When you think of Portugal, what things come to your mind? Several things, certainly. Beach, good food, beautiful landscapes, friendly people, fado, football, Cristiano Ronaldo... And we could count many more things. But our country is not just a paradise due to its beauty. It is also a paradise for startups, as it is a country that promotes technological development. The Web Summit also acted as a gimmick and attracted many entrepreneurs looking to expand their enterprises.
The startup ecosystem in Portugal is growing at a rate twice as fast as the European average. In 2018, it already represented 1.1% of the national Gross Domestic Product (GDP). The volume of foreign investment into the country has also contributed greatly to the growth of the Portuguese technological ecosystem. Our entrepreneurial scenario is viewed as a promising destination for startups by founders and stakeholders in Europe because of talent availability, and greater value for money. Other factors also influence, such as the quality of life, the pleasant climate, the privileged position in the geopolitical landscape, the rich culture, among others. But, what about Portuguese investors? What do Portuguese investors look for in a startup? What are the key points that a startup should have?
Foreigners know how to recognize Portuguese talent, but so do Portuguese. According to our Portugal Startup Outlook 2019 report the majority of Portugal’s Venture Capital financing is sourced from foreign investors (66.8%), however domestic investors play a key role at the earlier stages of financing (contributing 70% of seed financing).
Portuguese startups have value and can be successful. The proof of this is the case of two well known unicorns - startups valued at more than one billion dollars - Farfetch and Outsystems. We can take these two examples to describe the most attractive features for investors.
1. The Attitude
Having a clear vision and mission is key. The investor will sense it right away. You need to be “in love” with your solution, and truly believe it will work, even before starting to make sales. If you don’t believe it, most probably no one will. Also, it is key you know how to receive feedback, respond within 24 hours to important emails, even if it is just saying “I’ve seen it, it will take me x time to follow up with the required documents”. You need to protect your startup, as if it is your baby. As Rita, former Portugal Ventures CEO, said in our ScaleUp Portugal Series, good arrogance is important. You need to be humble to accept feedback, but also be confident that your startup will work and is the right investment to be made.