SICTIC and Credit Suisse scrutinise the Swiss startup scene

The Swiss startup scene is diverse, dynamic and growing at an unprecedented rate, making it a vital contributor to the Swiss economy - In 2022, the country recorded 1,009 startups per million working-age individuals. However, the difficulties that startups encounter at different points of their development, the contributions of various stakeholders to a startup’s success, and the type of assistance that founders seek from investors are less investigated. To address this issue, Credit Suisse collaborated with SICTIC, the most prominent angel investor club in Switzerland, to access its network of startups and investors. They conducted a survey with startup founders mainly within the SICIC community and 100 fully responded to the survey questions. Here are some insights from the resulting study: “Credit Suisse Startup Study 2023.”

These are some of the critical takeaways from the study.

Financial and non-financial support
Startups’ primary source of support is family and friends (80%) and fools (57%), followed by angel investor clubs (55%) and venture capitalists (39%). 60% of the startups wish for more support from the last two investor groups – currently, their selective nature and limited access are limited, creating obstacles. The survey results also indicate a clear disparity in importance between Swiss and European Union (EU) support programs. An overwhelming 69% of the surveyed startups deem Swiss support programs crucial for their success, while only 32% consider EU support programs important.

Human Capital: scarce qualified personnel -advocating for a startup visa
There is a significant shortage of qualified workers – 46% of the startups struggle to find suitable candidates in the Swiss labour market, and recruiting foreign personnel poses additional challenges. It is, therefore, not surprising that most startup founders (56%) support the idea of a startup visa. Furthermore, the survey shows that about 20% of startups, especially in the early stages, find it hard to retain their employees because of limited financial resources.

Internationalisation: the Swiss market is small
Startups need to look beyond Switzerland for growth and attract investors. 88% of the surveyed Swiss startups are currently operating internationally by engaging with foreign stakeholders (78%), selling products or services abroad (72%) or actively involved with foreign investors and foreign suppliers (60%). These proportions drop significantly when it comes to larger steps abroad – only a quarter of the startups have succeeded in establishing a branch office abroad. While 95% intend to expand their business internationally, only a few achieve this goal in the end due to the complexities involved in going abroad. Younger startups tend to underestimate the challenges.

Spotlight on founders’ demographics
According to the survey results, a typical Swiss startup founder is around 30 years old, highly educated and male – in 2018, only 20% of founders were female, whereas the EU’s average stood at 15%.

The role of investors goes beyond money
Funding is fuel for startup growth and the finding that startups mainly seek money from investors in the initial and follow-on rounds, as illustrated in the survey is not surprising. Next to capital, the study showed that startups seek a high degree of freedom from the investors, that is having little interference from investors in their operational business. Nonetheless, startups value receiving strategic advice, industry-specific knowledge and access to networks. For a successful collaboration between startups and investors, focus, transparency, a proactive approach, and a shared vision are crucial.

For detailed insights, download the “Credit Suisse Startup Study 2023”.

(RAN)