Prague’s Way To Start A Business

Prague was listed as the best city in central and eastern Europe for nomad workers by Nomad List. For many reasons: my friend Eli David is a true digital nomad. He is behind StartupBlink that wants to become a one stop shop for startups, according to Forbes. He knows Prague very well:

“Prague is great for entrepreneurship because the costs of living are relatively cheap, which makes it easier to bootstrap a business. There is also a great quality of people to hire at  relatively low cost. Also, the vibrant expat community is adding a lot of quality and experience to the local startup scene”.

Prague is located in the geographical heart of Europe and offers some advantages over most other European countries that are relevant to any business start-up – a solid infrastructure, a highly educated and skilled workforce, lower wage costs. Prague is not only known for its history and beauty, but it is also the home to security giants AVG, AVAST, gaming studios such as Warhorse Studios, Anamita Design or Bohemia Interactive, SaaS companies such as GoodData or ZOOM International, social media company Socialbakers,  API magicians Apiary, mobile app studios such as STRV,  Cleevio and many others. Companies founded by expats such as 360Cities or Cashplay have also been doing well here. The Prague ecosystem offers a rapidly expanding know-how, experience, opportunities and access to networks to all entrepreneurs set on conquering the global technology stage. And if a startup needs to venture to a more established location, Berlin is only a 4-hour drive and London a 2-hour flight away.

Golden Prague

The Advantages Of Prague For Founding A Startup:

• Compared to cities in the West but also in the East, Prague is relatively cheap. Nomad List quotes around 1000 USD per month for living expenses. An espresso costs around 2 USD, a beer 1.5 USD, a monthly public transport ticket just above 20 USD.
• Welcoming startup community – Czech startupers are easygoing, speak very good English and are keen to help. On top of that, there is a lively and ever-growing expat community ready to share useful information and insight.
• Prague has been a very popular destination for expats since the early nineties, resulting in abundant services catering to the needs of foreigners living in the city.
• English is widely spoken throughout the business world in Prague.
• There’s a rich cafe culture in in the greater centre of Prague. Most, if not all, cafes have quick WIFI and English speaking staff.
• The Czech Republic has a flat corporate tax of 19%, and a flat personal income tax of 15%.  Setting up a Czech limited liability company (s.r.o. in Czech) does not require you to have residency in or be a citizen of the Czech Republic but you will need a registered office. This requires a rental agreement or consent from the property owner. There are a number of companies that can provide a virtual office.
• Prague has one of the best public transportation systems in Europe. The metro, trams and buses cover the majority of the city and outskirts.
• Prague is beautiful, culturally rich and safe.

Few Things To Take Into Account Before Founding In Prague:

• Competition for the best IT talent is high in Prague, which creates shortage in the market and drives up salaries. Brno, the second largest city in the Czech Republic and a base of many technology universities and companies might be a better choice for setting up a tech company though it does not offer the same advantages of an international metropolis like Prague.
• High level of bureaucracy at all levels. Dealing with officials can be a nightmare sometimes.
• Prague is still relatively quiet. Several top Czech startups have opened UK & US offices for raising capital, business development & sales while keeping development and customer support at home.
• Prague can sometimes feel still rather local with Czech spoken at most events.
• Many distractions – laid-back mentality of Czechs, cheap beer, all-night clubs…
• Prague is bike unfriendly.

Meeting People In Prague

Prague is not London or Berlin but you can find a good number of events every month – unfortunately most of them are in Czech. If you are new to the city, do talk to the people people mentioned below who will help you navigate.

Upcoming Events, Meet-ups & Other Occasions:

• Event Hunt is a Product Hunt like platform for people who want to socialise, learn new things, get new opportunities (investors, free business advice) in the area they are in and also to help to get to know people when they move to a new location.
• ImpactHUB – one of the best coworking spaces in Prague and not least because of its events.
• StartupDigest keeps you up-to-date with the latest news and events in your area.
• You can find a good list of events by TyInternety magazine here (Czech only).

Regular Events & Meet-ups:

• Webexpo – a big event in central Europe which connects people from different areas of the web – business, development and design.
• Engage2015 – social media educational summit organized by SocialBakers.
• StartupSummit is organized by TyInternety publishers, in June. Corporates keen on startups are actively taking part in this event.
• Prague Entrepreneurs – the English-speaking entrepreneur community of Prague organizes generally good events with a decent turnout.
• Appparade – competition of the best Czech and Slovak mobile apps.
• CreativeMornings is a free, monthly breakfast lecture series for creative types. Each event is free of charge, and includes a 20 minute talk, plus free coffee.
• Tuesday business network and its events are available here.
• InterNations Prague is a lively community organizing great parties, mainly for expats living in Prague.
• TED is a global set of conferences under the slogan “Ideas Worth Spreading”. Make sure to check out the Czech edition.
• NaVolneNoze is a great community of freelancers and they organize great events, many of them in Prague.

Unfortunately, the media coverage of the Czech startup scene is in Czech only. The list of some local business media in foreign language is here. The major media covering startups, tech business, e-commerce are Lupa, TyInternety and CzechCrunch. All three cover the startup scene in a similar way, adding many interviews with key players from business. EU-startups.com covers internet and mobile startups accross Europe, including the Czech Republic. Inventures has also covered numerous Czech startups.

Working In Prague

Now that you’ve discovered the Prague startup community and met local entrepreneurs, you need a nice cafe or a cool office space to work from. Let’s check out some of Prague’s co-working spaces.

• NODE5 – arguably the best coworking space for an international tech startup providing a place to work & meet, events and a community of entrepreneurs, developers, investors, consultants and other entrepreneurial creatures. Prague-based accelerator StartupYard is located there.
• Impact HUB Prague, part of the Impact HUB global network, is a workspace for meetings, innovation, entrepreneurship development and events with a major focus being social entrepreneurship.
• TechSquare – one of the first coworking spaces in the Czech Republic. Its mission is to connect startups with the corporate world.
• Locus Workspaces are beautiful and affordable shared offices in Prague intended to help independent workers of all kinds to work more effectively, professionally, and enjoyably.
• Techsquat combines living and working.
• Paralelní Polis – striving to become a true hackerspace (with a particular focus on 3D printing & bitcoins), open for freelancers, small companies, students, but also ordinary people implementing their projects.
• Other coworking spaces are Pracovna, CreativeGate, DeskRoom, IN-SPIRO, ARTEK.

Join this Facebook group to learn more about coworking in Prague.

Financing In Prague

After Telefonica’s Wayra pulled the plug from Prague in 2015, StartupYard is probably the only true seed accelerator in Prague. StartupYard is a seed accelerator for technology startups. Its goal is to help companies build viable products, launch fast and raise capital successfully. StartupYard has some good local mentors. It is a good starting choice before you consider joining top tier accelerators, such as Y Combinator or TechStars.

There are two rewards-based crowdfunding platforms in the country.

• HitHit and Startovac – both are mainly for artists, creative workers, designers, developers.The first equity crowdfunding platform – FundLift –  will be launched in 2015. It is backed by two investment groups which invest in startups themselves. Let us see if they let the crowd invest in top projects they find.

Venture Capital:

• Credo Ventures is a venture capital firm that focuses on early stage companies in Central and Eastern Europe across the information technology, internet, mobile and healthcare markets. CredoStage1 has raised €18M. Since its inception, Credo has amassed solid experience in providing thorough assistance CEE startups. Their most successful exit so far is Cognitive Security sold to Cisco.
• Rockaway Capital, an early stage VC, was founded by people with a solid track record from the technology and e-commerce space. Its Value Creation Team provides know-how and experience in areas such as analytics, market research, UX/UI or company processes to the invested teams. Rockaway is a co-founder and co-investor of the Czech ICT Incubator @ Silicon Valley.
• MITON invests into companies in the consumer internet space in CEE and especially in the Czech Republic. They love to approach the masses, improve how they spend their time, money and how they search for information. They never enter a segment, where the current players are already doing a great job, but they will gladly disrupt the areas that have been without progress and create new areas for which the time has come.
• Springtide of the KKCG private financial group seeks opportunities to invest and help operationally right from pre-seed / seed stages all the way up to successful exits with a strong preference for projects involving information technologies with potential for rapid scale-up and geographical expansion across Europe or globally.
• J&T Ventures of J&T Bank is an early stage (50k USD – 500k USD) VC fund focusing primarily on CEE startups with global potential primarily from IT, education, healthcare, finance and new technologies.
• Czech Venture Capital Association lists institutional investors and its members here. Most members prefer to invest in growth stage companies, not startups.  Top Czech startups with a global vision tend to raise seed capital locally and then seek investors in the US/UK for later stage funding.

Angel Investors:

The ecosystem of true angel investors is slowly developing but there is no official and properly functional BA network yet.  There are dozens of individual investors who have experience in founding and running successful technology companies such as Ondrej Tomek, Karel Obluk, Tomas Cupr, Martin Kasa, Jan Vsiansky, Jiri Hlavenka and more.

Many angels are less visible or prefer to invest via trusts. The best way to meet them is through introductions from people active in the community and places like Node5. Some local angel investors are listed on StartUs, AngelList , StartItUp or Lupa.

Mentors In Prague

There are a few key people who are good to know if you want to quickly get in the centre of the Prague startup ecosystem. Lenka Kucerova has been working with startups for several years and is always ready to help, connect and advice. Also, visit ImpactHUB and ask folks there (Zdenek Rudolsky, Bara Halikova, or me if I am not on the road) for help. Will Bennis, born in the US, is a coworking space owner  a nice guy always ready to help. Adrian Budinszky, another expat living in Prague, is another great source for advice. Adrian is the main organizer of Prague entrepreneurs meetups. Also, Techsquat people are ready to help. Credo Venture and Rockaway Capital regularly attend local events and gladly meet with new entrepreneurs and startups in town.

There is a number of Facebook groups dedicated to startups, entrepreneurship, networking and expat life:

• Czech Startup Group
• Inet Biz Group (“people from the net”)
• Prague Entrepreneurs
• Prague Entrepreneurs (Meetup)
• Meetups in Prague
• Prague Expats
• Prague Expats – Unite

Czech ICT Alliance brings interesting individuals mainly from Silicon Valley to speak and help, hosts various events, takes startups to events like TechCrunch Disrupt or Pioneers Festival.

The Association for Foreign Investment has a list of leading service professionals helping foreign entities to establish and develop their operations in the Czech Republic.The CzechICT Alliance is another place where to ask for help. The BusinessInfo portal and Czech Invest provide useful information for all who want to do business in the Czech republic. Prague.TV  is a good place with useful information.

Are you ready to start-up in Prague?

 

 

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Co-author: Lenka Kucerova
Many thanks for their help to Jiri Vicherek, Jarda Trojan, Kamil Brejcha.

Last updated: July 29th, 2016

The guides are like startup communities – they constantly change and grow. Make sure to check for updates and if you have something to add or want to publish one for your city, get in touch right away! And don’t forget to enrich the startup ecosystem by creating your company profile at StartUs!

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