Startups and scaleups are drivers of innovation and important job creators. They play a crucial role in any country wanting to ensure its future economic well being, especially in challenging times like today. That is why, in a joint initiative, the Belgium startup ecosystem calls on federal and regional ministers to support Belgian startups and scaleups with a state guarantee.
The Corona crisis is having a tremendous impact on our economy and labour market. The speed and agility so characteristic of startups and scaleups will be key in dealing with and recovering from the current situation. Over the last weeks, the Belgian startup ecosystem demonstrated its willingness to take responsibility by developing solutions in the COVID-19 domain (Bingli, DNAlytics, Robovision, Savics, Andaman7, UgenTec, ... ) or the StartupsXCovid19 solidarity platform where over 150 startups joined forces.
However, our startups and scaleups are facing another challenge threatening their existence: imminent liquidity issues. To tackle this threat, the Belgian startup ecosystem is calling on our federal and regional governments to support our startups and scaleups with a state guarantee.
The liquidity issues the startup ecosystem faces caused by COVID-19 inspired risk aversion, uncertainty, and fear. As a result, the majority of our startups and scaleups see customers backing off, new contracts postponed, investors and financiers hitting the brakes. More than half of the digital startups have a runway of about six months due to a lack of financial buffers. The liquidity issue will soon hurt our startup’s and scaleup’s competitiveness in a fast-moving globalised economy. It will lead to the near-complete dissolution of the Belgian startup ecosystem.
Government loan guarantee scheme that allows for startups to obtain 75% of their 6- to 12-month liquidity bridge funding through a (90% guaranteed) medium-term bank loan, if the startup is deemed to be viable pre-Corona.• Public-private co-investment for larger start-ups
Specific public-private co-investment scheme that allows for larger, revenue generating startups to obtain a 1-to-1 matched equity and/or a convertible public coinvestment, with a call option to acquire the government co-investment post-crisis.• Expanded tax shelter for start-ups & scale-ups
Expanded tax shelter scheme to make private investment in startups more attractive, by combining an increased tax reduction of 60% on investments with increased limits per startup (500.000 euro) and per person (200.000 euro).
As the Belgian startup ecosystem, we appreciate the efforts that are already being made, like the €250 million program of the Flemish government to provide subordinated loans to Flemish startups. We encourage the Brussels and Walloon governments to step up the plate in a similar way for their startups as well. In addition to the state guarantee we propose, such measures make a positive difference to our Belgian startup ecosystem.
France and Germany already showed vigor and leadership by taking the right initiatives to help their startups. The Netherlands is moving in the same direction. Now the Belgian startup ecosystem calls on the federal and regional ministers of Belgium to follow suit and support our startups and scaleups via the state guarantee.
Let’s future proof our economy, welfare, and prosperity together!
This call is an initiative of more than 1027 startups: