startups and smes financing methods



The most critical factor for a business is to choose the most suitable source of funding. Currently the available sources of funding are:

Angel Investors

Many start-ups use personal funds to prove to potential investors that they can get their first customers. Following this path makes it easier to reach out to angel investors who will finance your business. Business angels are, in essence, individual investors, providing funds to start a business, usually in exchange for convertible debt or a shareholding in the start-up.

Recently, the Athens Chamber of Commerce and Industry (D.EA./E.BE.A.) established the Business Angels Network, while at European level there is the European Business Angels Network (EBAN)  European Business Angels Network

 Seed Capital

Seed Capital, or Sowing Capital, is small financing for starting a business. The main features of these actions are that the capital is rather small (15 to 50 thousand Euros), prepaid, and intended to cover the operating costs of the first year of operation of the company, so that there is time for business development of the idea. Indicatively, there are actions of both the State (O.A.E.D.   N.E.E. Program) and the private sector (TheOpenFund), for various sectors of the economy (traditional products, information technology, etc.).


Banks are the traditional source of funding for existing businesses. When banks lend to new businesses, borrowers are required to provide substantial guarantees. Also, banks can limit financing, within certain limits (e.g. loan for working capital up to… .. thousand euros). Banks will also need to understand the job, and usually ask to see the business plan.

As an application for bank financing will be examined by several inspection teams, each of which will examine different issues, it is very important that the business plan be as complete as possible, in order to avoid any delays. Also, the banks today are in a very difficult situation. As they have many loans that are not repaid, this makes them very careful to give out a loan. From now on, the banks will focus more and more on the quality of their portfolio, with their main concern being the repayment of the loan. Generally speaking, the banker is like a partner. You need to make him believe in you and your product.

You have to inspire him. We need to keep them informed about our developments and decisions, and warn them in a timely manner if we need support.

Venture capital

Venture Capital (VC) investors are only interested in business ideas with high growth prospects and with an experienced and ambitious team capable of turning their business proposition into a profitable company.

VC is a medium-term financing in exchange for a percentage of participation in the capital of the company. The size of the participation is related to the expected risk and profits of the business. The cooperation of Venture Capital companies is not limited to the provision of funds but also provides assistance in terms of management, marketing, staffing and strategic planning of the company.

Also important for the funded company are the relations of the Venture Capital company with other companies in the market that can serve in contracting partnerships. The great advantage of financing through Venture Capital is that the company is not obliged to provide guarantees for the capital provided to it. Thus, even in case of business failure, Venture Capital does not claim a refund of the money invested in the company, provided of course that the terms of the agreement between the two parties were met. Information on the Association of Greek Venture Capital Companies


ESPA is the Greek program that directs the funds of the European Union intended for the smoothing of inequalities between the regions of the EU to Greece. Within the framework of ESPA, the respective government distributes funding targeted at different sectors at a time, which are announced through pre-publications and the final announcement.

The submissions are carried out in time-limited periods, announced in advance by the respective Ministries. The evaluation of the proposals is done en masse, the results are published and then a deadline of one to three years is given for their implementation. Funding concerns a percentage of the investment or tax exemptions. It is a very attractive choice to be combined with one or more of the other ways of financing (bank, venture capital, etc.).

European Union

If you run a small and medium-sized enterprise (SME), you can receive EU funding in the form of grants, loans and, in some cases, guarantees. The aid is available either directly (EU grants) or through nationally managed programs.


Crowdfunding is an internationally popular method that has raised more than $ 10 billion since 2010. Today, there are 786 crowdfunding platforms operating internationally, 200 of which are in Europe, with Britain leading the way. Usually, each idea presentation campaign lasts a certain amount of time, while the platform keeps a percentage of the funds that it will raise on behalf of the company as a commission.

Indicatively, some crowdfunding sites in Greece are mentioned: 

Business Incubators

These companies provide start-up and fast-growing companies with financing (to a lesser extent than Venture Capital companies), premises and equipment (buildings, furniture, computers, etc.), secretarial services, consulting services, contact network with customers and suppliers etc.

More specifically, the support offered by “Entrepreneurial Incubators” consists of the following:

(a) granting scholarships lasting a few months, so that young people who wish to “venture” can focus on their business plans.

(b) enabling them to work in specialized Cooperation Areas (according to the model of internationally called co-working spaces) according to the most modern international standards. The main purpose is for the Cooperation Spaces to function as incubators for the new potential entrepreneurs as favorable conditions are created in these spaces for the development of collaborations and the elaboration of ideas and plans.

(c) providing opportunities to reach out to mentors and to organize informative seminars and workshops, with the assistance of a network of mentoring counselors, who will support the program by providing counseling services, guiding and educating young people and possibly supporting with potential investors.

In return the Incubator companies receive a percentage of the equity or payments from the start-up company or a mixed settlement is made.

The role of Incubators companies is to contribute to the establishment and the first development of a new company so that it can then claim, with proper infrastructure and professional preparation, larger funds (through bank lending or Venture Capital companies) for its first large investment, which will allow it to grow further and impose itself on the market. The duration of the Incubator investment is usually between 6 and 18 months.

Indicatively, the following Entrepreneurship Incubators are mentioned:

  • General Secretariat for Youth
  • Incubator for Start-ups of EVEA
  • Hellenic Association of Start-ups
  • Business Incubators for the Municipality of Athens
  • Athens Impact Hub Promoting Social Entrepreneurship
  • AHEAD Alba Hub for Enterprise and Development
  • Orange Grove
  • Thermi SA
  • Egg Program (Enter-Grow-Go) of Eurobank
  • Aephoria Program
  • IQbility Incubator
  • Startup Series Metavallon
  • Cosmote start up
  • Incubation for Growth-i4G
  • Industry DIsruptions GAme Changes ID-GC
  • ekinisiLAB of BSE

Technology Parks

 It is a coexistence in the same space, of companies operating in a specific field and corresponding university departments in that field. In essence it is an area where companies with intensive research and development activities in the new sectors of the economy based on knowledge (information technology – telematics – biotechnology – renewable energy sources, etc.), come together with universities, research or technology centers. In this way, infrastructure for attracting and establishing businesses in an attractive technological environment is created, while at the same time technology transfer and business support services are offered. 

In our country there are several Technology Parks, such as:

Technological & Scientific Park of Attica (TEPA) “LEFKIPPOS” NCSR Demokritos 

Epirus Science & Technology Park (ETEPI) 

Institute of Research and Technology of Thessaly (IETETH) 

Thessaloniki Technology Park (TPΘ) 

Crete Science & Technology Park (ETEP-K) 

Lavrio Technological & Cultural Park (TPPL) 

Patras Science Park SA (EPP) 


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