Endeavor

2 1 R E C O M M E N D AT I O N S : H O W C A N D E C I S I O N M A K E R S I N T H E P U B L I C S E C TO R A N D T H E P R I VAT E S E C TO R S U P P O R T F I N T E C H E N T R E P R E N E U R S H I P I N M I L A N ? FOCUS SUPPORT ON COMPANIES WITH A POTENTIAL TO SCALE. Despite the explosion in the number of fintech startups over the past few years in Milan, only 5 percent of companies were able to employ 50 or more people. A few sub-sectors, like credit, asset management, and payments contributed a disproportionate share of the jobs in the sector, while others, like crowdfunding, underperformed compared to the level of startup activity in them. While keeping supporting startup activities, decision makers should take serious actions to boost the scaleup of companies which could have the ability to driving economic growth. FOSTER RELATIONSHIPS WITH INTERNATIONAL INVESTORS. Based on the interviews conducted for this study, fintech company founders have struggled to raise funding. Banks rarely invest in fintech because they typically do not have the organizational culture, the M&A budgets, or the speed to do so. Italian venture capital investors are cautious because of the exigent capitalization and compliance requirements that minimize prospective multiples, and international investors are cautious to enter the Italian market because of their unfamiliarity with market specificities. Founders who were able to raise capital from international investors, especially if not at growth stage yet, did so by relying on an Italian diaspora and attending international accelerator programs. Decision makers should follow the lead of these entrepreneurs and work to foster connections abroad to increase access to international capital among Italian fintech companies. ADDRESS THE SHORTAGE OF TECH TALENT AND NON- FINANCIAL MANAGERIAL TALENT IN THE SECTOR. Company founders are the best source of information to identify the constraints to growth in a sector. Fintech founders in Milan reported throughout the study that finding the right tech talent and managerial talent is difficult in a competitive European landscape, where founders have to compete for talent with companies in Madrid, Berlin, and Amsterdam. Decision makers who wish to support growth in the fintech sector need to invest in fostering a talent pool of highly qualified non-financial workforce in Milan. Other than economic and tax incentives, examples from other markets include international job fairs to attract tech talent to the city and immersion programs for product and project managers hosting qualified employees with former experience working for scaleups elsewhere in Europe. LEVERAGE ENTREPRENEURSHIP NETWORKS TO FOSTER ANGEL INVESTMENT AND MENTORSHIP AMONG ENTREPRENEURS IN THE SECTOR. Entrepreneurship networks like Fintech District, Italia Fintech, and Endeavor were by far the most influential organizations in Milan based on number of their connections to other organizations. Despite an overwhelmingly collaborative culture in Milan, there is a lack of productive mentorship and angel investment connections among fintech entrepreneurs. This is normal for a nascent entrepreneurship community, but for the sector's future sustainability, networks should work to facilitate connections that go further than networking and leverage the high levels of trust and tight peer-to-peer collaboration to move capital and talent in the system.

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