Where Angels Don’t Fear to Tread
December 30, 2016
A pilot EU program is under way in Poland to encourage so-called angel investors to put their money in Polish startup companies.
Funded by the European Commission, the Early Stage Investing Launchpad (ESIL) program was launched in Poland several months ago. It is being carried out under Startup Europe, an initiative that is part of the EU’s Entrepreneurship 2020 Action Plan.
The program’s primary goal is to educate and motivate private investors, called business angels, in selected member states where this form of investment is only emerging. The objectives are to be accomplished through international education and networking projects.
Phase one of the program, ESIL Pilot, is being carried out in Poland, Romania and Slovakia. These three Central European countries still have a comparatively small number of angel investors, and the local angel investment markets are poorly developed. As a result, little private capital has been invested in innovation in the three countries.
ESIL Pilot particularly focuses on investment mechanisms designed to support innovative startup companies along with small and medium-sized enterprises operating in the new technology sector. The program also fosters joint international investment by different “angel networks” in EU member states.
The pilot program will continue until December 2016 and if it proves successful, more elaborate forms of support will be made available as part of the EU’s Horizon 2020 framework program.
Part of the ESIL program in Poland was a conference for angel investors held in Warsaw Oct. 27 by several European and Polish business angel organizations, including Business Angels Europe, Cobin Angels, the Meta Investment Group and Poland’s National Contact Point for EU Financial Instruments. The conference was held under the auspices of the European Commission and two Polish ministries, the Ministry of Development and the Ministry of Science and Higher Education. A national institution representing the angel investor community in Poland was set up during the event.
Poland’s Deputy Prime Minister Jarosław Gowin described the local angel investor market as a crucial element of the government’s efforts to secure access for the academic and economic communities to funds for innovative projects. “The ESIL program is an education-oriented instrument that seeks to develop the business angel community in Poland and as such, it will certainly help us pursue these goals,” said Gowin, who also serves as science and higher education minister.
Through ESIL Pilot, Poland can develop its business angel community as an important segment of the money market. This segment is only emerging and so it has high potential for growth, according to experts.
Jadwiga Emilewicz, undersecretary of state at the Ministry of Development, said that ESIL Pilot was meant specifically for newly established high-tech and ICT businesses. “Its objectives converge with national measures aimed at stimulating this market segment and I hope Poland will use the program to the fullest,” Emilewicz told the Warsaw conference. “The Polish government wants to encourage private investors to actively invest in innovation and new enterprises,” she added.
At the EU level, ESIL is being coordinated by Business Angels Europe (BAE) and the European Business Angels Network (EBAN), while the Cobin Angels and Meta Polska networks are the program operators in Poland.
According to Jacek Błoński, a board member at Business Angels Europe, business angels are a key source of funding for businesses in their early development stages. “They have been gaining importance in Europe with each passing year,” said Błoński, who represents the Meta Group in Poland. “Governments in individual countries have been devising mechanisms to help this sector grow, complete with various kinds of tax incentives. I hope projects such as ESIL Pilot will help work out a joint, cohesive program to boost the business angels market in Poland, and produce numerous technological companies ready for competition on global markets.”
Robert ¸ugowski of the Cobin Angels network spoke about business angels’ financial and personal involvement in innovative enterprises. “They are an underpinning of every well-developed market,” said ¸ugowski. “A lot needs to be done in Poland in this department, because the most developed countries such as Britain and France have 10 times more business angels than Poland. We trust that training programs such as ESIL … will soon allow us to catch up.”
Thanks to ESIL Pilot, Poland has been able to utilize EU funds assigned specifically for stimulating the business angels sector. The interest in investment of this kind has been on the rise in Europe, according to experts, and business angels are emerging as a vital constituent of the startup ecosystem, especially for budding innovative companies.
In Poland, ESIL Pilot operators have formed a partnership with the National Contact Point for EU Financial Instruments, an institution tasked with promoting and facilitating the use of financial instruments available under EU Framework Programmes. According to the institution’s director Arkadiusz Lewicki, Poland has been highly efficient in applying for EU funds aimed at stimulating enterprise through the financial market.
“In addition to refundable instruments, we have been using ‘soft support’ such as education, mentorship and exchange of expertise with more advanced markets,” said Lewicki. “All of this put together should result in better access to funding for startups, innovative ones in particular.”
Source: Polish Press Agency