Investing in technology-based companies has a lot of risks, yes. But it has turned out that investing in brick had much more. And so, in the last months, a situation of effervescence between entrepreneurs and business angels is being lived in Barcelona that is inspired by that idealized environment that is Silicon Valley , where there are many projects, a lot of capital, and all working in an interrelated way (” we are far away, but we are going in the right direction “, the interviewees agree). Three elements have been key in this maturation of the entrepreneurial ecosystem in Barcelona: there is already a trajectory of success stories that generate a virtuous circle of trust; these second-generation entrepreneurs act as mentors to the new ones, and private capital – and traditional investors – is reconciling with the internet.
The financing rounds of 200,000 euros, up to one million, are followed. Barcelona is consolidating itself as a center of reference for companies, with a clear focus on electronic commerce: the “veterans” Privalia, eDreams, Intercom, Atrápalo, Anuntis, LetsBonus, Trovit or ItNet, initiatives continue to be added: Groupalia, Ulabox, Uvinum.
A message also emerges from this situation: in the midst of so much negative discourse to which the conjuncture forces, there are also people who risk, who do things well, and who grow.
A year ago there were more than 500 private investors in the business angels networks in Barcelona. “The feeling is that venture capital has doubled in a short time, and there are many more business angels, ” they say from one of the most active institutions. “A lot of private money came to the Internet in 2000 and it went wrong, now it’s back,” says Luis Martín Cabiedes, from Cabiedes & Partners.
Carlos Blanco, entrepreneur and investor in SeedRocket and First Tuesday, corroborates that more and more people are interested in investing in internet businesses. “A business angel brings investment, but also networking and knowledge.” From his experience, he recommends investing in blocks of 8-10 projects, “if not, it will be difficult to achieve profitability”. Business angels put their investment, but in return demand commitment: “I’ll leave the money, but the entrepreneur has to leave health,” says Albert Domingo ironically.
Meetings and accelerators that specialize in technology (following the US model the Y Combinator example) are on the rise to connect projects and money, around forums, on campus. Like Seedrocket, First Tuesday, the British Rockstar implanted here with Samba Accel; they are also driven by Iese and Esade, others such as Keiretsu, or international meetings such as SeedCamp. It is very common for them to co-invest among themselves. Investors pay a fee to be part of the network and access entrepreneur projects.
But the big companies have also put their batteries. Telefónica has just launched Wayra, an accelerator for technological projects that has been tested in Latin America and now starts in Madrid and Barcelona. And La Caixa, through Caixa Capital Risc, aims to become an energizer of the ecosystem.
Currently, business angels can benefit from a deduction of 30% of the amounts invested, with a maximum of 6,000 euros, explains Albert Colomer, director of BANC Business Angels Network Catalunya
“But doing business angel is not enough to live on,” says Marek Fodor, who was the co-founder of Atrápalo, now a mentor in SeedRocket. “Yes, it’s a sustainable hobby.” Fodor believes that the strength of Barcelona is not so much a question of money as of entrepreneurs’ production: “You work in one of these companies -Intercom, eDreams- and you want to start your own company: it’s a growing ball”.
“Barcelona is at European level in medium investments”, corroborates Luisa Alemany, from Esade. One of the keys to success is to look for it ten years ago, in the creation, from the Cidem, of the Xarxa d’Inversors Privats. And in the work of Barcelona Activa.
The professor of the Iese Pedro Nuen or suggests investing in entrepreneurs as an alternative to the pension plan: “If throughout your life you invest with some skill, you can create an important pension plan”, explains what he himself learned at Harvard of Professor Howard Stevenson.
In seed capital, it is considered that there is enough structure, but the next step is still missing: “lack of venture capital funds”, points out the entrepreneur and investor Martin Varsavsky, who however considers that “in Spain, Barcelona is the city that has more technological potential “.
But this effervescence does not mean there are fewer failures. Luis Martín Cabiedes acknowledges that “80% of the investments do not work from the point of view of profitability for the investor, with the other 20% you have at least to multiply by 10 the investment”. That is possible “if you diversify and choose well”.
Barcelona is on the way to being the cluster of entrepreneurship in southern Europe
as in the United States are Silicon Valley and Boston, and in Europe, Cambridge or Berlin. We already have the companies and the environment that exert the tractor effect. Lack of critical mass and capital to ensure the next phase, which makes the investment cycle profitable.
Pioneer network, created in 2008, provides new entrepreneurs with training, financing, and advice, in the campus format, and common space in the business accelerator (within Barcelona Activa). The mentors, more than 30, are successful successors, such as Vicente Arias, Jesús Monleón, Carlos Domingo, Eneko Knörr, Lluís Faus, Marta Esteve, Carlos Blanco. He has advised 120 startups; in 2011 they invested 5 million. They emphasize that 20 of the startups promoted have created 300 qualified jobs, such as Webphone, EscapadaRural, Offerum, Glamourum, Deporvillage or Uvinum.
Network under construction, under the umbrella of the association, that since before the internet bubble organizes the First Tuesday meetings on the first Tuesday of every month, in Barcelona, Valencia, Seville, and Madrid.
The business school created a network of private investors in 2003; it has celebrated 57, in which more than 400 entrepreneur projects have been presented, and 44 have found funding (from 100.00 euros to one million). Among the supported companies are Privalia, BuyVip or Impact media. In addition, the investment fund Finaves accompanies student projects (Aïta, AdvanceMedical, Fractalia, Kubiwireless).
The network of investors promoted by the Entrepreneurs Club of Esade Alumni doubled in 2011 its investments: 2.7 million in 15 startups, among them: EyeOs, Visualnet or Wuaki.tv (in 2010 were 1.4 million in 6 Projects). Its activity has materialized in ten forums, in which 85 private investors participated and 200 projects were presented.
Telefónica Initiative, created in 2011 in Latin America, now in Madrid and Barcelona, and is expanding. Ten projects are selected among those received (in Barcelona 300) and are protected for six months (in an Operación Triunfo-style academy for entrepreneurs). “The maturity of the teams and projects we have found in Barcelona is spectacular, the best we have seen,” says Gonzalo Martín Villa.
Caixa Capital Risc (2004) invests in life sciences, information technologies and the internet; led by Carlos Trenchs, has invested 35 million in some 80 companies (SabirMedical, Sagetis, Genmedica, Privalia, Groupalia, Zyncro, Urbiotica, and Lex). For the initial stages, it makes small investments in participative loans, which allow it to diversify into more projects and deepen its monitoring.
Venture Cap started ten years ago, driven by six families (with industrial experience) and linked to GVC Gaesco. New technologies account for half of its twelve investments. “In the beginning, the sovereignty was held by the entrepreneurs and astronomical assessments were made; now the internet is a more mature sector, “says Victoriano Peralta, CEO. They were the first partners of Dídac Lee in IntercomGi.