Business start up in Slovakia
Of course, Bratislava–which has a population of just 413,000–is a tiny market, so startups tend to be internationally focused from the beginning. It helps that Slovakia is uniquely positioned at the heart of Central Europe: It borders the Czech Republic, Austria, Hungary, Ukraine, and Poland. While the official language of Slovakia is Slovak, small businesses increasingly conduct their operations in English, notes Luptak.
There are also a number of resources available to entrepreneurs in the capital, including the accelerators Clusterhaus, Connect, and Impact Hub. Six years ago, Luptak helped launch Startup Awards, a startup competition that invites early-stage companies to compete for the chance to win $50,000 in cash and prizes. Last year, the Bratislava conference drew serial entrepreneurs including Uri Levine, the co-founder of travel-navigation app Waze, which sold to Alphabet for more than $1 billion back in 2013. Meanwhile, the government-sponsored Slovak Business Agency aims to provide funding, consulting, business loans, and other resources to local startups.
Slovakia is home to a trove of tech talent, stemming from local engineering schools including the Slovak University of Technology in Bratislava–which currently counts more than 15,000 students and 147,000 graduates–as well as the nearby Technical School of Kosice, in the country’s second-largest city. Still, young startups have to compete for that talent with major tech companies including AT&T, Lenovo, and Dell, which all have offices in Bratislava.
“When you’re building a global company from Bratislava, there’s a lot of technical talent, but there are also a lot of big wealthy companies that are able to pay them,” says Luptak.
Startups may also struggle to offer competitive benefits to their employees. While it’s easier to start a business in Slovakia than it was 10 years ago, entrepreneurs still have to navigate plenty of red tape. For example, it’s especially difficult set up a stock options program here. (At Jump Soft, the Bratislava software startup, there is no direct model for employees to have a stake in the company, though it manages to provide workers a share of the total profits over time.) Young hires could easily be enticed by a stake in a startup–but without that stake, they’re more likely to turn to established companies.
Venture capital investment in Slovak startups has risen over the past several years, with the creation of funds including Neulogy Ventures, Braun Holding, and Limerock. According to the 2016 KPMG Startup Ecosystem Survey, 77 percent of investors in Slovakia had increased their number of investments from the previous year. However, these are largely early-stage or seed funding rounds, as the majority of Slovak startups are still in their infancy: Fewer than half (46 percent) have raised external funding, the KPMG data found.
“Young companies have quite good access to angel and seed money in Slovakia,” says Michal Koor, the CEO and co-founder of Vectary, a 3-D modeling business that launched in Bratislava in 2014. Still, he says, “for later stages, companies should consider where their market is and look for smart money there.” (Vectary is in the process of moving its headquarters to New York City, after raising $2.5 million from BlueYard Capital, which is based in Berlin, and from Luptak’s Neulogy Ventures.)
The proliferation of small businesses in Bratislava can also be attributed to more recent startup successes, including ESET, an IT security company that launched in 1992, and now counts more than 100 million users across 202 countries. As more would-be entrepreneurs see these companies emerge successful, says Jump Soft’s Klimes, more startups will become inspired to think globally.
“Once they hear more and more stories about successful businesses,” he adds, “they’ll slowly get on the train, and become [less] shy to approach the international market.”
Why Legal Baltic?
You can benefit from the support of Legal Baltic from the first point to the point of success and achieve your target market. The range of services offered by us, start from establishing a small café in Bratislava or different cities, up to the establishing a large industrial factory in the free economic zones of Slovakia.