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It has been welcomed with open arms in the light of the preliminary figures. Fond-ICO is the first Spanish public private equity fund, which is endowed with 1.2 billion euros and continues to grow. The first call for tender has started and amounts will be progressively disbursed during the next four years. There is reluctance and excitement in equal measure in the sector, so we consider what lessons we should learn from experiences in places such as Israel or Ireland.
Let's look into the background. It has now been six months since the Official Credit Institute (ICO) jumped into the fray to make an announcement that was received as a godsend among startups and mutual funds in innovative companies: launching a fund endowed with 1.2 billion euros, with which to provide muscle to private funds to mobilize financial resources for more than 3 billion euros (among the public and private sector).
Barrage of requests
Last October the first call to tender to select six funds (three "venture capital" companies or fund managers and another three "capital expansion" fund managers or firms) took place. The result was a flurry of proposals from entities to reach a total of 23 applications, among those which have a European presence or from countries such as Israel.
At this first stage, to be followed by a second call for tender on February 21, 200 million euros of public money is expected to be released to inject capital into these six private firms. The selection is expected to be completed by the end of next December.
How did they do it in Israel?
These are therefore the first steps of an experience that will undoubtedly mobilize large amounts of capital to support innovation-based entrepreneurial initiatives. But to have a little more perspective, it never hurts to look at the experiences of other countries that drove an entrepreneurial ecosystem of startups with support from the public sector.
Some ideas about the Israeli case, which was also mirrored by Ireland to enhance its ecosystem of startups:
The beginning was marked in 1991 with a technology incubator program.
The turning point came in 1993 with the Yozma private capital fund, which had a budget of 100 million dollars.
Along with public support, the other key was also the global mindset of their companies. The Jewish "diaspora", through which Israeli companies have always been very present in their strategies regarding the United States.
Today, Israel has the highest gross expenditure in research and development and more Venture Capital in relation to GDP than any other country. It comes close to 5% of its annual wealth.
It has seven universities specializing in research and is home to 60 technology multinationals.
There are 24 incubators promoted by the Government, in which startups can request up to five investments.
Fond-ICO is a very important step forward, in which the public invests heavily in the allocation of capital to strengthen the entrepreneurial ecosystem. Considering the path that countries like Israel have had to travel, there is still a lot to be done. But at least these first steps are in the right direction.
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