Tech startups and other businesses in Bulgaria and elsewhere around the region are getting cash injections from a program called the Joint European Resources for Micro to Medium Enterprises (JEREMIE).
This European Commission initiative works with the European
Investment Fund to enhance financial access for small businesses.
Countries in the European Union (EU) can take the program's allocations and
use them for venture capital purposes to create new
businesses or expand some that are already active. It can help these smaller
companies perform research and development, innovate, and share
technology. In general, the program promotes job creation in the regions where it's
The Startups in Bulgaria Research Report
from SeeNews shows that the JEREMIE program used two investment funds, Eleven
and Launchub, to handle $21.4 million from 2012 to 2015.
The JEREMIE funds are registered in Bulgaria, but much of the financial assistance actually comes through companies based in the
Startups and SMEs receive between $32,000 and $213,900 each,
based on various factors.
The report analyzes net profits of the startups, and discusses issues surrounding solvency and liability for these companies. It also presents some interesting findings. For example, after peaking in 2014, the number of founded startups fell
significantly the next year. In 2015, the majority of new companies did not
have positive net revenues.
One element that researchers measured is the “cash runway” of
each small business. Looking at cash runways and burn rates shows investors
whether a company is likely to survive through years of negative net profits and emerge victorious on the other side, as they bring products and services to
market and start to generate revenue.
As for the financial health of startups mentioned in the
report, several selected companies declined to respond to press questions.
However, Balkan Business Wire spoke with Nancy Mata about the
struggle that young tech companies go through to attract funding. Mata is
co-director of the entrepreneurship minor at Millersville College in Lancaster,
Mata said one avenue open to young entrepreneurs is the
world of social media.
“Today’s young entrepreneurs understand social media and are
using it to attract funding for their startup business,” Mata said. “Investors
are looking at how many followers they have and what they are saying about their
Another feather in a young tech startup’s cap, she said, is
“(The startups) totally get that design is important, so
you’ll see them bringing in a co-founder who is a designer,” Mata said. “Or
they’ll bring in a designer with their first 10 employees. I think for the
early generation of entrepreneurs, design wasn’t so important. So they’re
catching up now.”
In addition, Mata said, some SMEs are trying to acquire
funding through social media so that they can go back to the same investors for
multiple rounds, something that she said is not usually feasible through angel
“Young entrepreneurs are looking for investors who get what
they are doing and are creating partnerships that are meaningful,” Mata said, describing
the current environment where a firm’s journey can be just as important, or
even more important, than what it offers on a market. “Experiences are more
important than products now. In fact, experiences are products these days."
Bulgarian startups receive funding through European Union aid program
Organizations in this Story
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