Cypriot early stage startup scene needs more nurturing 

Cyprus has made significant progress in attracting established tech companies to relocate their headquarters to the island, but there’s a critical aspect that needs improvement – the nurturing of early-stage startups. 

Without building a strong foundation for these startups, the growth we’re seeing in the tech sector could become unsustainable. 

Here’s why it’s important for the Cypriot government and other stakeholders to help early-stage startups thrive and survive in Cyprus.

Why Early-Stage Startups Matter

Imagine you’re an ambitious entrepreneur with a groundbreaking idea. You need a place where you can quickly develop your product, test it, and get it into the market. Cyprus has the potential to be that place, but only if the right support systems are in place. 

Early-stage startups are like seedlings in a garden. If you nurture them, they can grow into successful companies that contribute to the local economy. 

However, if they don’t get the right care early on, they struggle to survive. 

Currently, Cyprus has an attractive ecosystem for larger, established firms, but if we don’t focus on helping startups build their Minimum Viable Products (MVPs), the country will miss out on homegrown success stories, making the current tech boom short-lived.

The Risks of Relying Solely on Big Firms

The ecosystem has done a fantastic job of bringing in big tech players, thanks to initiatives led by different stakeholders in Cyprus and abroad.

These companies often relocate for tax benefits or strategic positioning within the EU, but what happens if the global market shifts, or if their priorities change? 

Cyprus risks becoming just a “temporary base” rather than a hub of innovation. 

To avoid this, we need to cultivate local talent and innovation. 

Startups are the engines of creativity, and they often bring disruptive ideas that can redefine industries. They need the right environment to grow, and if we can’t provide that, Cyprus might lose out on becoming a sustainable centre for innovation and technology.

Overcoming Challenges for Startups

Currently, startups in Cyprus face significant hurdles.

According to a study in Cyprus, one entrepreneur explained, “Startups can’t wait for months to get approval for a governmental grant. They need quick decisions to stay competitive.” 

Delays in accessing funding and support can mean the difference between a startup surviving or shutting down before it even gets a chance to build its MVP.

Startups operate in a much more unpredictable way. Their needs and goals can shift dramatically in just a few months. Forcing them into rigid planning structures doesn’t align with the fast-paced nature of innovation.

Building a Culture of Collaboration

Another challenge is the fragmented nature of the startup ecosystem. Often, the incubators, accelerators and some startup stakeholders of the island, they operate in silos, and there’s limited collaboration. 

This means startups aren’t benefiting from a “give before you get” mentality, where experienced entrepreneurs and investors guide and mentor younger startups. 

Creating a culture of collaboration and mentorship is crucial. For example, many initiatives and programs offer mentoring and resources to startups, helping them transition from ideas to market-ready products. 

However, more of this is needed across Cyprus, especially with a focus on building early-stage startup with a global mindset in targeted industries.

Encouraging Investment in Startups

The good news is that there are already efforts to attract capital for early-stage startups. The Gravity Incubator and VC Fund, KV Fund, the Cyprus Equity Fund (33EastVC), Palta VC, IDEA Innovation Centre, CrowdBase, GEM Capital, Greek, Regional and Global Funds, and the Research and Innovation Foundation via some initiatives, aim to provide seed capital to help startups during their most vulnerable phase.

More access to funding is always needed.

The government and banks could offer even greater incentives for local and international investors to fund early-stage companies. Tax breaks for those investing in innovation, easier access to grants, and the creation of more venture capital funds dedicated to early-stage startups would all help.

The Way Forward

If Cyprus is serious about becoming a long-term player in the global tech scene, the ecosystem must make supporting early-stage startups a priority. 

These companies bring fresh ideas, innovative solutions, and new jobs to the economy. By addressing the bureaucratic challenges, fostering collaboration, and incentivising investment, Cyprus can ensure that its startup ecosystem isn’t just a passing trend but a sustainable engine for future growth.

Startups need an environment where they can take risks, innovate quickly, and fail fast if necessary, only to pivot and try again. 

With the right support, Cyprus can become a place where dreams take root and grow into the next global tech giants.