by founding a
founding ano- new startup (Romania: 90.3 %; Czech Republic: 73.6 %; Israel: 71.2 %).

ther business In Romania especially, founders would not consider working as an

employee (3.2 %) in case of failure.

ESM (overall) 69.9 15.4 10.6 3.0 1.1

Austria 64.4 14.9 16.1 4.6 0.0

Belgium 80.0 4.4 13.4 0.0 2.2

Czech Republic 73.6 21.1 5.3 0.0 0.0

France 68.5 14.3 14.3 0.0 2.9

Germany 68.6 18.3 8.4 3.4 1.2

Israel 71.2 18.6 10.2 0.0 0.0

Italy 70.7 11.6 10.2 6.1 1.4

Netherlands 70.8 16.7 8.3 0.0 4.2

Poland 64.2 17.9 14.3 3.6 0.0

Romania 90.3 3.2 3.2 0.0 3.2

Spain 68.0 16.0 16.0 0.0 0.0

Sweden 81.5 18.5 0.0 0.0 0.0

United Kingdom 62.2 8.9 24.4 2.2 2.2

0% 25 % 50 % 75 % 100 %

I would found another startup I would work as an employee I would work as a freelancer/consultant

I would get involved as a business angel/investor I would no longer work at all

Figure 13. Future scenarios following potential failure of the current startup (ESM countries)

31
ESM 2015

III. Industry,
customers
and markets

32
3.1 Industries and business models ESM 2015

The industry categorisation of startups

emphasises the importance of the digital
economy in Europe

The participants were asked to choose the industry category that represents their business model best from
a list of 18 industry categories (Figure 14). Most participants stated that their venture belongs to the
category software as a service (16.4 %). This was followed by startups that are assigned to the category IT/
software development (9.1 %). These results emphasise the relevance and importance of the digital economy
in Europe. Southern ESM countries (Table 2) tended to answer that their startup was categorised as an
online marketplace (Israel: 8.0 %; Spain: 9.0 %; Italy: 7.9 %). Eastern ESM countries predominantly put their
startups in the software as a service category (Poland: 20.3 %; Czech Republic: 30.8 %; Romania: 21.2 %).

Software as a service (16.4 %)

7.6 %
IT/software development (9.1 %)
9.1 %
7.5
Consumer mobile/web application (7.6 %)

%
E-commerce (7.5%)
4%
16.

6.5
Online marketplace (6.5 %)

%
Media and creative industries (6.5 %)

Industrial technology/

6.5 %
production/ hardware (5.8 %)

Consulting company, agency (5.3 %)

8.0 %

Green technology (4.4 %)

%
5.8

Bio-, nano- and medical technology (4.2 %)

22

%
%

0.9 %
.6

5
.3

Online service portal (4.0 %) %

1.6
%
4.4
2.1

Other category (22.6 %):

4.0 % 4.2 %
%

2.6
%
Education (3.8 %), Finance technology (3.6 %), Food (2.6 %),
3.6
Games (2.1 %), Offline services (1.6 %), Stationary wholesale %
3.8 %
and retail (0.9 %), Other (8.0 %)

Figure 14. Categorisation of startup industries (ESM overall)

33
ESM 2015 3.1 Industries and business models

Consumer
ESM (overall) Software as a service IT/software development
mobile/web application

Austria Software as a service IT/software development Food

Media and
Belgium Software as a service
creative industry
IT/software development

Consumer Industrial technology/

Czech Republic Software as a service
mobile/web application production/hardware

Bio–, nano– and

France medical technology
Software as a service E–commerce

Germany Software as a service E–commerce IT/software development

Consumer
Israel Software as a service
mobile/web application
Online marketplace

Italy Software as a service IT/software development Online marketplace

Industrial technology/ Consulting

Netherlands Software as a service
production/hardware company, agency

Media and
Poland Software as a service IT/software development
creative industry

Consumer
Romania Software as a service
mobile/web application
IT/software development

Consumer
Spain Software as a service
mobile/web application
IT/software development

Consulting
Sweden company, agency
Software as a service IT/software development

Consumer Media and

United Kingdom mobile/web application
Software as a service
creative industry

Table 2. Top 3 startup categories per country

34
3.2 Novelty of products and services ESM 2015

13.
5%

0%
48.

8.6
Almost 2 out of 3

%
of the startups rated their
products/services as novel
across the European or

%
15.6
global market

%
14.2

Not a market innovation Novelty in the regional market Novelty across country of residence Novelty across the EU

Novelty in the global market

Figure 15. Novelty of startups‘ products or services at the time of foundation (ESM overall)

Novelty is a pivotal feature of startups, therefore presenting a novelty across the EU or the country of
participants were asked to rate their products’ residence respectively. Only 13.5 % stated that their
and services’ degree of novelty with regard to the startup does not comprise any novelty in any market
regional market, the country of residence, the EU (Figure 6).
and the global market. About half of the partici-
pants (48.0 %) stated that their startup represents a The Czech Republic is the country with the highest
novelty in the global market (Figure 15). Another percentage (Table 3) of startups with global mar-
14.2 % and 15.6 % of the startups were rated as re- ket innovation (21.7 %). Italy (20.4 %) and Belgium

35
ESM 2015 3.2 Novelty of products and services

(25.0 %) have startups with the highest percentage of novelty in the EU or across the country of residence.
Small economies estimated their startups to focus more on regional novelty (Israel: 11.3 %; Czech Republic:
21.7 %; Romania: 18.7 %) than larger economies (Germany: 7.4 %; United Kingdom: 8.6 %; France: 5.1 %).

Countries with the highest percen- Countries with the highest percen-
tage of startups providing a novelty tage of startups providing a novelty
in the regional market are primarily in the market across their country
from … of residence are primarily from …

Czech Republic Italy

21.7 % 20.4 %

Sweden Germany
19.4 % 19.8 %

Romania France
18.8 % 18.6 %

Countries with the highest percen- Countries with the highest percen-
tage of startups providing a novelty tage of startups providing a novelty
in the market across the EU are in the global market are primarily
primarily from … from …

Belgium Netherlands
25.0 % 75.8 %

Czech Republic Israel

21.7 % 69.0 %

Austria United Kingdom

19.3 % 65.6 %

Table 3. Novelty of products and services: Top 3 countries

36
3.3 Customer groups ESM 2015

Most European startups address

customers/users mainly in the B2B sector

In total, 6 out of 10 ESM startups (59.0 %) address the business to business (B2B) sector as their most important
market (Figure 16). The business of 9.6 % of all startups is evenly distributed across private and corporate
customers (B2B and B2C equally). About a third of startups (31.4 %) operate primarily on the business to consu-
mer (B2C) market. Startup locations with a primary focus on the B2B market include Belgium (84.7 %), Sweden
(72.2 %) and the Czech Republic (70.8 %). The B2C sector is an attractive market, especially for startups from
Romania (48.5 %), the United Kingdom (44.8 %) and Spain (43.2 %).

ESM (overall) 23.0 14.5 21.5 9.6 20.9 8.3 2.2

Austria 28.0 12.7 27.1 0.0 16.9 9.3 5.9

Belgium 35.5 13.6 35.6 0.0 13.6 1.7 0.0

Czech Republic 25.0 12.5 33.3 0.0 25.0 4.2 0.0

France 28.3 10.0 23.3 0.0 30.0 3.3 5.0

Germany 25.8 13.9 13.8 19.5 17.6 9.4 0.0

Israel 22.7 14.7 29.3 0.0 24.0 6.7 2.6

Italy 14.0 17.7 28.5 0.0 29.0 7.5 3.2

Netherlands 27.3 12.1 27.3 0.0 30.3 3.0 0.0

Poland 22.0 6.1 32.9 0.0 28.0 7.3 3.7

Romania 9.7 22.5 19.3 0.0 32.3 6.5 9.7

Spain 11.4 15.9 29.5 0.0 25.0 10.2 8.0

Sweden 27.8 19.4 25.0 0.0 19.4 5.6 2.8

United Kingdom 15.5 20.7 19.0 0.0 29.3 6.9 8.6

0% 25 % 50 % 75 % 100 %

Only B2C Mainly B2C Mainly B2C with some B2B B2B and B2C equally

Mainly B2B with some B2C Mainly B2B Only B2B

Figure 16. Customers and/or users addressed by the ESM startups (ESM countries)

37
ESM 2015 3.4 Current markets and internationalisation

More than half of all startups serve

international markets

To date, around half of the ESM startups (49.0 %) focus their business activities on their home country only
(Figure 17). The other half of the startups have entered markets in other European countries (21.2 %) or
even operate worldwide (29.8 %). When comparing the market penetration of all ESM countries (Figure 17),
it is clear that startups in economically powerful nations in terms of GDP, such as Germany or France, focus prima-
rily on their strong domestic market. This is not surprising, given a high purchasing power and sales potential
in these countries. In contrast, startups in countries with a rather small economic or geographical market, such
as Israel, the Netherlands or Austria, tend to focus more on European or worldwide markets.

ESM (overall) 49.0 21.2 29.8

Austria 23.3 44.0 32.8

Belgium 29.3 43.1 27.6

Czech Republic 40.0 35.0 25.0

France 50.0 17.3 32.7

Germany 58.1 17.0 24.9

Israel 30.3 13.6 56.1

Italy 56.9 21.3 21.8

Netherlands 26.7 33.3 40.0

Poland 47.6 20.7 31.7

Romania 34.8 34.8 30.4

Spain 47.7 17.4 34.9

Sweden 38.9 19.4 41.7

United Kingdom 42.3 21.2 36.5

0% 25 % 50 % 75 % 100 %

Home country European countries Worldwide

Figure 17. Current markets in which startups generate revenue (ESM countries)

38
3.5 Future markets and internationalisation ESM 2015

Planned internatio- When asked about their internationalisation plans

for the next 12 months, only 18.4 % of all startup re-
nalisation is higher presentatives indicated that they would not plan any

than current inter- internationalisation (Figure 18). More than 3 out

of 4 participants plan to expand to other European
nationalisation. countries (35.5 %) or even worldwide (46.1 %).

Out of the startups that currently operate only in

the home country market, most (72.3 %) plan to ex-
pand to other international markets in the following
12 months. Out of the startups that already operate
in global markets, a large majority of 87.7 % plans
further internationalisation.

In all ESM countries, the planned internationalisa-

tion is higher than the current internationalisation.
Figure 19 shows that especially startups from
countries with a low current internationalisation
rate are planning to expand to international mar-
kets. Startups from southern ESM countries such
as Italy (current internationalisation rate = 43.1 %;
planned internationalisation rate = 90.2 %) and
Spain (current internationalisation rate = 52.3 %;
planned internationalisation rate = 91.4 %), but also
eastern ESM countries such as the Czech Republic
and Poland are planning enormous expansion in
international market activity.

39
ESM 2015 3.5 Future markets and internationalisation

18
.4
%

18
.4
%

8 out of 10
startups are planning
46.1 %

further internationalisation
46.1 %

in the next 12 months

%
.5
35
%
.5
35

No internationalisation planned Yes, only in Europe Yes, worldwide

No internationalisation planned Yes, only in Europe Yes, worldwide

Figure 18. Future markets/planned internationalisation (ESM overall)

40
3.5 Future markets and internationalisation ESM 2015

ESM current 49.0 50.9

(overall) planned 18.4 81.6

Austria 23.3 76.8

11.4 88.7

Belgium 29.3 70.7

15.8 84.2

Czech 40.0 60.0

Republic 4.0 96.0

France 50.0 50.0

14.1 85.9

Germany 58.1 41.9

26.7 73.4

Israel 30.3 69.7

20.0 80.0

Italy 56.9 43.1

9.9 90.2

Netherlands 26.7 73.3

9.4 90.6

Poland 47.6 52.4

11.9 88.1

Romania 34.8 65.2

12.9 87.1

Spain 47.7 52.3

8.6 91.4

Sweden 38.9 61.1

17.1 82.9

United Kingdom 42.3 57.7

13.6 86.4

0% 25 % 50 % 75 % 100 %

No international markets International markets

No internationalisation planned Internationalisation planned

Figure 19. Current versus planned internationalisation (ESM countries)

41
ESM 2015

IV. Employment

42
4.1 Employment situation in startups ESM 2015

Startups are job engines

The startups that participated in this study employ on average 10.3 employees (excluding founders). Adding
the average number of founders (section 3.4, page 38), ESM startups account for a gross impact on employ-
ment of 12.9 jobs after 2.5 years. Germany leads the way with an average of 17.4 jobs (including founder/s).
Comparing the ecosystems in the European countries (Figure 20), we observe a large difference in job
creation. Startups in Germany, the United Kingdom and France create on average more than 10 jobs, whereas
startups in other countries tend to focus on ensuring the livelihood of the founder/s without creating additio-
nal jobs for employees. Large percentages of such founder-focused startups are found in, for example, Roma-
nia (where 27.8 % of the startups have no additional employees), Austria (21.1 %) and Sweden (18.6 %).

ESM (overall) 10.3 2.6

Austria 5.0 2.5

Belgium 5.1 2.2

Czech Republic 4.6 2.2

France 8.7 2.8

Germany 15.0 2.4

Israel 2.9 2.7

Italy 4.3 3.1

Netherlands 4.5 2.3

Poland 5.4 2.4

Romania 2.6 2.3

Spain 4.4 3.0

Sweden 4.9 2.8

United Kingdom 11.7 2.4

0 4 8 12 16 20

Employees Founders

Figure 20. Average number of employees and founders (ESM countries)

43
ESM 2015 4.2 Employment situation by startup phase

Startups in all develop-

83.5
mental stages are planning
substantial growth in the
number of employees

The impact of European startups on employment

becomes even clearer when considering the develop-
mental stages of startups. The chart (Figure 21)
shows the average number of current employees,
including founder/s, per developmental phase.
Already during the seed stage, startups across Euro-
pe employ on average 5.1 employees. Ventures in the
startup stage offer on average 7.6 jobs. In the growth
stage, startups provide on average 26.3 jobs. Startups
in the later stage currently employ on average 83.5
26.3

people. Startups in the steady stage still offer 10.5

current jobs.

10.5
7.6
5.1

Growth stage
Startup stage

Steady stage
1.6 %
Later stage
Seed stage

Figure 21. Current average number of employees

(including founder/s) per startup phase (ESM overall)

44
4.3 Planned recruitment ESM 2015

Almost all
ESM 10.3
(overall) + 6.8 hires (+ 66 %)

Austria 5.0
+ 5.5 hires (+ 110 %)
startups plan
Belgium 5.1
to grow over
+ 7.9 hires (+ 154 %)
the next
12 months
Czech 4.6
+ 4.4 hires (+ 96 %)

France 8.7
+ 5.3 hires (+ 61 %)

Almost all (92.6 %) of the parti-

Germany 15.0
+ 7.7 hires (+ 51 %) cipating startups stated that they
plan to hire additional employees
Israel 2.9
+ 4.9 hires (+ 168 %) (including students and interns)
over the next 12 months.
Italy 4.3
+ 5.1 hires (+ 118 %)

On average, an ESM startup

Netherlands 4.5
+ 4.8 hires (+ 107 %) plans to add 6.8 jobs in the next
12 months. While the absolute
Poland 5.4
+ 6.9 hires (+ 127 %) difference in planned recruit-
ments between most countries
Romania 2.6
+ 3.4 hires (+ 133 %) are fairly comparable, we obser-
ve large differences in recruit-
Spain 4.4
+ 8.5 hires (+ 192 %) ments relative to the existing
number of employees (Figure
Sweden 4.9
+ 4.5 hires (+ 91 %) 22). In countries where star-
tups are relatively small (e.g.,
United Kingdom 11.7
+ 5.9 hires (+ 50 %) Romania and Israel) increases
in employees are over-proporti-
current employees planned number of future employees onal, whereas large startups in
Germany and the United King-
Figure 22. Current average number of employees versus planned dom plan only moderate hires.
number of employees (ESM countries)

45
ESM 2015 4.4 Citizenship of employees

A third of all European startup employees

are international employees

Most (68.3 %) of the employees working for the startups are originally from the country of the startup’s residence.
Among the 31.7 % of employees who are from foreign countries, 20.9 % have the nationality of an EU country and
10.7 % of a non-EU country. Countries with the highest percentages of home country citizenship employees are
Poland (95.4 %), Israel (92.4 %) and Italy (92.1 %). Countries employing the highest percentages of non-EU employees
are Sweden (26.6 %), the Netherlands (14.4 %) and Germany (11.9 %). Taking a look at the major European startup
hubs – Berlin, London, Paris and Tel Aviv – the chart (Figure 24) shows that London and Berlin have the most
international employees. In London, even more than half of all startup employees come from abroad. In contrast,
Paris and Tel Aviv primarily rely on employees from their home countries in order to run their businesses.

ESM (overall) 68.3 20.9 10.7

Austria 65.8 22.6 11.6

Belgium 81.2 14.5 4.3

Czech Republic 70.9 21.0 8.0

France 85.1 7.1 7.8

Germany 65.3 22.7 11.9

Israel 92.4 2.7 4.9

Italy 92.0 6.1 1.9

Netherlands 66.1 19.6 14.4

Poland 95.4 2.7 1.9

Romania 82.4 15.4 2.2

Spain 86.3 9.2 4.5

Sweden 65.7 7.7 26.6

United Kingdom 49.5 44.8 5.8

0% 25 % 50 % 75 % 100 %

Own country EU countries Non-EU countries

Figure 23. Origin of employees (ESM countries)

46
4.5 Startups and job training ESM 2015

Berlin 66.3 21.4 12.3

London 48.7 33.3 17.9

Paris 70.5 11.4 18.2

Tel Aviv 76.9 12.8 10.3

No interns 22.1 %
1 intern 24.2 %
0% 100% 2 interns 18.8 %
2 interns 10.9 %
Own country EU countries non-EU countries 4 interns 7.8 %
5-10 interns 12.1 %
> 10 interns 4.0 %
Figure 24. Origin of employees in major
European startup hubs 4

European startups em- Figure 25. Number of interns/students (ESM overall)

ploy on average 3.1
interns or students ESM (overall) 3.1

Austria 3.2

Belgium 3.5

Czech Republic 3.3

European startups provide a considerable number
France 3.2
of full-time jobs, as well as opportunities for the
Germany 3.0
development of professional careers in the form
Israel 2.5
of internships and student jobs.
Italy 2.7

Netherlands 3.3
While ESM startups on average provide more
Poland 3.2
full-time jobs (10.3 employees) than jobs for interns
Romania 2.3
or students (3.1 interns/students), only 22.1 % of
Spain 2.9
all startups do not employ any students or interns
Sweden 4.2
to support their business activities (Figure 25).
United Kingdom 5.7
Startups without interns or students are primarily
in Germany (31.7 %). In contrast, startups from the interns 0 6

United Kingdom employ on average 5.7 interns/

students (Figure 26). Figure 26. Average number of interns/students (ESM)

47
ESM 2015

V. Financing

48
5.1 Sources of financing ESM 2015

With regard to financing, most

Savings of

69.1 %
European founders indicated
(Figure 27) that their major founders
capital source was their own
savings (69.1 %), followed by
is the main
support from friends and family source of
(25.1 %). In the third place,
founders relied on governmental
financing
funding and subsidies (21.9 %)
and in the fourth place, business
angels supported the founders’
business activities (21.3 %). In
the Europe-wide comparison
(Table 4), founders that
finance their startups through
own savings are primarily found
in Germany (79.5 %), Romania
(75.0 %) and the Netherlands

25.1 %
(72.5 %). Business angel finan-
cing is especially common in

21.9 %
21.3 %
Germany (29.6 %) and the Uni-
ted Kingdom (22.8 %). Venture

Savings of founders (private capital of founders)

Government subsidies (governmental funding)
Incubator/company builder and/or accelerator

capital is a popular source of

14.8 %
13.5 %

financing among German (19.1 %)

12.6 %

Internal financing (operating cashflow)

and Polish (12.1 %) startups.

Crowdfunding/crowdinvesting

9.3 %
Other capital resources
4.7 %

Friends and family

3.8 %

Venture capital

Business angel
Bank loans
0.0 %
IPO

Figure 27. Major sources of financing (ESM overall)*

49
ESM 2015 5.1 Sources of financing

Savings of founders Friends & family Business angels

Germany Germany Germany

79.5% 32.0 % 29.6 %

Romania France United Kingdom

75.0 % 30.6 % 22.8 %

Netherlands Spain Austria/Italy

72.5 % 29.1 % 17.7 %

Venture capital Incubator & similar Crowdfunding

Germany Italy Romania

19.1 % 27.9 % 11.1 %

Poland Netherlands United Kingdom

12.1 % 25.0 % 8.9 %

Romania Spain Sweden

11.1 % 21.8 % 7.0 %

Internal financing Bank loans Government

Germany Netherlands Sweden

19.7 % 22.5 % 34.9 %

Austria France Germany

18.4 % 12.5 % 29.3 %

Sweden Germany Netherlands

16.3 % 11.7 % 27.5 %

Table 4. Major sources of financing: Top 3 countries

50
5.2 Own savings as only source of finance ESM 2015

Financing with own savings is especially

common in eastern ESM countries

The chart (Figure 28) shows the percentage of founders per ESM country that financed their startups
exclusively with their own savings. In the Europe-wide comparison, founders that finance their startups
with their own savings are primarily found in the eastern ESM countries, such as Romania (53.1 %) or the
Czech Republic (47.6 %). Thus, there might therefore be much potential for future investments.

In countries with a strong economy, such as France, Germany or the United Kingdom, startup founders have
more access to other sources of financing and therefore they do not exclusively rely on their own savings.

ESM (overall) 22.7

Austria 28.4

Belgium 35.1

Czech Republic 47.6

France 12.7

Germany 18.4

Israel 28.4

Italy 26.1

Netherlands 26.5

Poland 34.3

Romania 53.1

Spain 25.0

Sweden 16.2

United Kingdom 17.0

0% 60%

Figure 28. Financing only with own savings (ESM countries)

51
ESM 2015 5.3 Kinds of investors

Private investors are the

primary kind of investors

77.3 %
In order to find out more about the startup investors,
founders were asked to indicate from which sources
they had received financing (Figure 29). Private
investors (such as Index, Partech and Lakestar) ac-
counted for the majority of investments (77.3 %).

More than half of the participants (50.7 %) reported

that they had received financial support from public

50.7 %
investors. Another third (33.8 %) of all founders

Public investors (e.g., European Angels Fund, national government-backed funding programs)
were supported by strategic investors, such as large
enterprises that aspire to a strategic partnership.

33.8 %
Across ESM countries, this pattern of investments
Strategic investors (e.g., groups that aspire to a strategic partnership)
is relatively similar. One country that deviates
from the general tendency towards private inves-
tors is Austria, where startup founders are most
Private investors (e.g., Index, Partech and Lakestar)

frequently supported by public investors (e.g.,

European Angels Fund, national government-
backed funding programs; 47.6 %).

Figure 29. Frequency of the use of different kinds of investors (ESM overall) – Multiple answers possible.

52
 5.4 Previous raising of capital ESM 2015

Founders were asked to indicate the amount of

external capital that their startups had received to
On average, ESM
date (Figure 30). startups have already
Among those founders that had already received
raised € 2.5 million in
capital, 42.1 % raised between € 1 and € 150,000. external capital
Amounts of external capital between € 150,000 and
€1 million were raised by 31.7 % of all participants.
Another 26.3 % of all founders raised more than € 1
million in external capital. Overall, those European
startups having already received external capital

16.4 %
raised - on average - € 2.5 million.

14.9 %
12.0 %

11.6 %

10.8 %
10.0 %

8.1 %
7.5 %
Between € 10 million and € 25 million
Between € 25 million and €50 million

Between € 5 million and € 10 million

Between € 2 million and € 5 million

Between € 1 million and € 2 million

Between € 500 000 and € 1 million

Between € 250 000 and € 500 000

Between € 150 000 and € 250 000

4.1 %

Between € 50 000 and € 150 000

Between € 25 000 and € 50 000

Between € 1 and € 25 000

2.6 %
€50 million or more

1.1 %
1.0 %

Figure 30. Received amounts of external capital to date (ESM overall) 5

53
ESM 2015 5.5 Planned raising of capital

Startups plan to raise an additional € 3.3 million

in external capital on average

Founders also evaluated how much external capital they planned to raise over the next 12 months, based on
their budgeting (Figure 31). Of the participants, 24.9 % indicated that they would raise no external capital
for the following year. Among those who planned to raise external capital, the categories “between € 50,000
and € 150,000” (16.1 %) and “between € 500,000 and € 1 million” (16.1 %) were most frequently chosen.
Lastly, 13.8 % of all founders assumed that their startups would raise € 2 million or more. Overall, ESM star-
tups that intend to raise capital in the future are planning with € 3.3 million on average. Overall, it can be as-
sumed that the amount of capital needed by the participating startups will continue to increase as the majority
of startups in the ESM sample are still in the seed or startup phase and will progress with significant growth.
24.9 %

16.1 %

16.1 %
15.4 %
13.7 %

10.8%

Between € 25 million and € 50 million

Between € 5 million and € 10 million
Between € 1 million and € 2 million

Between € 2 million and € 5 million

Between € 500 000 and € 1 million
Between € 150 000 and € 250 000

Between € 250 000 and € 500 000

Between € 150 000 and € 250 000

Between € 50 000 and € 150 000

8.3 %
Between € 25 000 and € 50 000
7.2 %

6.9 %
Between € 1 and € 25 000

€ 50 million or more
No external capita

2.8 %

1.8%

0.6 %
0.3 %

Figure 31. Planned raising of capital within the next 12 months (ESM overall) 5

54
5.5 Planned raising of capital ESM 2015

In the ESM-wide comparison (Figure 32), founders that have enough financial resources and do not
require additional external capital for the operation of their businesses in the following year most commonly
come from Germany (33.8 %), Sweden (26.5 %) and Austria (25.7 %). Startups from eastern ESM countries
(Czech Republic: 55.0 %; Romania: 48.4 %) are mostly planning for small amounts of external capital of up to
€150,000. France (46.9 %), Israel (43.7 %) and Italy (41.3 %) are the countries in which startups most often
plan to raise medium-sized amounts of external capital (€ 150,000 to € 1 million) (Figure 35).

The threshold of € 1 million, up to € 5 million planned external capital was most often exceeded by founders
from the United Kingdom (20.4 %), Israel (16.9 %) and Spain (16.7 %). Startups from Belgium (9.4 %), France
(6.1 %) and Germany (5.8 %) plan to raise the highest amount of external capital (more than € 5 million).

ESM (overall) 24.9 22.6 33.9 14.3 4.2

Austria 25.7 19.0 37.1 15.2 2.9

Belgium 17.0 24.5 35.8 13.2 9.4

Czech Republic 15.0 55.0 30.0 0.0 0.0

France 16.3 14.3 46.9 16.3 6.1

Germany 33.8 17.8 27.9 14.7 5.8

Israel 12.7 22.5 43.7 16.9 4.2

Italy 12.8 36.0 41.3 9.3 0.6

Netherlands 21.9 25.0 40.6 9.4 3.1

Poland 18.2 31.8 31.8 15.2 3.0

Romania 19.4 48.4 32.3 0.0 0.0

Spain 15.5 28.6 38.1 16.7 1.2

Sweden 26.5 29.4 38.2 5.9 0.0

United Kingdom 10.2 26.5 40.8 20.4 2.0

0% 25 % 50 % 75 % 100 %

No external capital Between € 1 and € 150 000 Between € 150 000 and € 1 million

Between € 1 million and € 5 million More than € 5 million

Figure 32. Planned raising of capital over the next 12 months (ESM countries)

55
ESM 2015

VI. Economic
situation, challenges
and expectations

56
6.1 Annual revenue in the last fiscal year ESM 2015

8 out of 10 ESM 18.1 %

startups generated revenue 81.9 %

in the last fiscal year

A large majority of ESM startups (81.9 %) generated some revenue Generated revenue No revenue yet

in the last fiscal year (Figure 33). Among startups that recorded
revenue in the last year, more than half of the ventures generated up to Figure 33. Revenue in the last
€ 150,000. Another 21.0 % of all ventures had revenue of between € fiscal year (ESM overall)
150,000 and € 500,000. The threshold of € 500,000 was exceeded by
23.9 % of all ESM startups (Figure 34). In the two highest revenue categories, startups from large economies
such as France or Germany lead the field, but Israeli startups were also strong in terms of revenue. Startups
from countries with medium-sized domestic markets, such as Sweden or Poland, have lower ranges of revenue.

ESM (overall) 20.8 20.8 13.5 21.0 23.9

Austria 23.4 23.4 19.1 14.9 19.1

Belgium 26.1 26.1 4.3 26.1 17.4

France 10.5 10.5 10.5 26.3 42.1

Germany 16.4 16.4 13.5 23.8 29.8

Israel 28.6 28.6 4.8 14.3 23.8

Italy 29.4 29.4 19.1 10.3 11.8

Netherlands 29.4 29.4 11.8 17.6 11.8

Poland 37.0 37.0 11.1 7.4 7.4

Spain 36.4 36.4 4.5 18.2 4.5

Sweden 28.6 28.6 21.4 7.1 14.3

United Kingdom 30.0 30.0 15.0 20.0 5.0

0% 25 % 50 % 75 % 100 %

Between € 1 and 25 000 25 000 and 50 000 50 000 and 150 000 150 000 and 500 000 500 000 and more

Figure 34. Revenue in the last fiscal year (ESM countries) 6

57
ESM 2015 6.2 Evaluation of present business situation

More than To assess the prevailing business climate in European startups, participants
were asked to rate their current and future business situation (Figure
90% of startup 35). A large majority of founders indicated that their present business

­founders rate situation is good (36.3 %) or satisfying (54.0 %). Countries that stand out
with a very good present business climate for startups include especially the
their current northern ESM countries, such as the United Kingdom (55.6 % of partici-

business pants indicated that the present business situation is good) and Sweden
(48.3 %). In the southern ESM countries, most founders rate the present
situation as business situation as satisfying (Spain: 61.8 %; Italy: 56.1 %). Except for

satisfying or Romania, in which a large majority of founders rate the present business situa-
tion as satisfying, founders from the eastern ESM countries, such as the Czech
even good Republic and Poland, perceive the current business situation as unfavourable.

ESM (overall) 36.3 54.0 9.7

Austria 38.5 57.1 4.4

Belgium 43.2 54.5 2.3

Czech Republic 21.9 28.1 50.0

France 9.4 71.9 18.8

Germany 39.6 49.7 10.7

Israel 30.5 57.6 11.9

Italy 28.1 56.1 15.8

Netherlands 24.0 72.0 4.0

Poland 13.2 36.8 50.0

Romania 17.2 79.3 3.4

Spain 21.1 61.8 17.1

Sweden 48.3 48.3 3.4

United Kingdom 55.6 42.2 2.2

0% 25 % 50 % 75 % 100 %

good satisfying bad

Figure 35. Present business situation (ESM countries)

58
6.3 Present versus future business situation ESM 2015

72% assume ESM (overall) current 36.4 54.1 9.5

future 72.1 24.7 3.2

a positive Austria current

future
38.5
73.6
57.1
24.2
4.4
2.2

development Belgium current 43.2 54.5 2.3

during the future 66.7 28.6 4.8

next 6 months Czech current 21.9 28.1 50.0

future 70.6 23.5 5.9

France current 9.4 71.9 18.8

future 76.7 16.7 6.7

Founders were asked about their

Germany current 39.6 49.7 10.7
assessment of their startups’ fu- future 76.2 21.9 1.9

ture business situation (Figure

Israel current 30.5 57.6 11.9
36). The outlook for the future future 74.6 22.0 3.4

business situation is very positive

Italy current 28.1 56.1 15.8
for most European startups, as future 59.2 33.1 7.6

72.1 % of all ESM startups rate

Netherlands current 24.0 72.0 4.0
their future business situation future 61.5 34.6 3.8

as positive and another 24.7 % as

Poland current 13.2 36.8 50.0
neutral. Countries that stand out future 78.9 17.5 3.5

with a very positive outlook are

Romania current 17.2 79.3 3.4
Sweden (80.0 % of participants future 65.5 34.5 0.0

rate their future business situation

Spain current 21.1 61.8 17.1
as rather avourable), Poland (78.9 future 56.6 36.8 6.6

%) and France (76.7 %). The com-

Sweden current 48.3 48.3 3.4
parison between the current and future 80.0 13.3 6.7

future business situation shows

United Kingdom current 55.6 42.2 2.2
that although few founders from future 76.1 23.9 0.0

eastern ESM countries (e.g., Po-

land and the Czech Republic) rate good satisfying bad

their current business situation as positive neutral negative

good, there is a high increase in

optimism for the future. Figure 36. Current versus future business situation (ESM countries)

59
ESM 2015 6.4 Future scenarios for Europeans startups

80% of all European founders assume that they

will permanently remain in their startups

The founders were asked how likely they rated four given scenarios to happen in the future of their venture
(Figure 37). More than 85 % founders consider the probability to remain in their startups as rather likely to
very likely. More than half of the participants (65.9 %) are optimistic that they will be able to sell their profita-
ble ventures within the first ten years. Another 26.7 % of the founders consider it to be rather likely that their
startup will be successful enough to become a stock exchange listed company (IPO). Finally, more than 95 % of
all European founders are confident that their startups will continue existing in the future and will not close
down. For most founders from all the ESM countries, the scenarios to remain permanently in the company
(average rating = 4.9) or to sell the company within the first ten years (average rating = 4.0) are the most likely
ones. Founders from southern ESM countries, such as Israel (average rating = 5.1) and Spain (average rating
= 5.0), but also from the Czech Republic (average rating = 5.1), believe that remaining permanently in their
companies is the most probable scenario. Selling the company seems likely especially for founders from
northern ESM countries (Israel: average rating = 4.3; Netherlands: average rating = 4.3; United Kingdom: average
rating = 4.5) and Israel (average rating = 4.3). An IPO sounds like a realistic option especially for founders from
eastern ESM countries (Romania: average rating = 3.2; Poland: average rating = 3.0). Closing down the current
business is an option that especially founders from northwestern ESM countries (Netherlands: average rating =

41.7 27.2 16.2 8.0 3.8 3.1

Founders will remain permanently in the company
23.0 23.0 19.9 14.2 7.9 12.0
Sale of the company within the first 10 years after foundation
5.3 7.4 14.0 18.2 17.5 37.5
IPO – the company will go public and open to the stock market
1.2 3.1 9.5 19.2 21.2 45.7
Closing down

0% 25 % 50 % 75 % 100 %

Very unlikely Unlikely Rather unlikely Rather likely Likely Very likely

Figure 37. Likelihood of future scenarios for startups (ESM overall)

60
 6.5 Current challenges ESM 2015

Sales/customer acquisition, raising 2.4; Belgium: average rating = 2.2;

Germany: average rating = 2.1)
capital and product development consider.

are the biggest challenges for Partici­pants were asked about

European Startups the major challenges currently
facing their startups (Figure
38). The most frequently cited
category was sales and customer
19.5 %

acquisition (19.5 %), followed

by raising capital (15.7 %) and
product development (14.4 %).
Startups, particularly from
15.7 %

northwestern ESM countries,

14.4 %

see the acquisition of new custo-

13.4 %

mers and the further increase in

sales as a key challenge (Table
5). Eastern ESM countries such
as the Czech Republic primarily
deal with product development
as an important current chal-
lenge. For raising capital and
6.9 %

6.6 %

growth, there are no obvious

north/south or west/east diffe-
5.2%

4.8 %

4.8 %

rences. Instead, these challenges

4.3 %

4.3 %
Processes/internal organization

are important for southern,

Sales/Customer acquisition

northern as well as eastern ESM

Product development

Internationalization

Team development

Cash flow/liquidity

countries. With regard to raising

Other challenges
Raising capital

Profitability

capital and growth, Spanish

Recruiting
Growth

startups see these categories as

particularly challenging.

Figure 38. Current challenges facing European startups (ESM overall)

61
ESM 2015 6.6 Expectations about politics

In order to derive recommen-

Sales & customer Raising capital is a dations for the development of
acquisition is a key key challenge in … favourable business environ-
challenge in … ments for startups in Europe,
participants were asked what they
Netherlands Spain
expect from politics regarding
Romania 23.4 % 19.4 %
their entrepreneurial activities
Austria Israel
(Figure 39). Expectations were
Israel 22.1 % 18.3 %
grouped into four categories.
Germany Netherlands
20.9 % 17.0 %

Financial support (including

tax reductions/relief; support

Product develop- Growth is a key with raising capital and venture

ment is a key challenge in … capital) was the most frequently

challenge in … named expectation across all

ESM countries (34.4 %).
Czech Republic Spain
22.6 % 19.8 %
28.8 % of all ESM founders ex-
Romania Romania
pressed expectations regarding
21.2 % 18.1 %
political regulations and bu-
Israel Netherlands
reaucracy (including reduction
19.8 % 18.1 %
of bureaucracy/regulations; easier
recruitment of non-EU citizens).

Table 5. Current challenges – Top 3 countries

25.9 % of all ESM founders
expressed a need for social and
European founders hope for advisory support (including

more financial support and better support for founders; better

understanding of the special needs
improvements in political of startups; improved exchange

regulations and bureaucracy between politics, startups and the

established economy).

62
6.6 Expectations about politics ESM 2015

11.0 % of all ESM founders hoped for more societal eastern ESM countries (e.g., Poland and the Czech
support (including raising the cultural acceptance Republic). Societal support is an important expec-
for entrepreneurship; establishing entrepreneurship tation in eastern ESM countries (e.g., Poland and
education). the Czech Republic), while it is less important for
participants from northwestern ESM countries (e.g.,
Social or advisory support is an important expecta- Germany and the Netherlands). Political regulations
tion in northwestern ESM countries (e.g., Sweden and bureaucracy were important issues for most
and the United Kingdom), whereas it is less important participating countries. Only founders from northern
in southern ESM countries (e.g., Spain and Italy). ESM countries (e.g., the United Kingdom and Swe-
Financial support is an important expectation in den) are relatively satisfied with the regulations and
southern ESM countries (e.g., Spain and Israel), bureaucratic processes in their countries.
whereas it is less important for participants from

ESM (overall) 25.9 28.8 34.4 11.0

Austria 20.8 26.2 40.9 12.1

Belgium 24.1 26.3 36.5 13.1

Czech Republic 33.3 27.8 22.2 16.7

France 27.4 24.7 30.1 17.8

Germany 29.6 32.8 30.3 7.2

Israel 25.3 23.6 42.1 9.0

Italy 17.1 30.8 37.8 14.3

Netherlands 26.9 33.3 32.3 7.5

Poland 25.1 30.1 29.5 15.3

Romania 27.2 23.9 40.2 8.7

Spain 21.3 27.7 41.3 9.8

Sweden 35.1 21.6 29.9 13.4

United Kingdom 33.8 20.9 33.8 11.5

0% 25 % 50 % 75 % 100 %

Societal support Financial support Political regulations and bureaucracy Social and advisory support

Figure 39. Expectations of founders regarding politics (ESM countries)

63
 ESM 2015 6.7 The startup environment

The European startup environment

is rated as satisfying — but there is
room for improvement

4.2

4.2

3.9
3.6
3.5

3.4

4.0
3.3

3.3

3.1

2.9
2.6

2.5

2.3

United Kingdom
Czech Republic
ESM (overall)

Netherlands
Germany

Romania
Belgium

Sweden
Austria

France

Poland

Spain
Israel

Italy

very bad (1) – very good (6)

Figure 40. Average evaluation of the national government: Support of the startup
ecosystem (ESM countries)
3.5
3.3
3.1

3.1
3.0

2.9
2.8

2.8
2.7

2.6

2.5
2.0

1.9
1.8

United Kingdom
Czech Republic
ESM (overall)

Netherlands
Germany

Romania
Belgium

Sweden
Austria

France

Poland

Spain
Israel

Italy

very bad (1) – very good (6)

Figure 41. Average evaluation of national politicians: Understanding the concerns of startups (ESM countries)

64
 ESM (overall) ESM (overall) ESM (overall)

3.3 2.4 3.2

Austria Austria Austria

3.1 2.1 3.0

Belgium Belgium Belgium

very bad (1) – very good (6)

very bad (1) – very good (6)
very bad (1) – very good (6)
3.3 2.8 3.2
Czech Republic Czech Republic Czech Republic

2.7 1.8 2.7

France France France

3.3 3.1 3.2

6.7 The startup environment

Germany Germany Germany

3.5 2.2 3.2

entrepreneurial thinking/acting (ESM countries)

entrepreneurial thinking/acting (ESM countries)
Israel Israel Israel

4.3 3.6 4.4

Italy Italy Italy

3.0 2.8 3.1

Netherlands Netherlands Netherlands

2.9 3.3 3.9

Poland Poland Poland

3.1 2.2 2.9

Figure 42. Average evaluation of university: Promoting and communicating

Romania Romania Romania

2.4

Figure 43. Average evaluation of the school system: Promoting and communicating
2.7 1.9
Spain Spain Spain

2.8 2.6 2.9

Sweden Sweden Sweden

2.8 3.1 3.6

Figure 44. Average evaluation of traditional companies: Collaboration with startups (ESM countries)
United Kingdom United Kingdom United Kingdom

3.1 2.8 3.3

65
ESM 2015
ESM 2015 6.7 The startup environment

Founders from Israel and the Netherlands

give their countries the best overall rating
for a favourable startup environment

The ESM founders were asked to rate the startup Israel and the Netherlands stand out as
environment in their respective countries on a “best practice examples” with very
scale from 1 (very bad) to 6 (very good) (Figures favourable overall evaluations in several
40 to 44). Overall, the evaluations were in the categories. Founders from Israel as well
medium range, indicating satisfaction but room as the Netherlands are especially satisfied
for improvement. with their national governments in suppor-
ting the startup ecosystem. Israeli entrepre-
ESM-wide, the category receiving the highest neurs positively emphasised the education
average evaluation was that of the traditional system (universities and schools) in terms
companies’ collaboration with startups (average of promoting and communicating entrepre-
rating = 3.3). On the other hand, the school neurial thinking and acting. Founders from
system’s promotion and communication of entre- the Netherlands appreciated national traditi-
preneurial thinking and acting can be improved onal companies’ collaboration with startups.
(average rating = 2.4).

When comparing the ESM countries, many

northern ESM countries (e.g., the Netherlands,
Sweden and the United Kingdom) are comparably
satisfied with their governments’ support of the
startup ecosystem.

66
Bibliography ESM 2015

Aronsson, M. (2004). Education matters – but does entrepreneurship education?

An interview with David Birch, Academy of Management Learning & Education, 3(3), 289-292.

Blank, Steve (2010). What’s a startup? First principles.

Available at: www.steveblank.com/2010/01/25/whats-a-startup-first-principles
(accessed 14 December 2015)

Global Entrepreneurship Monitor (2014). GEM 2014 Global Report.

Available at: www.gemconsortium.org/report
(accessed 18 December 2015)

Isenberg, D. J. (2010). How to start an entrepreneurial revolution.

Harvard Business Review, 88(6), 40-50.

Isenberg, D. (2011). The entrepreneurship ecosystem strategy

as a new paradigm for economic policy: Principles for cultivating entrepreneurship.
Presentation at the Institute of International and European Affairs, 12 May 2011, Dublin, Ireland.

Metzger, G. (2015). KfW-Gründungsmonitor 2015.

Available at: www.kfw.de/KfW-Konzern/Newsroom/Aktuelles/News/News-Details_276736.html
(accessed 21 December 2015)

Ripsas, S. & Tröger, S. (2015). 3. DSM – Deutscher Startup Monitor.

Available at: www.deutscherstartupmonitor.de/fileadmin/dsm/dsm-15/studie_dsm_2015.pdf
(accessed 3 December 2015)

The Economist (2012). European entrepreneurs – Les misérables.

Available at: www.economist.com/node/21559618
(accessed 18 December 2015)

67
ESM 2015 Partner network

This study would have been impossible without

the support of all international partners showing
the open entrepreneurial mindset and international
orientation of the startup sector. Travelling across
Europe and Israel for the European Startup Moni-
tor, the call for more research on European startups
was clear. Many initiatives are mapping and monito-
ring the individual startup-ecosystems on a national
level and often in the national language only. These
initiatives must be brought together to be able to
compare and benchmark. The European Startup
Monitor is purposely using only data generated with
one multilingual online survey of European foun-
ders and the same methodology throughout.

We would like to thank Google, KPMG and

Telefónica Germany GmbH for sponsoring us
and supporting the European Startup Monitor. A
special thanks to everyone who was involved in pro-
moting the study, open to share ideas and networks
and overall supportive of working together on a
voluntary basis. All international partners and
universities supported the study pro bono, which
would not have been possible in many other sectors.
We hope to be able to develop the study further in
cooperation with the European ecosystems, making
the European Startup Monitor an holistic initiative
created by and for founders out of pure enthusiasm
for startups and innovation.

Lisa Schreier – Head of Research & International

Strategy, German Startups Association

68
Partner network ESM 2015

69
ESM 2015 European Startup Network

As one result of the positive partnership with This network will work on three areas:
many European representatives of startups for
the European Startup Monitor, the German 1. Scientific research to create transparency and
Startups Association has jointly with Startup.be hard facts as basis for policy making
(the Belgian Startup Association) initiated the
European Startup Network. 2. Policy formation and campaigning

Believing, that in order to make rapid legislative 3. Further development of the European entrepre
adaption possible, startups have to be understood neurs’ network setting up cross-market soft
and the relevant areas of improvement need to be landing programs for scaleups; implementing
clearly identified. This can be done by combining Startup Manifesto insights and proposals;
scientific research with practical knowledge and
best practice examples of all European startup For more information visit www.europeanstartups.org
ecosystems. The national startup associations or follow the European Startup Network on Twitter
have as part of the European Startup Monitor @StartupEurope
proven that they are more than willing to work
together, share best practices and leverage their
national networks at a European level to coordi-
nate actions and communicate together for the
benefit of their national startups.

With the intent to connect the national startup

ecosystems across Europe to form a platform for
best practice exchange and European policy
suggestions made by and for founders, many
startup associations commit to creating this
European Startup Network.

70
International academic partners ESM 2015

Dr. Rudolf Dömötör – Director of the Entrepre-

neurship Center Network (ECN) at the Institute for
Entrepreneurship & Innovation at Vienna Uni-
versity of Economics and Business. ECN is a joint
initiative of six Viennese universities.

Prof. Håkan Boter – Professor at Umeå School

of Business and Economics (USBE), Sweden.
His areas of expertise include Entrepreneurial
Economics, Organizational Studies, Business
Administration.

Javier Capapé – Javier Capapé is a Spanish econo-

mist, Research Associate at IE - Sovereign Wealth
Lab at IE Business School and PhD Candidate at
ESADE Business School (exp. January 2016), expert
on Sovereign Wealth Funds and SovereigNET
Research Affiliate at the Fletcher School (Tufts
University) since 2012.

Andrew Atherton – Andrew Atherton is a Profes-

sor of Enterprise at Lancaster University. His cur-
rent research interests and areas of activity include
innovation and entrepreneurship, local and regional
development and social dynamics and aspects of entre-
pre- neurship, as well as entrepreneurship in China
and business startup.

71
ESM 2015 Initiator

The German Startups Association has been a

representative and voice of startups in Germany
since 2012 and is committed to establishing a foun-
der-friendly environment. This is done by engaging
decision-makers in politics, developing proposals
that encourage a culture of self-employment and
reducing the barriers to starting a business. The as-
sociation promotes innovative entrepreneurship and
wants to establish an entrepreneurship mentality in
society. The association is initiating events and star-
tups exchanges between different ecosystems, such
as Silicon Valley, New York or Tel Aviv to connect
founders, startups and their friends with each other
as a broad network. The association has more than
500 members, including 400 startups. The associa-
tion performs research on the startup ecosystems,
in Germany (German Startup Monitor) as well as
the broader Europe (European Startup Monitor).
It is an initiative founded by and for founders.

72
Initiator ESM 2015

lived, worked and studied in Berlin, Cambridge

and New York and has long-term experience
in the consulting and governmental sectors.
Her areas of expertise are international relations,
intercultural competence and business strategy.
For the German Startups Association, Lisa is
working on European relations, creating a network
for European startups to share experiences. Lisa
is in charge of both the European Startup Monitor
and the European Startup Network. As a network
manager, she regularly visits other European
Florian Noell
startup representatives, startup related events
Florian is the chairman of the board at the German
and the European Commission in Brussels.
Startups Association and a true entrepreneur.
He has founded multiple startups and advises on
digital economy issues. He is the deputy chairman
at the Young Digital Economy Advisory Board
giving the Federal Minister of Economic Affairs
and Energy firsthand advice on current issues,
particularly on the development and potential of
the young digital economy and on how to provide
startups with a better environment in which to
grow. Furthermore, he initiated and co-authored the
German Startup Monitor in 2013. Florian has been
acknowledged for his extraordinary achievements
multiple times, including being named as one of
the 40 talents under 40 by Capital Magazine.

Lisa Schreier
Lisa is Head of Research & International Strategy
at the German Startups Association. She has
graduated from ESCP-Europe with a Masters
of Science in European Management. She has

73
ESM 2015 Academic lead

The chair of business studies and business informatics,

in particular e-business and e-entrepreneurship (net-
CAMPUS – We start your e-entrepreneurship), is located
at the University of Duisburg-Essen and led by Prof.
Dr. Tobias Kollmann. The research group develops
quality solutions for theoretical and practical issues in
the scope of the digital economy. The chair occupies
itself with current topics associated with electronic
business processes, but also fosters interdisciplinary
research in the classic research fields of business stu-
dies and business informatics. In the field of teaching,
the chair follows a special link between economic and
technical areas with a special focus on qualification
and startups in e-business. There are two main aims:
to contribute and intensify the usage of digital business
processes (e-business) and to foster the foundation of
startups in the digital economy (e-entrepreneurship).

Under the flag “netSTART – We start your e-bu-

siness”, Prof. Dr. Tobias Kollmann offers a variety
of key-note presentations, speeches, seminars and
workshops for individuals and companies that consider
the digital transformation as their personal chance
or necessity in business. The topics cover economic,
societal, technological and political aspects regarding
the digital economy, digital innovation and digital
transformation. More than 200 companies — from
small and medium-sized firms to large corporations —
have used this opportunity in the last ten years.
Renowned clients include large banks, media and
publishing companies, educational institutions or
political parties.

74
Academic lead ESM 2015

of Economic Affairs and Energy. In 2014, Germa-

ny’s largest federal state, North Rhine-Westphalia,
appointed him as its representative on issues of the
digital economy. Against this background, Prof.
Dr. Kollmann has become a popular speaker on
topics with regard to the digital economy, digital
transformation and digital change. According to the
Business Punk journal (2nd edition, 2014), he ranks
among the 50 most important leaders of the startup
scene in Germany.

Prof. Dr. Tobias Kollmann

Prof. Dr. Tobias Kollmann holds the chair of e-bu-
siness and e-entrepreneurship at the University of
Duisburg-Essen in Germany. Since 1996, he has
addressed research questions in the fields of the
internet, e-business and e-commerce. As a co-foun-
der of AutoScout24, he is among the pioneers
of the German internet economy and electronic
marketplaces. He is the author of numerous books
and practice-based and expert articles in the areas
of e-entrepreneurship, e-business and acceptance/
marketing in new media. For his research and fun- Dr. Christoph Stöckmann
ding concept in this area, Prof. Dr. Kollmann has Dr. Christoph Stöckmann is a post-doctoral rese-
received a special award at the UNESCO Entrepre- archer (“Akademischer Rat”) at the University of
neurship Awards (Entrepreneurial Thinking and Duisburg-Essen in Germany, where he is a member
Acting) in 2007. As a business angel, he has sup- of the e-business and e-entrepreneurship research
ported and financed several startups over the past group at the Faculty of Economics and Business
15 years and was recognised as Business Angel of Administration. He holds a German diploma (MSc
the Year by the Business Angels Network Germany equivalent) in business administration and informa-
e. V. in 2012. Since 2013, Prof. Dr. Kollmann has tion systems and has received his doctoral degree
been the chairman of the Young Digital Economy with a thesis on entrepreneurial management in
Advisory Board for the German Federal Ministry adolescent ICT companies from the University of

75
ESM 2015 Academic lead

Duisburg-Essen in 2009. His professional experience

includes project management as well as consulting
in entrepreneurial and innovation management in
young growth companies and established companies.
His research on various aspects of entrepreneurs-
hip, innovation and the digital economy has been
presented at numerous national and international
conferences and in top-tier academic journals such as
Entrepreneurship Theory and Practice (ET&P).

Julia Kensbock, M. Sc.

Julia Kensbock is a research associate and doctoral
candidate at the e-business and e-entrepreneurship
research group located at the University of Duis-
burg-Essen. She studied psychology with a focus
on industrial and organisational psychology at the
universities of Mannheim and Konstanz. Combi-
ning the fields of psychology and management in her
doctoral thesis, she addresses various psychological
factors that have an impact on the behaviour of
Jana W. Linstaedt, Dipl.-Psych. individuals during entrepreneurial activities and in
Jana W. Linstaedt is a research associate and organisational contexts.
doctoral candidate at the e-business and e-entrepre-
neurship research group located at the University
of Duisburg-Essen. She studied psychology with a
focus on industrial, organisational and media psy-
chology as well as social cognition and interaction
at the Saarland University. In her doctoral thesis,
Ms Linstaedt examines psychological factors and
mechanisms in entrepreneurial teams and organisa-
tional management dyads that affect entrepreneurial
work processes and outcomes.

76
Sponsors ESM 2015

Google’s mission is to organise the world’s informa-

tion and make it universally accessible and useful.
Google is committed to empowering entrepreneurs
around the world through programmes, partners-
hips and products. Google for Entrepreneurs part-
ners with startup communities and builds campuses
where entrepreneurs can learn, connect and create
companies that will change the world. Since 2011,
it has launched campuses and formed partnerships
that support entrepreneurs in 125 countries.

KPMG is a network of professional firms with

more than 162,000 employees in 155 countries.
In Germany, KPMG is one of the leading auditing
and advisory firms with around 9,600 employees
at more than 20 locations. Its services are divided
into the following functions: audit, tax and advisory.
It has established teams of interdisciplinary spe-
cialists for key industries of the economy. These
pool the experience of experts around the world
and further enhance the quality of the advisory
services. KPMG’s Smart Start Team has set itself
the task of supporting entrepreneurs in getting their
businesses up and running. They know the typical
challenges that arise in the lifecycle of a startup.
Regardless of whether you are just getting a good
idea off the ground, looking for investors or already
enjoying your first sales, the KPMG team is there to
assist you with any business or legal issues. *Legal
services are provided by KPMG Rechtsanwaltsge-
sellschaft mbH.

77
ESM 2015 Sponsors

Telefónica Deutschland, its operationally active

subsidiaries Telefónica Germany GmbH & Co.
OHG and E-Plus Mobilfunk GmbH are part of the
Spanish telecommunication group Telefónica S.A.
headquartered in Madrid. The company offers its
German private and business customers post-paid
and prepaid mobile telecom products as well as
innovative mobile data services based on the GPRS,
UMTS and LTE technologies with its product
brands O2 and BASE as well as several second and
partner brands. With a significant presence in 24
countries and a customer base of 341 million acces-
ses, Telefónica is one of the largest telecommunica-
tions companies around the world.

Lottery winnings were sponsored by

78
Endnotes ESM 2015

1 Responses from countries with a sample size external capital received or planned.
of at least N = 30 were chosen for the analyses.
6 The annual revenue of startups from Romania
2 In the detailed comments regarding country and the Czech Republic are not analysed due to
comparisons, we sometimes summarise single an insufficient sample size for this question.
countries into larger categories in order to give
a better overview of the data. With regard to the
countries‘ geographical location, we are talking
about northern (Sweden, United Kingdom,
Netherlands), southern (Spain, Italy, Israel),
eastern (Romania, Poland, Czech Republic) and
western (Germany, Austria, Belgium, France)
ESM countries, following the recommendation
of the United Nations. In terms of the size of the
economies, we rely on the countries‘ gross
domestic product (cf., top three large economies:
Germany, United Kingdom, France; smallest
economies: Israel, Czech Republic, Romania).

3 Figures in this report might include differences

in totals that are due to rounding.

4 The numbers for the origin of employees

in Berlin were taken from the DSM 2015
(Ripsas & Tröger 2015).

5 Received and planned amounts of external

capital were assessed in categories. We referred
to the value that lies midway between the lower
and the upper value (e.g., for the category
“€ 25,000 and € 50,000”, we used the value
€ 37,500) to estimate the overall amount of

79
ESM 2015 Contacts

German Startups Association

Lisa Schreier – Head of Research and International Strategy
Schiffbauerdamm 40
10117 Berlin
Germany

+49 (0) 30 60 98 95 91 - 14
[email protected]
www.deutschestartups.org

University of Duisburg-Essen
Prof. Dr. Tobias Kollmann
Department of Economics and Business Administration
E-Business and E-Entrepreneurship Research Group
Universitätsstrasse 9
45141 Essen
Germany

+49 (0) 201 18 3 - 26 28

[email protected]
www.netcampus.de

80