The Definitive St. Gallen Startup City Guide

St. Gallen, a city founded back in the 7th century, is located in the very heart of Europe. Within less than 60 minutes, it’s possible to reach three of Switzerland’s neighboring countries: Austria, Germany, and Liechtenstein. With its unique entrepreneurial spirit, it’s the ideal place to start and run businesses that will transform our way of living.

GPS Direction: St. Gallen

Advantages Of Building A Startup In St. Gallen:

• St. Gallen is located in the eastern part of Switzerland, very close to the borders of Austria, Germany, and the Principality of Liechtenstein. Hence, the city’s location facilitates international expansion and collaboration.
• Switzerland is known for its low tax rates. The VAT is currently set at 7.7%, and startups pay around 18% in corporate taxes, making the city one of the most beneficial places in Europe when it comes to taxation.
• Many founders we have interviewed pointed out that St. Gallen has an exceptional standard of living. The laid-back atmosphere everywhere around the city fosters communication with locals and makes a lot of people that grew up in the region stay. It’s very common to grab a drink after work and have a chat with colleagues (a tradition called “Feierabendbier”). Adding to its attractiveness, the district called “Stiftsbezirk” (Abbey District) is even a UNESCO World Heritage Site.
• Switzerland has one of the best public transportation systems in the world, making it easy to move around. Frequent trains to all major cities (Zurich, Geneva, Munich, Paris, Milan) and the local buses cover the whole city, its outskirts, and the rest of the country.
• The University of St.Gallen (HSG) is considered to be one of the best business schools in Europe. Moreover, the city hosts two more universities, FHS St.Gallen, and PH St.Gallen, and various other educational institutions. Very close by, there are several other universities, including the NTB Buchs, HSR Rapperswil, HTW Chur, FH Vorarlberg, and the University of Liechtenstein. The presence of these institutions facilitates the recruitment of talented staff.
• The Swiss dual education system has received praise on an international level. After 9th grade, students can choose to either stay on the academic track or join a company as an apprentice. The combination of both worlds may be one reason why Switzerland has been ranked No. 1 in IMD’s World Talent Ranking for several years in a row.

What Founders Have To Consider:

• The cost of living in Switzerland is rather high. However, compared to global cities like Zurich or Geneva, the cost of living in St. Gallen is slightly lower.
• Even the most famous Swiss startup ecosystem, Zurich, cannot compare itself to cities like London or Berlin. St. Gallen is not yet known as being a major hub in Europe. However, there are a few startups located in the area that have received international recognition, such as Advertima, and Frontify.
• The language spoken in the city is Swiss-German, which is very different from the German language most people know. As a foreigner, it can be difficult to understand anything. However, most Swiss people, especially the younger generations, are able to speak decent English (and sometimes even French or Italian). With that in mind, being a country with four official national languages (German, French, Italian, and Romansh), there might be a need to translate texts into multiple languages.
• Even though “western culture” seems to be similar all over the world, one must take into consideration the little details that influence likeability. If you know people from Switzerland, ask them about “Dos” and “Don’ts” before you come here for a longer period of time.

Despite the high living costs, Switzerland, in general, is a great place for starting a business. St. Gallen, in particular, shines due to its fantastic quality of life, cheaper prices than Zurich or Geneva, its location close to Austria, Germany, and the Principality of Liechtenstein, and low tax rates.

First Stop: Discover St. Gallen’s Startup Community

A few years ago, the local government, two universities, the cantonal bank of St. Gallen, as well as a research institute for material science and technology, founded a support organization for startups and potential entrepreneurs. Since then, the St. Gallen startup community has gradually developed to become a vibrant and dynamic ecosystem consisting of dozens of startups, support organizations, research institutes, universities, investors, service providers, and pillar companies.

Find Info About Upcoming Events, Meetups & Other Occasions:

• startfeld.ch: Startfeld lists current entrepreneurial events happening in St. Gallen and the surrounding areas. As one of the major protagonists of St. Gallen’s startup ecosystem, the events organized by the innovation network attract lots of founders, business representatives, researchers, and other interested parties.
• startupticker.ch: Startupticker is the Swiss Startup News Channel. The events listed on the website are not happening exclusively in St. Gallen, but take place all over Switzerland. Startupticker is also an awesome source for news on the Swiss startup ecosystem in general.
• startwerk.ch: Startwerk is a blog run by the IFJ (Institut für Jungunternehmen). Again, the events listed on the website happen all over Switzerland, but major events in St. Gallen can be found on the calendar.
• swissstartups.org: The website lists some of Switzerland’s startups, accelerators, incubators, coworking spaces etc. The startup map is open to everyone and enables all players in the Swiss startup ecosystem to get some visibility. Sometimes, major events are listed on the map as well.
• studyinginswitzerland.com: Before you go ahead with building your startup, you might start out as a student in Switzerland. In this case, Studying in Switzerland provides you with all information on studying in Switzerland – for prospective and current international students. Here, you’ll find everything you need to know on the available programs and scholarships, life as an international student in Switzerland and cost of living and studying there. Studying in Switzerland also provides a guide to studying and working in Switzerland where you can find how to apply for student jobs and the legal requirements to undertake before you get a job (at a startup).

Regular Events & Meetups:

Most of the regular events and meetups are organized by Startfeld. Check out their website for the exact dates and updates.

• ZischtigLunch happens every month at the Startfeld Innovationszentrum. On the last Tuesday of the month, an interesting speaker will talk about his or her very own entrepreneurial story. This is a great event to get to know and connect with other people. Refreshments are provided.
• JungunternehmerTreff kicks off with a presentation on a relevant topic for entrepreneurs. After the presentation, people network, which is a great way to connect with other players of the St. Gallen startup ecosystem.
• StartfeldLive provides a great opportunity to get hands-on recommendations from well-established companies and young entrepreneurs.
• ExpertenTalk is an event series where experts in various fields share their recommendations and answer questions relevant for SMEs and entrepreneurs.

Yearly Or Major Events, Festivals, Conferences:

St. Gallen hosts some of the most relevant startup events in the country. This is one reason why the local startup ecosystem has gradually developed to become one of the most vibrant and important ecosystems in Switzerland.

• START Summit x Hack takes place in March. The virtual event is probably the most important event on startups and entrepreneurship in Switzerland. It fosters the exchange between tech and business people including entrepreneurs, advisors, investors, and startups from all over Europe. In the HACK part of the event, major companies like Rolls Royce, Swisscom, and Volvo submit challenges that have to be solved by teams of a maximum of four people within 48 hours.
• Startup Forum St.Gallen is a great opportunity to connect with entrepreneurs and like-minded people. The annual, half-day-long event is organized by the Office for Economy and Labour of the Canton of St. Gallen, PostFinance, RHEMA, and IFJ, and features speeches from local entrepreneurs and a networking lunch.
• SGKB Startfeld Diamant is an annual award honoring the most innovative startups from eastern Switzerland. Out of all applications, five finalists are selected by a jury. The winner receives a cash price of CHF 30.000, each finalist is awarded CHF 5.000. The award is organized and sponsored by the Cantonal Bank of St.Gallen and Startfeld.
• Startup Weekend St. Gallen, organized by Innosuisse, Startup Weekend Switzerland, and Startfeld, is an annual event bringing together potential founders to transform (own) business ideas into innovative business models. After roughly 50 hours of work, the teams pitch their idea to a renowned jury. The top three teams receive material prizes worth up to CHF 4.000.
• Startfeld Innovationsforum is an event format by Startfeld. Happening each year, the event draws attention to a specific topic linked to entrepreneurship and innovation. The event is specially designed for SMEs, and ambitious leaders.
• InvestorsForum, an event by Startfeld in partnership with Swiss Startup Invest, a leading Swiss financing platform, brings together potential investors and selected startups.

Second Stop: Park At A Coworking Space In St. Gallen

There are several coworking spaces located in St. Gallen. Moreover, coworking spaces can also be found in smaller towns and villages in the area. To provide a holistic overview, all major coworking spaces in the whole St. Gallen area are listed below.

Coworking Spaces In the St. Gallen Area:

• Startfeld Innovationszentrum is the most well-equipped coworking space in the region. The Innovationszentrum consists of a big room (called “Piazza”), workspaces, company offices, silent offices, meeting rooms, a maker space, and a kitchen. Various amenities, such as printers, scanners, a 3D scanner, a 3D printer, a laser cutter, small tools, WiFi, and free coffee are provided. Some successful startups have their offices at the Innovationszentrum, such as Advertima and Meteomatics.
• Smart Space St. Gallen is a coworking space in the heart of the city, located at the “Marktplatz”. The space mainly consists of nine workstations, some of which belong to permanent tenants. There is also a separate office available.
• CreativeSpace St. Gallen consists of 12 workstations in three different rooms, a kitchen, an open space, a printer, a scanner, and access to WiFi. The coworking space is located approximately two minutes away from the main train station by foot.
• OstSinn St. Gallen has 15 workstations, a printer, and a conference room, and is located in the heart of St. Gallen. The use of this coworking space is free of charge if you are a member of OstSinn.
• Atelier im Sandkasten is an office space currently in the middle of moving. The main concept of the space is a room that is being furnished by the various occupiers.

The following coworking spaces are located in towns and villages outside of St. Gallen, but still close enough to include them in this guide:

• FUTUR Rapperswil is a free coworking space for startups linked to HSR Rapperswil and is located in the city center of Rapperswil (approximately 1 hour away from St. Gallen by car or train).
• Büro Lokal Wil is a coworking space with an open office and conference rooms located in the city center of Wil (approximately 30 mins away from St. Gallen by car or train).
• Coworking Bottighofen is a coworking space with a roundtable with up to ten seats and various facilities located in Bottighofen, right at the Lake of Constance (approximately 40 mins away from St. Gallen by car or train).
• Coworking Frauenfeld is a coworking space with various workstations, conference rooms, and three separate offices, located in Frauenfeld (approximately 30 mins away from St. Gallen by car or 1 hour by train).
• Smart Space Rapperswil is a coworking space located right next to the Lake of Zurich in Rapperswil (approximately 1 hour away from St. Gallen by car or train). Moreover, there is a separate space for people working in architecture or similar fields.

Third Stop: Tank Your Finances In St. Gallen

Bootstrapping obviously is the easiest way to finance your startup – there is no need to give up equity or pay interest. However, not everybody has the financial capabilities to use bootstrapping as the only type of financing. In St. Gallen, there are many organizations that help you get started, or that finance your growth. Below you will find various resources for financing your startup.

Incubators & Accelerators:

• Startfeld Incubator supports entrepreneurs with coaching inputs, classes on entrepreneurship, coworking spaces, and the opportunity to pitch in front of the foundation’s board. Successful startups will receive debt capital of up to CHF 300.000.
• START Fellowship is an all-expenses-paid exchange program for student founders from countries with weaker startup ecosystems. This year, 10 Colombians and 9 Romanians were hosted in St.Gallen, where they took their startup to the next level.
• Incubator consists of an accelerator program (four boot camps within three months), an “odyssey” (a ten days long trip to Portugal where potential founders work on their ideas and put a team together), and coworking opportunities.
• FUTUR Rapperswil supports entrepreneurs with coaching inputs and coworking spaces. Moreover, the foundation’s awards, for which only students and faculty of HSR Rapperswil are eligible to qualify, include prize money of up to CHF 10.000.
• HSG Gründer Lab is an incubator at the University of St.Gallen that fosters the creation of university spinoffs by offering coaching inputs, the development of business models, a network of investors, and other services.
• Venturelab is one of Switzerland’s most well-regarded incubators. By offering a broad network of successful founders, investors, and potential customers, the incubator has begotten several world-class startups, such as Doodle, GetYourGuide, HouseTrip (acquired by TripAdvisor), and L.E.S.S. Cumulatively, 390+ alumni have raised CHF 1.8 billion in investment.
• HTC High-Tech-Center AG is an incubator offering coaching inputs, office spaces, and capital. Successful alumni include Compuserve (acquired by AOL), and SAF (acquired by SAP).

Grants & Subventions:

• BG OST-SÜD is a non-profit organization providing guarantees for SMEs wanting to take out a loan from a bank. BG OST-SÜD works closely together with Startfeld.
• St.Galler Kantonalbank, in collaboration with Startfeld, provides grants of up to CHF 300.000 for promising startups. So far, the bank has supported entrepreneurs with over CHF 5.000.000.

Crowd Investing Platforms:

• wemakeit.ch is a crowd investing platform from Switzerland. Through the platform, close to 3.000 projects have been backed so far with a total amount of backings of CHF 33.8m and a 63% success rate.
• c-crowd.com is another crowd investing platform based in Switzerland connecting entrepreneurs with potential investors.
• www.100-days.net is a Switzerland based crowd investing platform limiting the number of days a project can be backed to 100 days. However, the duration of the fundraising campaign can be less than the maximum amount – it’s up to the initiator to choose the duration within the limit of 100 days.
• moboo.ch is a crowd investing platform focusing on projects within the areas of solidarity, sports, technology, and travel. The projects on the platform are mainly presented in French.
• cashare.ch is the pioneering crowdlending platform in Switzerland with over 24.000 members. Through peer-to-peer loans, the platform enables private citizens and SMEs to receive debt financing. Since 2008, over 1.800 loans have been granted.

Angel Investors & Venture Capitalists:

• Business Angels Switzerland is an association of approximately 100 seasoned investors and successful entrepreneurs. The network organizes monthly dinner meetings where startups present themselves to potential investors. The presentations can be held in English. However, only German and French are generally spoken during meetings, depending on location. Meetings take place in the Romandy, the Zurich area, and the Lake of Constance area.
• btov Partners is a European venture capital firm based in St. Gallen, Berlin, and Luxembourg. The firm manages institutional funds, partner funds, and offers direct investment opportunities to private investors. Currently, btov has EUR 330m assets under management. btov’s portfolio includes companies such as Outfittery, Xing, and OrCam.
• 3wVentures invests seed money and venture capital in early-stage technology startups in Switzerland. When it comes to seed money, 3wVentures only invests in internet, mobile, and new media startups. When acting as a VC, the firm prefers Internet, CleanTech, and MedTech startups. 3wVenture’s portfolio includes companies such as Uepaa, Lunchgate, and quitt.ch.
• Mamie Capital is a venture capital firm focusing on innovations which are strategic to the high tech industry, offering support to companies that have the potential to lead the next wave of innovation. Mamie Capital’s portfolio includes companies such as Heiq, Xeltis, and BoomWriter Media.

Other Investment Opportunities:

• Venture Kick is a philanthropic initiative of a private consortium launched in 2007. Through a three-stage process, potential founders have the chance to raise as much as CHF 130.000. In stage one, potential founders are asked to present their business ideas to a jury. If successful, the project team receives CHF 10.000. Stage two includes the presentation of a solid business case, three months after the first investment. If successful, the project team receives an additional CHF 20.000. Both investments are offered as non-repayable grants. Stage three includes another pitch six months after the stage two presentation. By then, the venture should have received tangible market feedback, and the project team should have demonstrated an entrepreneurial capacity and a solid foundation for the successful execution of the venture. Successful ventures receive CHF 100.000 that is invested using an adaptive equity model. So far, over 500 startup projects have cumulatively received roughly CHF 21.000.000 of investments by Venture Kick. Supported startups have raised over CHF 1.8 billions of additional capital. Supported startups have a survival rate of 89% after five years. Venture Kick is closely linked to the Venturelab incubator. Venture Kick’s portfolio includes companies such as MindMaze, Ava, Climeworks, InSphero, and Swissloop.
• Innosuisse is the official Swiss Innovation Agency offering a three-step coaching program. During the program, potential entrepreneurs have the possibility to raise up to CHF 130.000. Stage A includes initial coaching (up to CHF 5.000 of investments), stage B includes core coaching (up to CHF 50.000 of investments), and stage C includes scale-up coaching (up to CHF 75.000 of investments).

Fourth Stop: Seek Further Advice & Opportunities In St. Gallen

• Innosuisse, the official Swiss Innovation Agency, also acts as an adviser. As the Swiss government is trying to support potential founders, Innosuisse is a great contact for every entrepreneur in Switzerland.
• IFJ Institut für Jungunternehmen is the leading startup supporter in Switzerland. Since 1989, over 100.000 startups were accompanied by IFJ. The institute is closely linked to Venture Kick and Venturelab and offers free coaching and various other services for (potential) entrepreneurs.
• Verein Startfeld, mentioned many times in this guide, is the entrepreneurial powerhouse in St. Gallen. The organization offers free initial counseling and is the main and most famous contact for entrepreneurs and startups in the St. Gallen area.
• Jung-Unternehmer-Zentrum is a support organization in the region of Wil-Uzwil-Flawil-Gossau as well as Toggenburg, dedicated to growing the startup community in the region of eastern Switzerland. The organization offers free coaching, training sessions, and network access.

With its various resources for entrepreneurs, St. Gallen is an ideal place to start and grow your business. The local government is interested in attracting promising startups and dedicated people to continuously increase the attractiveness of the local startup ecosystem. No matter if you have an awesome idea or if you want to grow your late-stage startup, the area in the heart of Europe provides you with everything you need.

 

 

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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!

Photo Credit: pobre.ch on Visualhunt / CC BY

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