Young Bulgarian entrepreneurs unwaveringly venturing in their country

Young Bulgarian entrepreneurs unwaveringly venturing in their country

Many young Bulgarians are choosing to leave their homeland and pursue professional experience abroad. The reasons include mistrust in the Bulgarian political system, better salaries in developed countries, higher living standards and a broader range of opportunities.

Nevertheless, many — especially young people — choose to stay in the country and start their own businesses. The Bulgarian entrepreneurial climate allows for that.

 

Venture capital

The membership in the European Union has affected Bulgaria’s entrepreneurial environment in a positive way. Startups have now access to venture capital thanks to funds such as eleven (12 million euros) and LAUNCHub (9 million euros), which manage EU money.

Once their startups are backed, entrepreneurs get access to mentors and experts who help them in the very first stage. After they are proved to be successful, startups become eligible to be backed up to the seed stage, which is where venture funds connect them with other independent co-investors.

 

Government initiatives

This year, the Sofia Tech Park was launched, and it is already home to more than 20 high-tech startups. It is the first Bulgarian sci-tech park completely owned by the Bulgarian government and aiming to become a platform for knowledge and ideas exchange in business, science and society.

Another important step the government took in 2007 was decreasing the corporate tax to 10 percent, which placed Bulgaria among the EU members with the lowest tax rates.

 

Co-working spaces in Sofia are becoming increasingly popular. Credit: Beta Haus

Co-working spaces in Sofia are becoming increasingly popular. Credit: Beta Haus

Startup venues, people and events

betahaus | sofia is one of the several co-working spaces that provide not only cosy and inspirational work environment but also networking opportunities for like-minded entrepreneurs.

On top of that, organizations such as the Association of Bulgarian Leaders and Entrepreneurs and Start It Smart bring together ambitious students and offer them entrepreneurial summer courses, mentoring and startup competitions like Get In The Ring.

 

A Bulgarian startup

Volen Vulkov, 24, is a co-founder at Enhancv. His startup works on changing how people represent themselves through their ‎résumé and/or CV.

When asked why he decided to start his company in Bulgaria even though he was an exchange student in Germany, Vulkov said it was up to young people to make Bulgaria a better place and not wait for some politicians to fix the problems. He also said he found the entrepreneurial climate to be attractive for young entrepreneurs.

“Building a company means building a community,” Vulkov said. “In Bulgaria, especially in Sofia, the entrepreneurship system is like a close-knit family.”

There are a few non-governmental organizations (Start It Smart, ABLE and Start-up) that help more and more “junior entrepreneurs” to rise each year. Then, there are several accelerators and a slowly but surely growing angel investment community.

“Another positive factor is the huge IT talent in the country, empowered by local branches of big players like SAP, VMware and Microsoft,” Vulkov said. “Last but not least, Bulgarian IT company Telerik successfully launching in Silicon Valley inspires young entrepreneurs and serves as a good role model.”

Volen also jokes that the living standard in Bulgaria is the single most important factor that must grab the attention of every founder, as when starting the company, entrepreneurs need to save every penny, and Sofia, with its low prices, is the best place for that. Bulgaria has the lowest per-capita GDP, at 54 percent below EU average, and is, thus, a low-cost outsourcing destination.

 

Italian entrepreneur in Sofia

Italian entrepreneur Luca De Giglio is the founder of Adormo, a company that helps apartment owners to improve their online presence and attract more customers via websites like Airbnb and Booking.com.

De Giglio has traveled the world and worked with many people from diverse cultures and backgrounds.

Recently in Bulgaria, the eleven accelerator venture fund has backed De Giglio's company and thus allowed him to open a second Adormo office in the capital, Sofia, his first being in London.

When asked in an interview with Global Young Voices to define some of the positive and negative aspects of the Bulgarian startup environment, he explained that the most important part of launching a company is to be able to concentrate on the business aspect of operations in the first place, leaving bureaucracy, tax policies and paperwork in second place.

“This is even more important than paying high or low taxes,” De Giglio said, “because it is a lot of saved time.”

So far, he says, it has been pretty smooth, and they are able, on the one hand, to delegate a lot and concentrate on the business. On the other hand, the biggest negative surprise he found was the long and complicated process of converting a convertible note in shares. Luca recommends that shortening the time of several months might not be a bad idea and could help the Bulgarian startup ecosystem.

When asked if corruption issues affected Adormo’s competitiveness, Luca answered the only time he faced corruption in Bulgaria was when he tried to bribe a waiter himself: “I tried to bribe a Ciccione (Italian for chubby) waiter so he wouldn’t cook prosciutto crudo, a notoriously delicious raw Italian ham, which is not supposed to be cooked, but he had stronger ethics than respect for the prosciutto.” However, he is afraid that once his company becomes big enough, it might experience the thrill of corruption.
 


Being the EU member state with the highest rate of corruption, according to a 2015 report by Transparency International, Bulgaria has done almost nothing to fight corruption since it joined the EU in 2007.

However, this must be the top priority of the government if it wants to maintain a healthy entrepreneurial climate. Otherwise, no matter how low tax rates are or how cheap Bulgarian labor cost is, in the long run, corruption would lead to an ill-designed startup ecosystem.

Hence, the country risks to lose its attractiveness even for the highly motivated and proactive youth who decide to stay in order to be the change they want to see in Bulgaria.

Author's note: I wholeheartedly thank Ikonom Filipov for the provided help and information. Filipov is genuinely interested in technology and entrepreneurship. He currently serves on the advisory board of the Association of Bulgarian Leaders and Entrepreneurs and is the business development executive at Tech Tour.

Cover credit: Freepik

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