When looking through the photos from the AustrianStartups Summit last week, I also noticed one thing: there are a surprising number of gray hairs in the pictures. Of course, this has to do with the fact that some participants have been in the sector for ten years or more and can confidently be called veterans. Maybe many younger founders were also in Hamburg at the OMR festival, at least those who were there didn’t make a big secret about it.
In any case, apart from gray hairs and the like, what is also obvious from the numbers: the startup sector has a problem with young talent. The thesis that I and others had about an imminent wave of start-ups in the middle of the COVID pandemic has not come true. No, times of crisis are not times of start-up. Instead, the many negative news about start-up bankruptcies, reduced investment activity, economic stagnation as a result of the Ukraine war, etc. are likely to deter people from trying new things.
Previous peak is before COVID
It may be that there was a record number of start-ups in Austria in 2023, but 82.1 percent of them are sole proprietorships and they have little or nothing to do with startups (because they generally cannot accept investors, staff or funding, so not are growth-oriented). Rather, it is the case that the number of startups in the narrower sense fell after a peak in 2019 (pre-COVID), and the preliminary figures then from 2021 to 2022 (
It remains to be seen whether the sector will have recovered in 2023, but observers believe that startup activity will settle somewhere between 250 and 300. Here are the corresponding statistics from the Austrian Startup Monitor for 2023:
The new, Linkedin-like online platform from AustrianStartups also provides some information on the problem of young talent. Since the platform launched four months ago, just 82 startups have managed to register in the directory. For comparison: the number of registered organizations active in the ecosystem (law firms, consulting firms, training centers, funding agencies, associations, banks, investors, etc.) is almost three times larger at 236. If you only took these numbers, which are certainly not complete or representative, you would have to say: The ecosystem is three times larger than the startup scene that they serve.
In other countries such as the USA or Germany it was also seen in 2022/2023 that the number of new startups was founded. Most recently, it was observed in Germany that the number of young companies created between January and March 2024 was 658 – a significant increase of 17 percent compared to the previous year. It remains to be seen whether the trend will continue and can also be observed in other countries.
Dozens of startup FlexCos launched
In Austria, one can at least say that the new corporate legal form of the flexible capital company (FlexKap/FlexCo), which was designed primarily for startups, is becoming increasingly popular. Among the approximately 220 FlexCos founded since the beginning of the year, there are almost 40 (clearly identifiable) startups that were established in the last four and a half months. Extrapolated over the year, that would be around 120 FlexCos, in addition to the GmbHs that will continue to be founded. This could lead to more start-ups being founded overall, although it remains to be seen whether the 300 mark can be cracked again. As reported, the Austrian federal government is not expecting a wave of start-ups due to the introduction of FlexCo – this requires other factors, and in the end they affect capital and the market.
Here is the list of all FlexCos founded so far: