Once a year, innovative Swiss start-ups are invited to the US to learn how to attract investors, grow as a company and handle legal issues. Part of the process involves shedding some of their more “modest” Swiss traits.
It’s a summer evening in New York. Twenty young entrepreneurs, all male bar one, are presenting their companies to four venture capital investors. The aim is to be as brief and concise as possible to arouse the interest of potential investors or so-called business angels. An eclectic crowd fills the hall.
Start-ups in the fields of biotechnology and medical technology, engineering, IT and environmental technology are represented in the group. The start-up training camp has been organised by swissnex - the science and innovation network - in collaboration with venturelab, which was launched in 2004 as a national training programme for innovative high-tech start-ups. More than 100 start-ups apply each year to participate in the programme.
The US entrepreneurial bug
It is normally held in Boston but this year expanded to include New York. While the Boston region is mainly of interest to life science companies, the financial capital of New York has developed in recent years as a high-tech scene and has become a magnet for start-ups from industries such as media, fashion, design or advertising, where there’s plenty of venture capital to be found.
swissnex is a platform set up by the government for the exchange of knowledge and ideas in science, education, art, and innovation.
In their host countries, the swissnex houses have the mandate to develop contacts with universities, research institutes and companies and to make this available to interested Swiss institutions and individuals.
The first swissnex office opened in October 2000 in Boston followed by San Francisco in November 2003. Since the summer of 2013, swissnex Boston has had an outpost in New York, which focuses on the promotion of start-ups.
Since 2004 there has also been a swissnex Singapore office, and a swissnex house opened in Shanghai in 2008 with another in Bangalore, India, in 2011.
The most recent addition was swissnex Brazil which began operations in April 2014 in Rio de Janeiro with an outpost in Sao Paulo.
The Swiss start-ups are hoping to become global players. Their visit to the US is a chance to gain experience and make the contacts which are important for young high-tech entrepreneurs wanting to break into the US market.
“You notice sometimes that Swiss companies are very modest. They are then immersed in the business world in Boston and, now, New York, and you see the floodgates open and how they are bitten by the entrepreneurial virus,” says Felix Moesner, director of swissnex Boston.
“They are motivated and perhaps return to Switzerland a bit more open to risk than is normal there. I believe that they can learn something important and energising here,” says Moesner.
Jason Klein, one of the investors present, told swissinfo.ch it was difficult to evaluate an idea in just a few minutes and that it took more time to assess whether the technology was really viable or unique.
“But at this point, from a first look, there are certainly companies here that I would say are focusing on what seem to be innovative and big ideas with a potential for the break-out thing. No doubt about that.”
“Naturally it would be hard to say I would invest in them after just a few minutes – that kind of thing only happens on TV.”
One goal of these boot camps is to learn how to pitch a business to potential investors in the US, like Klein. At the end of the event, Vincent Forster, founder and CEO of Versantis, emerges the winner as determined by Twitter and Facebook entries. He wants to develop a cure for patients with metabolic poisoning or poisoning from drugs.
That’s a project that could attract a lot of interest in the US, because the problem of overdosing with painkillers, particularly with opioid analgesics, has reached growth rates of epidemic proportions according to the US Food and Drug Administration.
Forster said it was a chance to meet “really important venture capitalists”, people from industry and business angels.
In addition to finding sponsors it was important for Forster to have contact with the medical community, because the clinical tests will be carried out not only in Switzerland but also in Europe and in the US.
Forster says the experience taught him how to pitch to investors. "You can see a clear difference between the first and the last day. We all made progress with our presentations."
For Keith Gunura, the pitching was also invaluable. "It's a very different culture than in Switzerland, or in Europe overall, where we are much more conservative. In Switzerland, it is not normal to boast about an idea and say, we will be the world's best."
“The investors here told us we would have to work on our sales arguments, ‘we want you to present your dreams, to make us enthusiastic about your ideas, create the wow factor’,” says Gunura.
Investors in start-ups here are not primarily focusing on the numbers. “Maybe we could use this approach more in Switzerland, maybe there would be more enthusiasm there too if they like you as a person and appreciate your enthusiasm. You can always talk about numbers later.”
Gunura’s main goal was to understand how to enter the American market, as some of the regulations on specific devices differ from the market in Europe. His company Noonee has developed a stool which is intended for people who have to stand for hours at work, for example in a factory on an assembly line.
In addition, he had hoped to meet people that could open doors with manufacturing or distribution or resale.
“And actually, that ended up happening. I met a really nice guy, from a company that is interested in our device.” In turn, that has led to other contacts and meetings, which is precisely what he hoped.
venturelab was launched in 2004 as a national training programme for innovative high-tech start-ups. On behalf of the Commission for Technology and Innovation CTI (the government’s innovation promotion agency), the IFJ Institute for Young Entrepreneurs has held more than 3,100 venturelab course modules with more than 27,000 participants around the country. Since it was launched, participants have attracted CHF525 million in funding and created more than 3,500 jobs. In 2013, 50 alumni ranked among the Top 100 Swiss Start-ups, including nine of the top ten. venture leaders is financed through a public-private partnership.
By Rita Emch in New York, swissinfo.ch