Call by the Hellenic Business Angels Network to the Greek government for immediate preventive measures against the imminent financial crisis to protect Greek startups in the face of the Coronavirus threat
To the Prime Minister of the Hellenic Republic
cc: Minister of Finance
cc: Minister for Development and Investment
March 13, 2020
Dear Mr Prime Minister,
Given the current and imminent threats posed by the Coronavirus not only to people’s health but also to the economy of Greece, we, the Hellenic Business Angel Network, feel obliged to bring to your attention the imminent threat to the Greek startup community and kindly ask you to urgently consider available proper means to promptly address this high risk in order to avoid further damage to the Greek economy.
As other countries, Greece will soon face the consequences of the current crisis in the form of postponements of private investment decisions, supply chain disruptions and serious reductions in customer orders. Limited access to capital will force many innovative startups into bankruptcy.
The most imminent issue is the lack of resources to fund their day to day operations and teams. With limited cash reserves and virtually no access to the traditional banking sector, startups and innovators are entirely dependent on their personal savings, investors and grants to support their growth and development.
We call on the Greek government to take immediate action and work in coordination with the European Commission to set up and implement programmes that can offer liquidity to startups, innovative SMEs, as well as small research and innovation projects affected by the current crisis and the possible new economic and financial downturn it may lead to.
While established companies may have the possibility to endure this by obtaining bank loans, startups have no collaterals to provide to banks for loans. Public institutions such as State-owned or State-supported financial institutions must be prepared to quickly process requests for short term credit and offer loan and/or grant products in a timely manner to startups, innovative SMEs and innovators in need of cash.
There is a real risk that many of the recently successfully established startups in Greece will be put out of business or have their operations interrupted by this new crisis. The steadily rising and considerable contribution of startups to Greek employment numbers is under great risk.
Extraordinary preventive measures should be taken immediately by the Greek government to provide the innovation and entrepreneurship ecosystem with access to cash so as to finance working capital needs, thus avoiding massive losses of jobs in this specific sector of the economy.
The many efforts having been undertaken in Greece in the past years by all stakeholders in support of innovation and entrepreneurship to help build up a thriving startup scene will most likely be annihilated through the current threat if the state cannot promptly provide an appropriate and suitable support mechanism.
We, as HeBAN, national member of EBAN – The European Trade Association for Business Angels, Seed Funds and Early Stage Market Players, would welcome the opportunity to be invited together with other essential stakeholders of the innovation and entrepreneurship ecosystem to provide further input on this pressing issue.
The ‘Call for Member States to Provide Liquidity to the Startup and Innovation Ecosystem’ by EBAN can be found here.
On behalf of the Hellenic Business Angels Network (HeBAN)
Panayiotis H. KETIKIDIS