
Switzerland government raises investment funds to support Swiss startups - bontoJR
https://www.swissinfo.ch/eng/economic-impetus_swiss-start-ups-to-enjoy-huge-cash-boost/43303776
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tmsldd
Although it is nice to have more funds available, which increases the
competition among VCs, the main point is not lack of funds. I used to say that
a good VC brings you two important things: money and market. Money alone
doesn't bring you much (don't get me wrong ..). In my eyes that is the main
issue in the startup scenario in Switzerland: lack of market. Having a
population of about 8 million people means that your startup has to focus in
exporting products & services since the beginning... which adds some layer of
complexity/bureaucracy ... Startups tend to establish themselves as close as
possible to the client market to simplify as much as they can their initial
operation..

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bontoJR
> Although it is nice to have more funds available, which increases the
> competition among VCs, the main point is not lack of funds.

I agree on that, on the other hand I don't see the lack of market as a big
problem. I like to take Spotify as example, it started in Sweden, which is a
market comparable to the Swiss one in terms of size, but after the first
prototypes and early versions, it went global almost immediately.

Schneider-Ammann said that a change of mentality is required in Switzerland.
He noted that while in the US, business failure is greeted with a “better luck
next time” or with a similar attitude, on the other hand, in Switzerland, “if
you fail with your business idea here everyone points the finger at you. You
are branded a looser”. This seems to be the main goal and I totally agree with
him.

IMHO, a company can move to a global scale from the start with the right plan,
but it's the mentality and the fact that Swiss VCs care more about patents and
product protection preventing Swiss Start-up to compete with the rest of the
world, instead of caring about quality of the actual product and picking the
right time to enter the market.

I heard some stories about companies collecting 500-800k in seed investment,
spending 50% of it in legal fees protecting a product they still have to
develop, failing later in execution for lack of cash... this is what, I think,
needs to be fixed in Switzerland.

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tmsldd
I understand your point. Yeah.. this is king of a ecosystem.. which needs to
be balanced. The good news about the report is that it shows a mindset shift..
Switzerland is stable, warm (people) and radiates freedom .. for sure it is a
good candidate to become the next hub.

~~~
opportune
It also has a lot of capital (although perhaps not necessarily risk-capital),
and seems to be the only place in Europe that pays developers comparably to
their pay in the US.

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malthaus
There are a lot of political initiatives, corporate accelerators etc going on
at the moment but they don’t fix the inherent problem here in Switzerland:
Cost of living is absurdly high, unemployment is low and life is just really
convenient. Why risk it all for a startup when you can just cruise through
life with a 42h-week and long lunches at a bank and save a ridiculous amount
of money doing so.

Because of this cultural issue and the fact that a overproportional number of
very large corporates are based in Switzerland, the whole ecosystem is geared
towards that. One part is certainly that there is basically no VC money
available but just throwing a bunch of money at it won’t fix the underlying
issues.

~~~
literallycancer
>Cost of living is absurdly high, unemployment is low and life is just really
convenient.

My understanding is that the cost of living is very reasonable, with what the
average person gets paid. Almost everyone else in Europe spends a bigger
portion of their income on accommodation, food, clothes, commuting etc. while
the cost of electronics, cars, vacations and so on remains the same.

~~~
malthaus
Of course it's in sync with wages, you live comfortably even as a waiter - but
it requires you to have a steady income. The threshold for ramen profitability
is a lot higher than elsewhere which makes it harder to spend significant time
on a startup without funding.

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mschuster91
The main problem for Switzerland is not a lack of venture capital, but rather
the Swiss Franc.

Cost of living in Switzerland is extremely high, which means a company has to
pay huge salaries, and thus command bigger prices for its product. While that
works fine when the product is luxury watches, diamonds or highest-quality
cheese, it does not work out for "mass production goods" as any product (be it
a physical product or a web service) can be cloned in the EU or in China for
way less and then sold to Swiss people...

~~~
siscia
I dont think that Switzerland is more expensive than say San Francisco...

While it is true that is one of the most expensive European countries the cost
of living is very close to the one in the bay area...

~~~
fla
It is not much a matter of cost of living but rather cost of the Swiss Franc
versus other currencies.

Currently, the swiss Franc is very strong, therefore making any Swiss product
expensive to the exterior.

It can become a huge problem for an economy based on trading with neighbors.

~~~
siscia
Actually, the Swiss franc is at one of its lowest points in the 10Y view [1]

A Swiss franc is traded at roughly 1.09 Euros, I would say significant, sure,
but not a deal breaker in high-tech industries. If we were talking about
commoditized products I would have to agree but in our industries this is just
not the case.

[1]:
[http://www.xe.com/currencycharts/?from=EUR&to=CHF&view=10Y](http://www.xe.com/currencycharts/?from=EUR&to=CHF&view=10Y)

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1wd
It's the other way around: EUR/CHF=1.09 means 1EUR=1.09CHF.

> [2011 to 2015] the Euro was exchanging [at] CHF1.20. [Then] the exchange
> rate stabilised to between CHF1.05 and CHF1.08 to the Euro, due in large
> part to further intervention from the SNB which discreetly set about buying
> up foreign currency to ensure the franc did [rise to] new heights

[https://www.swissinfo.ch/eng/business/money--money--
money_sw...](https://www.swissinfo.ch/eng/business/money--money--money_swiss-
economy-slowly-recovering-from-exchange-rate-shock/42799542)

~~~
jevgeni
There's a slight error there. SNB was buying foreign currency to lower the CHF
exchange rate in an effort to protect the Swiss export industry.

~~~
1wd
Yes, sorry, I meant to write [not rise to].

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xkr
It's not clear from the text how they define "Swiss startups". For example,
being a foreigner, can I start a company there and ask for an investment?

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eps
> _Can I start a company?_

Depends on where you are from exactly.

If you are an EU national, then you can. Otherwise you will first need to get
a work permit (against a promise to start a company, reviewed and approved by
the canton) and it's generally a slow and expensive hassle requiring an
experienced attorney. Whether this will make your company eligible for a
startup loan is an open question, but I'm pretty sure that it will.

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craigvn
I would suggest the main reason they leave is the US is the largest single
country market that is accessible. China is probably a bigger market going
forward but for western companies a bigger cultural change.

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kyledrake
Liberalizing their immigration laws that prevent availability of talent for
startups (and everyone else) is a better solution to this problem than just
throwing together a giant pile of dumb money. But that's going to require some
pretty existential changes to Switzerland that I sincerely doubt they're
actually interested in making.

~~~
raverbashing
They can have anyone from the EU and getting a visa is not hard (with
sponsorship)

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kyledrake
Switzerland has 8 million people that can work without nasty visas and their
related problems. California has 321 million.

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raverbashing
Read that again: "They can have anyone from the EU" (with no need for visas)

That's 510 Million people - take 65Mi out when the UK leaves but that's still
a bigger number (Google gives a total European population if you google that,
but that's a wrong number)

~~~
kyledrake
Swiss voters are trying to tear that up: [http://www.expatica.com/ch/visas-
and-permits/Guide-for-EU-EF...](http://www.expatica.com/ch/visas-and-
permits/Guide-for-EU-EFTA-citizens-and-family-moving-to-
Switzerland_443220.html#Freedom)

Also WTF is a "residence permit". It sounds like a visa to me, and has similar
requirements.

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Klockan
The typical procedure for getting a permit to Switzerland is to first move
there and when you live there you go get it automatically at your nearest
office, you will never get rejected as long as you have a job.

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valentinebm
>87% of investment in Swiss start-ups comes from abroad.

Wow. Definitely time to give a cash boost.

~~~
malthaus
It's not for the lack of capital though.

The capital is already here, it's just not used for VC investments due to
reasons on both supply and demand side.

