Discover Madrid’s Startup Ecosystem

Check out the infographic on How To Start Your Startup In Madrid

As I just had my training in coaching I will give you the powerful question that any coach would ask you: WHY Madrid? And now, WHAT can I say about this beautiful city? I arrived in Madrid in 1989 (I’m from Argentina) and I really like this city because it is in continuous movement, improving infrastructures, like the airport and the subway (one of the best in the world by the way). What’s more, it has great and happy people and we know how to have a good time, even at work! And there is the SUN of course, amazing culture and the Google School for Entrepreneurs is not far from being opened. Maybe we can ask them WHY they decided to come to Madrid?

Going South: Madrid

Advantages Of Founding In Madrid:

• You can live in Madrid for 1.500€ or you can survive for 900€ per month. A beer costs 1€ (with a free TAPA), a breakfast 2€ with an olive oil toast (delicious!) or a menu for lunch about 9-10€.
• Transport is relatively cheap – you can get 10 tickets for 12,50€ (for bus and metro) and monthly ticket costs 54,60€.
• You can find flats at Idealista and Fotocasa (also if you want to rent a room).
• Madrid has great hotels with very good prices and high quality.
• In the last two years the startup movement has grown in a formidable way. Now there are a lot of meetups and events like Guiripreneurs, Internations or Zink Shower.
• There is a lot of talent in Spain, especially coming from Latin America.
• We have good and cheap coworking offices.

What Startup Founders Have To Consider:

• There is a lot of Spanish people who don’t speak English.
• Taxes: we have 21% of VAT, 19% of personal income tax, and 25% for companies.
• We have more bureaucracy than saxon countries but less than eastern European countries.
• We passed a crisis and the unemployment is high in the country, but not in Madrid.
• Crowdfunding is not an alternative (yet) due to a bad legislation.

Madrid is not in the Champions League of startups but we aspire to be in a better situation for the next season. Many efforts are done by the administration and entrepreneurs. Business Angel networks are growing and Google decided to locate their school here. Now is the time to found, economy is rising by 3% and costs of rent and some services may will rise too in 3 to 4 years.

Madrid’s Vibrant Startup Community

Now, let’s talk about the community: I would say that it is a real community, as people in Spain like to go by their own, like El Quixote, but here you can will find the best events in the city:

• Every year there is Zink Shower for audiovisual and cultural startups and projects (BIG).
• Tetuan Valley is one of the best communities for your startup (SMALL).
• You can also visit Fangaloka –  a funny site if you want an all-in-one for your startup (BIG).
• The South Summit is an excellent competition for startups (VERY BIG).
• Impact HUB’s events are also among the top 5 (BIG).
• Wayra is doing meetups frequently (SMALL).
• Salon Mi Empresa 2 days of networking, talks, workshops, finance and networking, with public and private sector (VERY BIG).
• Madrid Venture Cafe – here you can present your startup to investors and the general public (SMALL).
• The European Institute of Entrepreneurs organizes very interesting rounds and meetups.
• And finally a magazine for entrepreneurs called Startmeup, which is like a Rolling Stone for startups!

Discover A Place To Work In Madrid

Madrid has now a very good offer for coworking spaces. We have 2 styles, the professional ones and more alternative ones. It will depend on your energy and way of life to go to one or the other. Prices are now cheaper than 3 years ago and the offer is very variated.

Co-working Spaces In Madrid:

• Santo Domingo CN – in the heart of the city, one of the best places for your startup (now there is a project of Rocket Internet and the Wayra partners) with training, coaching, legal assistance, 24h access etc. It’s located near Gran Via, SOL.
• Fangaloka – a funny place, where they can help you find everything you need for your startup.
• El Complot – a creative space with very fair prices.
• Utopic Us – an alternative coworking space, in the centre of Madrid.
• Colabora – a small and beautiful space near Gran Via, SOL.
• Madrid Impact Hub – is located near Atocha. Good events here!
• GarAJE – this is a coworking space of the Young Entrepreneurs Association, with boxes for startups and networking events.

If you want to have an office only for you, visit Idealista or Fotocasa. Here you can find not only your flat but also your office. In Spain you have make a downpayment for your flat or office equivalent to 6 months rent, but sometimes you can negotiate it to 3 months. In addition you pay for a month more, the money for this goes to Ivima (the Madrid Offices for renting), you will find further info here.

Being honest, my experience says it´s better to start in an coworking space or the Smart International Lab.

Investment In Madrid

Spain is leaving behind the finance crisis. Cautiousness is in value. Nevertheless investors assume big risk in investing in startups. Still there are opportunities to chose from if you are looking for financial boost. First of all are the 3 F (Family, Friends and Fools). Once you realize you need more money you will be able to get it from banks, a crowdfunding campaign or investors. If your product is validated by the market you won’t need an investor, maybe your company can support costs. But if you need extra money you will need a business plan, an elevator pitch and a lot of determination. Investors put 30% of the money in a moment, and then want their money back multiplied by 10. E.g. if a project needs 100.000€ an investor will put around 30.000€ in for the project. And then if a Venture Capital invests in the project, the investor will want around 300.000€ back. They know that a small company can be valued 10 times more for the fact that one of them is investing in the company. Thats what they want because 8 of 10 of their investments fail. So be careful with contracts. Loans are now provided with relatively low interest rate, so its a good way to impulse your startup, but you will need a local partner, because it’s very important to demonstrate a historical level of income in Spain.

Incubators:

• Grupo Intercom – one of the most important incubators in Spain. Infojobs or softonic come from there.
• Seed Rocket – incubator and accelerator. Special programs in training and mentoring and access to a community of technological investors are provided.
• Wayra – for international projects, promoted by Telefonica.
• Yuzz promoted by Fundacion Banesto, recruiting talent by young entrepreneurs.
• Sonar Ventures founded by Alvaro Cuesta. Their challenge is to accelerate 100 startups in 5 years.
• Mola also has investment initiatives in their projects. It’s promoted by Enrique Dubois.

Grants & Subventions:

• MADRID SMART LAB is the best thing made by the administration. A free 6 months mentoring program in the center of Madrid for foreign startups.
• Comunidad de Madrid is provided by the regional government of Madrid.

Crowd Investing Platforms:

• Crowdacy – is a guide for crowdfunding in all its cases (loan, donation, investment, reward).
• Lanzano – probably the first Spanish plattform.
• Injoinet – very honest guys with an excellent platform – check it out!

Angel Investors:

• Enisa: take a look at this list from ENISA providing info about financing opportunities from the administration.
• Red de Inversores – another investors network from the Madrid government.
• Business In Fact are looking for projects and training investors.
• Cabiedes & Partners  is a Spanish venture capital firm that provides seed funding and early-stage and later-stage investment services. Read more on Crunchbase.
• Iñaki Arrola is a co-founder and advisor in Vitamin K & Founding, member and CEO of Coches.com. He is also a professor in IE. Mentor Seed Rocket. Read more on Crunchbase.
• Rodolfo Carpintier is a business incubator of Internet and 2.0 based projects, supporting entrepreneurs to launch their business. Read more on Crunchbase.
• Martin Varsavsky angel investor. Founded Jazztel in the 90s.

Venture Capital Investors:

• Keiretsu from Caixabank.
• See also the ENISA file.

Other Investment Opportunities:

• Carlos Blanco: one of the pioneers in Internet Startups in Spain. He owns 8 startups and as a business angel is active in more than 12 companies.
• Club del Emprendimiento: for supporting the Culture of Entrepreneurship, traning, buisness angel net, is an EFE Agency partner.
• Enisa:gives loans from public funds for earlier companies as startups.

Gaining Knowledge In Madrid

There is a lot of people involved in this world and the best Spanish companies are investing in projects. This is a real alternative to being unemployed and understand a professional career. If you need some help with taxes I can help you, don’t be shy! We are open to everybody who wants to locate in our city.

The best places to visit as an entrepreneur are:

• Santo Domingo CN: coworking, finance, taxes, advice in general.
• Fangaloka: coworking, finance, advice in general, community.
• Madrid Impact Hub: coworking, finance, advice in general, community.
• Madrid International Lab: coworking, finance, advice in general, community.

You can also find further information in from the regional Government. If you are worried about taxes visit this site – there is a lot of information for contributors. The city government is for residence, for companies. There is a “Tax free” zone (only for the city taxes) and there are links like the Madrid International Lab or Seed Capital grants.

Ready for Madrid?

 

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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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