Philanthropy and entrepreneurship: venture kick with an innovative support model for startups
20.12.2012
In the last 5 years, venture kick, a privately funded initiative, has invested more than 10 million CHF to support a startup boom at Swiss universities. This has been exceedingly successful: So far, it contributed to the launch of about 200 innovative companies out of 251 startup ideas – which have created around 2'000 jobs. The amazing growth potential of these young companies also attracted more financial supporters, which invested close to 400 million Swiss francs for their development.
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Venture kick will adopt a new support model including equity participation at the third and final stage, starting January 1st, 2013. All proceeds from the subsequent shares’ sale will be exclusively re-invested into the support of the next generation of promising entrepreneurs. This new model aims at strengthening the philanthropic and entrepreneurial approach of venture kick, where supported startups reaching success will be contributing part of their success to the young entrepreneur scene. It might take a few years before this new model brings concrete returns. Nevertheless, expectations are fueled by the fact that more than half of the companies currently ranking in the TOP 100 swiss startups have been supported by venture kick.
An entrepreneurial philanthropic model to support startups
The winner of the stage 1 (brilliant business idea) or stage 2 (solid business case) will continue to receive CHF 10'000 , respectively CHF 20'000 à fonds perdu as it is the case today, with a moral pledge of giving back to the entrepreneurial scene in case of success. The new participation model is applied at the final stage, where beneficiaries can receive an additional 100’000 CHF. The ownership level will be based on a valuation obtained at a qualifying round set for an investment of CHF 0.5 million or more at a valuation higher than CHF 1.3 million . If within 3 months before the stage 3 presentation date, the company has closed such financing round, venture kick will adopt this valuation. If no such financing round has taken place, venture kick will receive 10% of the company, and will adapt its ownership to the valuation obtained at the first qualifying round during the 24 months after the presentation date at the final stage, proportionally reducing its ownership.
Increasing the number of successful startups in Switzerland
The new support model is the result of a strategic reflection initiated by the Strategy Board of venture kick. Its main objective is to strengthen and clarify venture kick’s philanthropic and entrepreneurial philosophy where it is made natural to supported startups that their success will directly benefit future generations of entrepreneurs and thus to society. At the same time, the new model should contribute to the long term success of venture kick, helping to secure the support of many more innovative projects at Swiss universities. It should eventually allow reinforcing the cooperation with private investors, hence contributing to more private investments in the startups.
An entrepreneurial philanthropic model to support startups
The winner of the stage 1 (brilliant business idea) or stage 2 (solid business case) will continue to receive CHF 10'000 , respectively CHF 20'000 à fonds perdu as it is the case today, with a moral pledge of giving back to the entrepreneurial scene in case of success. The new participation model is applied at the final stage, where beneficiaries can receive an additional 100’000 CHF. The ownership level will be based on a valuation obtained at a qualifying round set for an investment of CHF 0.5 million or more at a valuation higher than CHF 1.3 million . If within 3 months before the stage 3 presentation date, the company has closed such financing round, venture kick will adopt this valuation. If no such financing round has taken place, venture kick will receive 10% of the company, and will adapt its ownership to the valuation obtained at the first qualifying round during the 24 months after the presentation date at the final stage, proportionally reducing its ownership.
Increasing the number of successful startups in Switzerland
The new support model is the result of a strategic reflection initiated by the Strategy Board of venture kick. Its main objective is to strengthen and clarify venture kick’s philanthropic and entrepreneurial philosophy where it is made natural to supported startups that their success will directly benefit future generations of entrepreneurs and thus to society. At the same time, the new model should contribute to the long term success of venture kick, helping to secure the support of many more innovative projects at Swiss universities. It should eventually allow reinforcing the cooperation with private investors, hence contributing to more private investments in the startups.