Joint Letter from Startup Communities on COVID-19

Dear President of the European Commission,

Dear Ms. von der Leyen,

We, the undersigned representatives of startup communities, call on you to give startups a central role in your solutions to the COVID-19 outbreak, to support startups through the difficult economic situation in the short run and to make startups central to your plans for growth in response to the economic downturn. 

The COVID-19 outbreak is an unprecedented crisis, challenging leaders in politics, business and communities, to rally together to ensure the health and wellbeing of citizens. At this time it is crucial to focus all of our efforts on slowing the spread of the COVID-19 outbreak, following the advice of public health professionals, and taking every measure possible to save lives.

As with preceding disasters, this crisis is also an opportunity. In the first instance it is an opportunity for better cooperation and coordination between nations. Beyond that, it is also an opportunity for innovation. When looking for solutions to combat and resolve the COVID-19 outbreak, but also when looking at where growth opportunities are coming from after the economic downturn, startups are the key actors in both equations.

We, the undersigned startup community leaders, therefore encourage you to put startups in the centre of your plans for managing the COVID-19 crisis, and for the economic growth plans that follow. Based on what we have seen in our communities and from governments around the world, we recommend you to take up as much as possible from the following list of measures and best practices:

1. Make startups central to your solutions to the COVID-19 outbreak

• Fast-track public funding to startups that are developing technologies that can support the testing, treating or monitoring of the COVID-19 outbreak. Use existing frameworks like the EIC Accelerator where possible.
• Organise digital hackathons to rally relevant stakeholders and facilitate the collection and development of the best solutions to the outbreak.
• Collect and publish in a machine-readable format open-source data related to the COVID-19 outbreak. Establish a global Health Data Bank where reliable, instant information can be shared.

2.  Support startups through the difficult economic situation in the short-run

• Set up a national taskforce including a startup ambassador to establish continuous dialogue between governments and startups/innovation communities.
• Set up a one-stop shop to inform startups and provide them with access to all available tools to deal with the crisis.
• Take measures to ensure startups do not face a liquidity crunch following the cooling down of the global economy, including the following to ensure cash flow:

1. Postponing monthly social and fiscal tax deadlines
2. Offering delays to repayment of government-based investments

• Inject capital into startup ecosystems through refinancing and liquidity measures:

1. Provide bridge financing for startups that were in the process of securing a new financing round
2. Include venture-backed startups in national liquidity measures.
3. Fast-track VAT and tax returns or introduce new exceptions for startups

• Amend insolvency laws to protect founders from personal liability for salaries and social contributions in the case that the covid-19-induced collapse of demand leads to significantly less revenues.

3. Make startups central to your plans for growth coming out of this economic downturn

• As the economy regains traction, consider how startups can deliver more sustainable or diverse forms of growth, for example putting the economy on a less carbon-intensive footing. Set up public-private cooperation “challenges” to solve key strategic targets.
• Since startups hire on average 3x more employees than other economic sectors, ensure that capital is dedicated to kickstart VCs and other financial players in the ecosystem.

As entrepreneurs and startup community leaders we want to be as helpful as possible when it comes to meeting the unprecedented challenges posed by the COVID-19 outbreak. We encourage you to view startups as part of the solution in this regard. At the same time, we hope that you will ensure that startup communities will not be left alone and run into an avoidable liquidity crisis in the near future. Startups invest their resources into growth, including new markets, headcount and marketing. As such, they inherently have less liquidity than other players in the economy. It is therefore paramount that they receive the support that we listed above in an unbureaucratic format in the near future.

Please count on the backing of startups and startup community leaders in this time of crisis. We are available for any questions you may have.

Kind regards,

Melissa Blaustein, Founder & CEO, Allied for Startups

Nicolas Brien, CEO, France Digitale

Lucien Burm, President, Dutch Startup Association

Gianmarco Carnovale, Chairman, Roma Startup Association (Italy)

Angelo Coletta, President, Italia Startup Association

Dash Dhakshinamoorthy, Founder, StartupMalaysia.org

Evan Engstrom, Executive Director, Engine

Dom Hallas, Executive Director, The Coalition for a Digital Economy (Coadec) (UK)

Sara Härmälä, Director, Upgraded – Health Startup Association of Finland

Vlad – Mihai Icleanu, President of Cluj Startups

Peter Kofler, Chairman, Danish Entrepreneurs

Carlos Mateo, President, Spanish Startups Association

Liz McCarthy, Head of Scale Ireland

Christian Miele, President, Bundesverband Deutsche Startups

Doina Popa, CEO Codette

Markus Raunig, Managing Director, Austrian Startups

Pedro Rocha Vieira, CEO Beta-i (Portugal)

Simon Schaefer, President Startup Portugal, CEO Factory.com

Diego Soro, Chamberi Valley

Ivan Vasilev, BESCO – The Bulgarian Startup Association 

cc:

Charles Michel, President of the European Council

David Sassoli, President of the European Parliament

Christine Lagarde, President of the European Central Bank

Allied for Startups is a worldwide network of over 40 advocacy organisations focused on improving the policy environment for startups. We are working together to create a consensus on policies that can positively impact startups and grow digital entrepreneurship and digital economy at large. Our mission is to ensure that the voices of startups are heard in government.