Depending on how far it has evolved, a company needs to be in a position to finance its creation or its development. In either of these cases, it is necessary for the company to mobilise financial resources from both inside (equity capital) and outside (external borrowing or public assistance).
Building up equity capital
There are various sources of equity capital available to companies wishing to become set up in the canton:
The venture capital industry is particularly well developed in Switzerland. Some financial companies specialise in investing venture capital. This type of institution invests in capital stock with the hope of making a good profit when the company that is has supported flourishes. It puts its financial resources at the disposal of companies whose area of activity is characterised by major risks for the investor or equally by potential for growth and rapid profits. Most of the time, this involves new technologies or business sectors that are characterised in particular by major potential for growth that would benefit from such investments. Venture capital companies have come together under an umbrella organisation known as the Swiss Private Equity & Corporate Finance Association (SECA).
In many cases, these are business people who have retired from active life, but who continue to be involved in the development of the economy by investing capital, time and experience to assist budding entrepreneurs. Despite their "angelic" name, this is by no means a not-for-profit organisation. Just like venture capitalists, the Business Angels look to earn a return from their efforts, often investing in the same areas of activity as the venture capitalists, even if at an earlier stage in some instances. A good number of private investors are represented in the association Business Angels Switzerland (BAS).
Renaissance PME is a Swiss foundation whose mission is to enable pension funds to invest in unlisted SMEs. From time to time, the foundation sets up funds for pension organisations, enabling them to take stakes, generally in the form of minority interests, in companies selected according to their potential for growth and the novelty of their product or service.
MatchINVEST is an association which, for a modest fee, brings together investors and entrepreneurs looking for finance in the form of a capital contribution.
Obtaining external borrowing
The Swiss banking system makes available to companies finance to complement equity capital. Before granting a loan, banks carefully examine the request and perform a risk analysis.
The three biggest banks in the canton of Vaud provide a full range of financial products and solutions adapted to the needs of companies:
The Cautionnement romand - PME (Loan Guarantees Cooperative - SME) can assist companies operating in the arts and crafts by providing security to help them take out loans. The security, which can total up to CHF 500,000.-, is granted for a maximum period of 15 years.
The Foundation for Technical Innovation (FTI) supports high-tech projects in a critical phase of their development by helping them attain technical and economic maturity (such as realising a first industrial prototype). It provides loans of up to half the total budget, with a maximum amount of SFr100,000.-, for a period of up to three years. It also gives companies the opportunity to receive support from a team of professionals offering recognised skills.
As part of the business promotion programme, the Office for Economic Affairs (SPECo) offers in a complementary and subsidiary way a whole raft of direct financial assistance for SMEs and start-up operating in industry, production-related services and leading edge technologies.
The Swiss Confederation's Commission for Technology and Innovation (CTI) has similarly set up a programm, known as CTI Start-up, offering financial assistance to young technology companies. Essentially this involves providing seed capital for technology enterprises emerging from Swiss technical colleges and universities.
Furthermore, it is important to mention a number of start-up and expansion awards which may provide major financial backing:
Office for Economic Affairs (SPECo)
Rue Caroline 11
CH - 1014 Lausanne
Phone : +41 (0)21 316 58 20
Fax : +41 (0)21 316 61 52
E-mail : info.speco(at)vd.ch