A new association of startups and independents affected by the Covid-19 crisis intends to make its voice heard by the government claiming the right to decent and effective state measures. The measures Luxembourg’s government has taken on March 13 have not included support for SMEs and startups. While the situation has been repaired with several announcements made by authorities.
by: Marc Auxenfants
photo: Oleg Laptev on Unsplash
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A fortnight went by after the initial measures before the Fédération Luxembourgeoise des Startups (FLSU), the association responsible for young companies, stepped up to make its voice to be heard by the authorities.
“The rant that I publicly expressed in the Luxemburger Wort, following the announcement of the first measures, has nevertheless brought some answers”, defends Jérôme Grandidier, founding president of the FLSU and Luxfactory, an innovation and management consultancy for large groups, SMEs and startups.
“If a startup is over-indebted, who will invest in it?”
Franz Fayot, the Minister of the Economy reacted by saying that the measures recommended – credits, VAT deferral, loans – by the ministries can only help large companies. “If a startup is over-indebted, who will invest in it?”.
One of the solutions the president of the FLSU recommends is for the State to take direct or indirect stakes in startups. “We need to create a dedicated fund, I’ve been saying this for three years,” he says.
For some years now, the FLSU and Luxfactory have been promising a similar financing vehicle, with a budget of €150 million. “The project has been put on hold. It was planned for April but the problem is everyone is sitting back,” the president justifies.
Since the recent events, two board members have left FSLU: starting with Tom Baumert, who left due to a conflict of interest. His position as Director of Entrepreneurship at the Luxembourg Chamber of Commerce became incompatible with his mandate as a director of the Federation. Giovanni Patri, the CEO of fintech Phoenici, has also resigned from his position at FLSU. His personal interests faced with the lack of government support for startups and independents, also became incompatible with his mandate as a director.
“It’s a question of regrouping our interests in a real organization, to have legitimacy.”
As early as 13 March, he had contacted the Ministry of Economy, the Chamber of Commerce, the House of Entrepreneurship and Luxinnovation to understand the measures granted to SMEs, including startups. The reply was unanimous: “No aid is planned”.
Faced with what he considers to be a lack of consideration on the part of the state authorities, Patri then decided to push his own luck, via a Facebook page: “Rescue independents & Startups“. Within a few days the site rallied several hundred sympathizers, freelancers, members of professional federations and liberal professions. Three weeks later, there were more than 6,000 members. A figure that moved Franz Fayot.
“It’s a question of regrouping our interests in a real organization, to have legitimacy,” he explains. “Because each entrepreneur is originally an independent, we can set up a group of independents, which will represent all professionals, whether they are taxi drivers, physiotherapists, hairdressers, or independent administrators… The objective is to speak with one voice because we are all asking for the same thing,” he says.
“We will try to obtain short-term measures to overcome this situation, while continuing to explain that there is a lack of funding for the startup ecosystem in Luxembourg.”
For the time being, the AlliancUp association is making four demands: the introduction of a short-time working allowance for the self-employed and startups; the abolition of social security contributions until 15 May, with a possible extension until mid-June; the creation of a support fund (including the State, banks and landlords) for the payment of commercial rents; and the establishment of a financial guarantee by the State for the self-employed “.
The founder of the new movement, however, refuses to take a stand against his former federation, and wishes to act to “meet a need on the part of all the self-employed”. For its part, the FLSU is in the process of reconstituting its board of directors. Already, the name of Michel Hoffmann (Individuum) has been announced.
Once the board of directors is complete, Jérôme Grandidier intends to announce the new board members, and has every intention of lobbying with the government: “We are in an emergency situation, and we will prioritize our actions,” promises the president. “We will try to obtain short-term measures to overcome this situation, while continuing to explain that there is a lack of funding for the startup ecosystem in Luxembourg. We are all going to have to learn to reinvent ourselves.”