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| Type | Bachelor's Thesis |
| Scope | Discipline-based scholarship |
| Title | Assessment of the Current Start-up Financing Situation in Switzerland |
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| Language |
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| Institution | University of Zurich |
| Faculty | Faculty of Business, Economics and Informatics |
| Number of Pages | 53 |
| Date | 2016 |
| Zusammenfassung | Problem For every company financing and therefore especially the availability of capital is very important. For a start-up, it is even more essential since often a high amount of capital is needed for growth, particularly at early stages. The reason is grounded in the fact that start-up companies – in comparison to more established companies – are often denied access to classical financing instruments such as bank loans or stock exchange. Therefore, these companies are obliged to find other ways to finance themselves in the start-up phase – for example with specialized agents in different forms such as business angles or venture capital. This thesis provides an analysis and evaluation of the current situation of start-up financing in Switzerland and a comparison of this situation to other countries in order to assess the current financing situation of start-ups in Switzerland. Methodology This thesis is structured into two main parts: theoretical and empirical. The for-mer serves as a basis for the latter and contains primary information retrieved from classical textbooks, current research reports and different journals. By answering the research-question this thesis describes the most important terms and establish a defi-nition for the concrete meaning of a start-up. Furthermore, it presents a general overview of the different financing instruments of start-up companies. The empirical part comprises analyses predominantly based on data from Invest Europe – formerly known as European Venture Capital Association – and is comple-mented by data from various organizations. During this assessment, this thesis first provides a brief overview of the situation, further compares the situation of Switzer-land to Europe and then analyzes different important factors for the financing of start-up (for example the stock market or availability of smart money). After analyzing the current situation in Switzerland, the findings will be summarized and recom-mendations will be derived. These recommendations address the investment com-munity, start-up associations, policy makers and government agencies. These rec-ommendations aim at improving the economic and financial situation for start-ups in Switzerland. Results The assessment of the current situation in Switzerland reveals that the overall in-vestments into venture capital are above the European average. This fact shows that Switzerland is clearly underneath the average regarding the number of financing deals with a worsening trend the more mature the company is. That means that few-er transactions are observed in later than in early stages. Another analysis is made on the average deal size of different countries. In this comparison, Switzerland denotes the overall best placement. The analysis of the strength of the investors network shows, that there seem to be strong networks in Switzerland, which should improve the situation for Swiss start-ups. Furthermore, the investors have the same industry specialization as the inves-tee, which means, that smart money is available in Switzerland. The role of venture debt is included in the analysis equally. Here, the main result presents that no systematical data gathering on venture debt is performed in Switzerland. The lack of a centralized data source for the financing of Swiss start-up is also observed. Stock exchanges can be an additional financing source for start-up companies. However, the Swiss stock exchanges are not completely meeting the needs of Swiss start-ups and therefore, the initial public offering [IPO] possibilities for start-up companies are underdeveloped. In summary, the current financing situation for Swiss start-up companies is above the European average, even though some factors should be improved in order to increase the competitiveness of Switzerland. Evaluation This thesis suggests three main improvements based on the results from the as-sessment. First, the availability of data related to the financing of start-up should be improved by having one centralized organization that collects and provides access on the Swiss financing landscape. Second, the hurdle for Swiss start-up to do an IPO should be decreased, leading to the availability of this financing alternative to new companies. Lastly, in the later stages of venture financing more companies should be founded with growth capital so that more companies can be able to make it through this stage. The results of this thesis only provide a first explorative and non-exhaustive as-sessment. The main limitation is the reduced availability of data on certain topics such as information on Swiss investors fund. Another problem consists of the design of the countries’ data collection as it is heterogeneous. This complicates the general comparison between countries. Nevertheless, this thesis can serve as a starting point to explore the complex and vast landscape of start-up financing in Switzerland. |
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