Malta should encourage the creation of a local crowdfunding platform to help start-ups gain access to finance outside traditional channels, according to MEP Miriam Dalli.
The proposal is one of an extensive series of recommendations released yesterday on boosting youth entrepreneurship in Malta and the European Union.
Speaking yesterday, Dr Dalli said the government should also facilitate the involvement of Maltese entrepreneurs on existing platforms like Kickstarter and Indiegogo.
“Access to finance is a key issue, especially as bank lending is becoming more difficult for new businesses, so it’s important to promote alternative methods,” she said.
Crowdfunding, which involves raising funds through small contributions from a large group of people, usually in exchange for a reward, has shot up in popularity in recent years.
Access to finance is a key issue, especially as bank lending is becoming more difficult for new businesses
Dr Dalli said the proposed local platform could be opened to an international market to increase the funding possibilities, and should be regulated to protect investors’ interests.
The new report is the result of a consultation process involving the Chamber of Commerce and student organisation Aegee-Valletta, and has been presented to European Commissioner Elżbieta Bieńkowska, Education Minister Evarist Bartolo and Economy Minister Chris Cardona.
Among a number of financing initiatives, it proposes incentives for private individuals to act as ‘Business Angels’ for new enterprises, providing mentoring, guidance and angel finance.
It also recommends that the government make seed capital available to new ventures through a national programme of investment, allowing entrepreneurs to buy back their stakes after a fixed number of years, with an additional interest rate, if the business is successful.
The report highlights practical initiatives like ‘start-up accelerators’, which would involve mentoring and a presentation to potential investors.
Speed networking sessions would be another initiative, enabling entrepreneurs to present their proposals to established businesspeople in a few minutes.
Moreover, Dr Dalli said there was a need to drastically change Malta’s entrepreneurial culture to encourage more people to start their own businesses and to ensure that failure and risk-taking were not too harshly penalised.
“We need to reduce the bureaucracy around our bankruptcy laws to ensure that honest entrepreneurs can make a fresh start without unduly harming their creditors’ interests” she said.
She added that entrepreneurial skills should be introduced as a taught subject in primary schools, along with financial education, while the private sector could be involved in providing secondary-level students with hands-on experience in a business venture.
The report also raises the possibility of including the Young Enterprise programme in the National Curriculum.