Local software developer creates wishlist for startup ecosystem

A local software developer has issued his own wishlist to create a better startup ecosystem in the country.

Simon Theuma, Co-Founder of IKRI – a website allows tenants to leave feedback on properties they’ve lived in and landlords they’ve interacted with – believes that Malta has the potential building blocks to be “the next Silicon Valley-type ecosystem for serious founders and investors from all over the world, as well as putting local founders on a similar playing field.”

He published a wishlist of ideas which he would like to see in Malta’s startup ecosystem on social media, which includes a mix of incentives, grants and other proposals

Mr Theuma calls for the offering of an incentive to cover a small overdraft optional for initial working expenses while a startup is at pre-revenue stage, either through the Malta Development Bank or a similar banking scheme.

He also suggests providing tax incentives for family offices to deploy domiciled funds in local startups and businesses, similar to how the seed investment scheme operates for individuals. “The money is already here, just pointing outwards.”

Another proposal is for the creation of an S-corp structure. An S-corp is a business entity that elects a special tax status, allowing profits and losses to pass through to shareholders’ personal tax returns, avoiding double taxation. His proposal is that an S-corp structure would be compatible with the proposed EU-Inc setup, which is a new harmonised corporate legal regime. This, Mr Theuma said, should be fast to setup, cheap to maintain but most importantly, should natively carry the benefits that foreign entities already enjoy in Malta. Locals, he said, should also be able to open an S-corp and enjoy the same benefits, he added.

Making reference to the recently launched Business Wallet scheme, he calls for it to be used to incorporate a local version of SAFE agreements, to facilitate investing with the aforementioned incentives.

Mr Theuma also recommends actively seeking out and aiming to bring more accelerators to the country. This, he said, would create a bigger pool of “dealflow options” for investors who are looking to be based in Malta

Another point on his wishlist would be giving so called “validation” grants, ranging from €500 to €2,000 in a relatively flexible manner based on initial Total Addressable Market analysis and a proof of concept, so that a startup idea can be market tested prior to committing to production. “Evaluate with a reply in 1 week, deliver in 2-3 days, no strings attached beyond evidence that the money was used for business expenses. No limit to reapply.” The idea, he said, would have to be an actual startup.

Mr Theuma also calls for incentives and training for startup founders, to help improve their pitching and sales skills as an alternative to just funding the business plan.

His final point is to barter with advertising companies like Facebook, Google and others to get 1.5x -2x credits or more for a 6+ figure spend. “Disburse to local companies at a discount and offer subsidised SEO / ad training or consultancy by local firms to maximise the use of this credit.”