Continuing To Disclose The Topic EU Funding For Startups ¦ Startup Definition – Financial Services

by Griffiths + Associates Ltd

31st October 2023

It is customary for an aspiring entrepreneur in Malta to
think about external finance, particularly EU funding. Griffiths +
Associates as a corporate service provider receives significant
client requests relating to this matter. This was one of the
reasons why we decided to present a series of clarifying articles
devoted to startups and EU requirements.

A very common misunderstanding is to identify any new registered
firm as a startup.

So, let’s run through the startup definition, within the
context of EU funding.

The European Commission, which is the executive branch of the
European Union, has defined a “startup” as part of its
broader efforts to support entrepreneurship and innovation.
According to the European Commission’s definition, a startup is
typically characterized by the following key elements:

1. Age of the Company: Startups are usually young companies,
   typically in their first five years of existence. They are often in
   the early stages of their development.




2. Financial Independence: Startups should be financially
   independent, which means they are not subsidiaries of larger
   corporations or part of established business groups.




3. Limited Revenue: Many EU funding programs for startups have
   restrictions on annual revenue. Startups are typically expected to
   have limited revenue, often below a certain threshold, as they are
   in their early stages.




4. Innovative Nature: Startups are expected to focus on innovative
   products, services, or business models. They are often involved in
   activities related to technology, digital innovation, and
   disruptive solutions.




5. Technology and Knowledge-Based: Some EU funding programs
   specifically target technology-driven startups or those based on
   knowledge-intensive sectors, such as information technology,
   biotechnology, or clean energy.




6. High Growth Potential: Startups should demonstrate a high
   growth potential, indicating their ability to scale their
   operations, expand into new markets, and create jobs.

So, in short, “Startup” can be defined as a newly
established independent company or business venture that is
typically characterized by its youth, innovation, high growth
potential, a small entrepreneurial team, and a focus on disruptive
or technology-driven solutions.

Hence it is relevant to look at this definition but at the same
time there might be other possibilities for assistance if your
business does not meet the above characteristics and the new
registered firm cannot be identified as a startup. An enterprise
just the same time the firm may fall into the category of
“small & medium-sized businesses” (SMEs). Hence, you
may still consider alternative government financial support. In the
following publications, we will delve in more detail on
schemes.

Visit our website griffithsassoc.com and find more
information:

Horizon Programs For The Startups In Malta

Setting up a company in Malta

Taxes in Malta

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.