The Challenge of Polish Public Money by Szymon Janiak


The post was originally published in Polish on Szymon’s LinkedIn profile. Szymon kindly agreed to republish what we think is of great value to our readers.

Polish public money is currently experiencing a crisis of confidence among startups. This is an open secret of domestic venture capital or, if you prefer, an elephant in a room that we try our best not to see. This is the first time I am seeing founders abandon potential or even negotiated deals. They walk away from the table, afraid that either there will be no money at all or the repercussions of taking it will be greater than the profit from having it. This is new for this market.

Over the last 5 years, public-private capital has changed the landscape of tech financing in Poland in an unimaginable way. It has developed great VC fund management teams, gave the first signs to investors that this is a valuable asset class – not much fun, but above all, it has helped develop a number of amazing companies. On the finishing linet, however, the confluence of events in various entities led to the rise of fundamental doubts. As it is typical of such situations, the market began to panic.

This statement will sound quite perverse, but if it was to happen, it’s good that it happened now. Why? Because we are in a period of transition. We are at the turn of two so-called financial perspectives, i.e. large programs, where a large part of the funds has already been allocated and the funds are going into periods of divestment, so the situation doesn’t hit them so hard, and the second perspective has not yet begun in earnest. After many announcements, mow there are no new competitions that could further support the development of Polish venture capital. In real terms, this capital will probably appear on the market no sooner than next year, on terms ultimately unknown to anyone today.

However, this should be a moment for deeper reflection and self-criticism. A moment to thoroughly analyze data from thousands of investments made, look for correlations, weak points, and create such mechanisms that will support the Polish tech scene even better and unveil even greater potential than what is happening on the shores of Vistula today.

Significant public funds should again be invested in domestic venture capital, and later – as was the case in Israel – their share decreases in favor of private contributions. The latter should come to dominate over time. The Polish market is still looking forward to it.

Mistakes have been made on the current path – it’s natural. Now it is worth using the moment to draw conclusions and improve what we need. For me, personal participation as an investor in the revolution that has happened over the last 5 years has been a great pleasure, I am looking forward to the good that’s yet to come. At the same time, I believe that we should take an active part in shaping this market to a greater extent – at the end of the day, we are all its creators – regardless of whether we are on the side of a start-up, a fund, an institution or an investor. It’s a shared stage.

The issue is extremely topical in Poland, and the comment section raises follow-up questions that are yet to be answered:

Is there summary with the results of the companies that received the first tranche of investment? As one of millions of mute investors, I would like to see what effect our money has had.

Krzysztof Bialkowski, Director Regional Marketing Central & Eastern Europe at Zalando

And what are the reasons for this ‘crisis of confidence’? What are founders afraid of?

Konrad Biniewicz, Investment Director at ORLEN VC

Is it known whether, who, and how – maybe through consultation – is looking for the mentioned correlations and weak points and working on improving mechanisms?

Wojciech Gołębiowski, R&D Manager & CTO at SKA Polska


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