Guest Editorial Series: Charles Sidman and ECS Capital Partners

 

In the first edition of our Guest Editorial Series, we are pleased to hear from Charles Sidman presenting ECS Capital Ventures:

Everyone involved in the European Business Angels Network (EBAN) itself, and the entrepreneurial community as a whole, understands that investments in the early-stage ecosystem constitute a unique, attractive and critically important asset class.  Not only do multiple studies show that these investments generate higher returns on average than other major asset classes, but these returns are largely uncorrelated with those of other assets and therefore play a valuable role in anyone’s overall portfolio.  Most importantly, investments in this asset class provide essential support to the entrepreneurs and their enterprises that are the true engines of economic development worldwide, generating the increased wealth, jobs, taxes, standard of living, etc., that societies and governments so value.

Unfortunately, several economic facts of life, plus happenstances of historical development, make our present early-stage financial system less functional and attractive for participants and stakeholders than it could be.  With many players operating effectively in silos with primarily their own kind, there is too much one-size-fits-all thinking rather than respect for and fostering of diverse policies, participants and mechanisms.  We know from biology that the more diverse an ecosystem, the greater is its functional potential and robustness.

Of great concern, the vast majority of individuals and parties that have sufficient capital to participate in this asset class do not do so, due to expressed concerns about risk, feasible and adequate diversification, complexity, (in)efficiency, competition and/or the sheer effort required.  For the sakes of everyone involved or affected, we should enable the participation of these absent players through means that are agreeable and respectful to them and do not require unwelcome activities or pursuits.   On the other hand, everyone who is active today or becomes so tomorrow will benefit from better collaboration at all levels.  In particular, more plentiful and diverse deal flow and access, greater consensus concerning fair and effective deal terms, better joint pre-investment diligence and post-investment monitoring, and more effective pooling of financial resources are aspects that could be significantly improved for the benefit of all.  All of these issues are well understood by EBAN and its members.

ECS Capital Partners, an active associate member of EBAN, has been designed to contribute to just such integration, synthesis and collaboration in the global early-stage ecosystem.  It is committed to superior financial returns, primarily from enterprises based on sophisticated (“deep”) science and technology, but simultaneously, for reasons of both ethical choice and compelling market needs, with companies producing positive social, environmental, or human impact (summarized in the United Nations’ 17 Sustainable Development Goals, or SDG’s).  ECS is now raising up to $100MM USD, to operate from the earliest stages of start-up development (particularly in collaboration with active Angels and their groups worldwide) through later (usually VC-dominated) growth.  Due to active external collaborations as well as vertical integration within ECS, Angels and their groups will have access to broader deal flow opportunities, more funding for local companies, and financial resources to continue to be represented and safeguarded in later rounds.  Larger later-stage investors will benefit from a greater supply of well-known and deeply understood candidates for follow-on funding.

For individuals and entities not opting for active direct involvement, ECS provides an entire multi-stage, diversified portfolio in this asset class, managed professionally and with adequate financial resources and discipline, for as little as a $25K USD commitment.  Additionally, with participation in several hundred well chosen initial companies, and follow-ons in the more successful, ECS will provide its investors with an Intelligent (i.e. still highly selective) Composite or Index for the early-stage asset class.

Marathon Venture Capital are providing evidence that the network of Greek entrepreneurs and technologists is consistently growing and its underlying value is increasingly materializing. By various accounts, the Greek startup industry has now reached an inflection point, triggering a virtuous circle.

The Greek Startup Industry: Investments and Exits, 2010-2020 is a publication documenting the industry’s evolution, focusing on the facts. Such include, among others, investment figures and related statistics. Marathon Venture Capital has made an effort to track every single technology company with a Greek founder –our definition of a Greek startup– that raised an investment round and/or completed an acquisition or IPO since 2010.

Their inputs include publicly available sources such as Crunchbase and media publications, together with proprietary Marathon data. While there most probably exist more cases they did not manage to capture, they believe this is the most extensive research on Greek startups published to date. For the first time, Marathon Venture Capital are also sharing a full list of such publicly available data in spreadsheet format, hoping that opening up such a resource to the community will spark further interest and create more opportunities in the space.

 

Read the Report Here

Start-ups and scaleups success is currently more crucial than ever. As Europe emerges from a difficult period, the economy and society’s recovery are essential. Start-ups play a role in this process, as they have the capacity to develop breakthrough innovations in response to real-world needs. Despite this capacity, start-ups seem to be part of the most affected groups during this pandemic, having an increased difficulty in securing funding. In response to this, the European Commission has announced the creation of the Start-up Nations Standard of Excellence: an initiative aimed at pushing European countries to support start-ups in each stage of their development.

By signing the standard, member states agree to a series of actions to ensure that all start-ups and scaleups in EU countries benefit from the best practices underpinning Europe’s and the world’s most successful start-up ecosystems. Actions suggested to member states focus on the following:

The initiative received the support of 24 member states at the Digital Day 2021 event.

EBAN is delighted to hear this, as SNS will help push forward our main goal: getting start-ups to scale-up. ” I think the EU’s SNS (StartUp Nations Standard) is a great initiative and am pleased that nearly all of the EU member countries have already signed up” says Jesper Jarlbæk, EBAN Treasurer and DanBAN Chairman. “The key thing now is to translate words into action in all EU member countries. I am convinced that EBAN, with its extensive coverage and reach across Europe can be a valuable contributor to this effort. This can be done by identifying and promoting best practices and then encouraging all the countries to follow suit.” Janne Jormalainen, EBAN President and FiBAN President Emeritus, shares this excitement. “Start-ups needs are different from established companies. Access to talent as well as maintaining talent are the key success factors of start-ups and the SNS initiative facilitates just that.” he says. “The acceleration of visa processing and allowance of stock option issuance are especially welcome”. Through this initiative, the European Commission is pushing Europe at the front of the global tech race.

Prof. Panayiotis H. KETIKIDIS, Hellenic Business Angels Network – Founder of HeBAN & EBAN Board Executive Committee Member, wraps it up perfectly: “Even before the outbreak of Covid-19, Europe had decided to strongly commit herself to an innovative, green, and digital economy. The current pandemic accelerated the determination of many national governments to fully acknowledge the important part that start-ups and scale-ups are able to play in this development and spurred the implementation of necessary measures. This insight and the willingness to act in a concerted European context on initiatives, such as the EU SNS, the InvestEU as well as the EIC, now enable Business Angels across Europe to seize the offered opportunities in a much more effective way. As Hippocrates already suggested in ancient times: “Time is that wherein there is opportunity, and opportunity is that wherein there is no great time”.