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We know what’s keeping European tech startups from scaling and finding investments

Written by Fahima Begum on Wednesday, 19 June 2019. Posted in Tech City, Technology

What’s the biggest obstacle startups will have to tackle to succeed? New research from Early Metrics reveals the answer

We know what’s keeping European tech startups from scaling and finding investments

From mistakes when seeking funding to issues of workplace candidates ghosting you, entrepreneurs always face risks and obstructions to their startups’ growth. However, some hurdles are more important to overcome than others. Now, Early Metrics, a tech startup rating agency, has revealed the biggest issues keeping European startups from scaling. 

Having analysed 1,774 European early stage businesses over the past two years, the researchers found that many entrepreneurs fail to protect their intellectual property. Early Metrics stated this inability to protect their market shares from other competitors was the biggest red flag for these startups. More than one in ten scored zero in this category and only seven companies in total managed to achieve top marks in this category.

However, protecting what’s theirs isn’t the only problem. The rating process revealed 30% of European tech startup founders failed to invest enough time to their business. Moreover, 22% were too slow to grow and just 17% received high scores in this area. Furthermore, 38% of entrepreneurs weren’t connected with the right people. While networks can have a huge positive impact on a business, a mere 16% were achieving top marks in this sector. 

But it’s not all doom and gloom for businesses as 73% of European entrepreneurs excelled in their ability to convince people – customers and investors alike – that their business idea is one worth pursuing and that people should join them for the ride. Only 14 businesses in the entire 1,774 group scored one out of five. Moreover, Early Metrics revealed, on average, European tech startups score 68 out of 100 with only 16% getting less than 60. And with over 25% scoring more than 73 out of 100 overall means one in four SMEs have growth prospects. 

Commenting on the new research, Antoine Baschiera, CEO and co-founder of Early Metrics said: “There are always teething problems for every new business – the important thing is to learn quickly and keep moving forwards. Moving quickly is key and it’s one of the things every investor wants to see in a potential investment opportunity.”

It seems progression in the tech startup world is harder than ever before. But if you fail to protect your intellectual property, then every success you have is at risk. So it’s worrisome that many European entrepreneurs fail in this regard. 

About the Author

Fahima Begum

Fahima Begum

As a current English student at Queen Mary University of London, Fahima has joined the Elite team as an editorial intern to enhance her skills in journalism. Alongside writing, she loves to read and her favourite author is Khaled Hosseini 

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