Regulatory “Pain in Spain”

(p. A1) Gerard Vidal formed a data-encryption firm, Enigmedia, when he couldn’t find an employer looking for a Ph.D. in physics. But even a physicist was perplexed by the paperwork involved in starting a company in Spain, and the launch was delayed months by a process he calls “illogical, inefficient and totally frustrating.”
For many in the eurozone, where government budget cuts and corporate layoffs have left more than 18 million people out of work, the only way to find work is to create their own jobs. But these inexperienced entrepreneurs are flying into harsh headwinds.
Scarce capital, dense bureaucracy, a culture deeply averse to risk and a cratered consumer market all suppress startups in Europe.
. . .
(p. A12) In 2013, the OECD ranked Spain second worst in a survey on barriers to entrepreneurship in 29 nations. Spanish entrepreneurs have found that one of their big business challenges is simply getting incorporated. In the six months that Diana and Arantxa Fernández needed to obtain the multitude of permits required to open up a nursery school last year, the sisters burned through most of the capital they had husbanded from taking lump-sum unemployment. Now they are on the financial ropes.
. . .
When David Fito tried to open a gluten-free bakery after getting laid off by a bank a few years ago, he said 30 banks refused to lend him the €100,000 he needed. He got the credit only after his parents pledged their apartment as collateral and seven other wage earners agreed to co-sign. He said his business is now growing.
. . .
In Spain, young people with an entrepreneurial DNA long felt like fish out of water. María Alegre started selling homemade jewelry in Barcelona at age 13 and still remembers her profit–13,000 pesetas, worth about $90 at the time. But she said she never heard the word “entrepreneurship” until her fifth year at a Spanish business school and didn’t get encouragement until she was studying at the University of Michigan. Today, the 29-year old Ms. Alegre is CEO and co-founder of Chartboost Inc., a 130-employee San Francisco company that helps mobile-game developers find new users and monetize games. Ms. Alegre bemoans what she calls a Spanish “culture of being against risk and not dreaming big enough.”

For the full story, see:

Matt Moffett. “New Entrepreneurs Find Pain in Spain.” The Wall Street Journal (Fri., Nov. 28, 2014): A1 & A12.

(Note: ellipses added.)
(Note: the online version of the story has the date Nov. 27, 2014.”)

Leave a Reply

Your email address will not be published.