Allied For Startups, one of our partners, in collaboration with France Digitale and European Startup Network, have made a report outlining 13 recommendations for national governments and other (international) organisations. The recommendations can be split up in the fields of investment, talent and policy, in regards to working in a post-COVID economy. 

The 13 recommendations are:

INVESTMENT:

 

  • Adapt the Temporary Framework on State aid liquidity
      • The report asks f0r more flexibility for Member States to provide liquidity support to startups. Furthermore, the report asks for a reform of the definition of “Undertaking in difficulty”, resulting a wider range of startups fitting the description and becoming eligible for State aid. Lastly, Member States should explore alternative aid instruments

 

  • Balance safeguards and financing needs of the economy
      • Foreign investors are significant contributors to the financing of our technology ecosystem, therefore safe and workable foreign investment rules should be implemented to facilitate Foreign Direct Investment.

 

  • Design EU funding programmes for startups
      • The report advises expansions in the EU funding for budgets such as Horizon Europe (asking for a budget of €120 billion), Digital Europe (€15 billion), and InvestEU (€100 billion), among others.

 

  • Unleash private capital through a multi-tier plan
      • The report asks for the set up of an incentive scheme in every EU Member State similar to the UK’s EIS, SEIS and SITR instruments. Furthermore, it asks for a significant increase of tax relief for investment in startups in the Member States, allowing capital losses on securities to be offset against all taxable income. 

 

  • Strengthen the roles of public funding
      • The report has set out different steps to strengthen the roles of public funding. Among others, The European Investment Bank should offer bounce-back loans that are guaranteed against government collateral and interest-free in the first year. Moreover, The European Angels Fund (EAF) of the European Investment Fund (EIF) should also extend to other EU countries .

 

  • Formulate procurement rules that are more open to startups 
      • The goal would be to achieve 20% of public procurement covered by startups or in cooperation with startups. 

TALENT:

  • Create an EU wide startup visa 
      • Startups visas should be updated to lower the administrative burden for startups when it comes to hiring talent from around the world, and be extended from not just founders, but also early stage employees and developers

 

  • Unify and extend stock options schemes at the EU level 
      • EU Member States should work for the unification of Stock Options schemes across Europe, to avoid startups having to adapt to 27 different schemes and taxation. An EU harmonised Stock Options scheme should be open to as many startups and employees as possible, offering favourable treatment in terms of regulation and taxation

 

Promote digital and entrepreneurial skills in education 

      • The report advises actions such as encouraging free training in coding or entrepreneurialism for all, and encouraging cross-borders skills exchanges programmes intra and extra-EU. 

POLICY:

  • Provide entrepreneurs with a digital one-stop shop
      • Develop and complete the one-stop-shop that collects information, useful tools, and potential public funding programmes

 

  • Shape legislative tools that welcome innovation 
      • The report advises to design sandboxes for startups whenever there is sweeping new legislation where there is room for interpretation

 

Harmonise EU rules in the Single Market

      • wherever possible, rules should be harmonised from the outset.

 

  • Enhance and simplify global trade for startups to scale 
      • WTO & OECD bodies should be used to underline the free flow of data and build robust data adequacy agreements, and prevent trade barriers.

Allied For Startups concludes that the COVID-19 crisis can be seen as an opportunity to adapt the economy to the world’s biggest challenges and startups should play a role in this adaptation. With the right liquidity support, investment incentives and the regulatory framework, startups will be able to unleash their potential to the benefit of citizens and the economy at large.

For more information and clarification on the recommendations, find the report here