190 million euros for innovative businesses in southern Italy: the new Thousand.
In September a new opportunity for startuppers and innovative companies based in southern Italy was created: the Smart and Start
initiative offered by Invitalia on behalf of the Ministry of Economic Development.
Those who want to open or are already based in Calabria, Campania, Puglia, Basilicata, Sicily, or Sardinia can access this fund of 190 million euros (that foresees neither repayment nor capital shares in the invested companies). The maximum contribution that each individual company can receive is between 200,000 and 400,000 euros, which is determined by a series of parameters (type of innovation, developmental state of the company, geographic location). Therefore, funding enough for about 1000 new companies – the new Thousand.
In order to understand the importance of this initiative, the context must be addressed: in 2012 about 120 million euros (data from Aifi and Iban) were invested in innovative companies throughout Italy (much less than the 700/800 million in France, Britain and Germany); of this total almost 40% was invested in companies in the northern region of Lombardy alone. On the other hand, only about 10% (about 12 million euros) went to companies in the southern regions.
Even though funds may be rationed out over a period of years, the Invitalia initiative, represents an opportunity without precedent for the creation of innovative businesses in the south: in fact, all studies of the sector claim that innovative enterprises are created where there is a mix of venture capital, public intervention, and procurement by large companies dedicated to innovation (Israel, Silicon Valley).
Recreating this virtuous combination in Italy, and in particular in the south of Italy, requires a coordinated effort between private and public actors: but the key resource is still venture capital and its methodologies for managing high risk investments.
For this initiative, Invitalia has decided to adopt an innovative approach: unite the methods used by private venture capital in selecting projects together with the management of a publicly funded program that companies/entrepreneurs can participate in solely via internet.
But this is not enough: the success of this initiative also depends on a double challenge: on the one side, the entrepreneurs, the young people in the south, must demonstrate that they are capable of drafting proposals for projects of qualitative and innovative superiority, that is, that reach market level standards.
And on the other side, Invitalia must ensure that the selection procedure is both simple and, above all, transparent and rigorous like those that is currently used by venture capitalists.
In order to win this double challenge, Invitalia has planned and realized:
– a series of presentations on the initiative throughout the south, and made personnel available to help people draw up the projects themselves
– a website
where the entire enrollment process can be completed. Each step is visible and can be traced
– an initiative that has no deadline (this is important to take note of), it is completely open and offers a large amount of finances. As of today, about 2,000 registrations have been made
– a selection process that foresees a series of passages in a specific sequence:
1) a formal verification (managed by Invitalia itself) of documents;
2) an interview to get to know the proposing team;
3) evaluation of the proposal by an expert committee (qualified sector workers: venture capitalists, incubators, associations, university professors) who analyze each project and vote whether to assign a contribution, or to ask for more information, or reject the request
I think that this program is a huge opportunity for all of the startuppers in southern Italy and the will of the entire country to prove that public intervention in Italy (as in Europe that intervenes in 40% of total investments for innovative companies) can also be useful and based on methods and practices and, above all, transparent. And even this is part of “let’s change everything”.