Kambis Kohansal Vajargah on Strengthening Vienna's Position as a Startup Powerhouse

As part of the world's largest pre-seed startup accelerator, the Founder Institute Vienna Chapter is committed to transforming aspiring founders into successful entrepreneurs through mentorship, networking, and structured programs. Jacqueline Kressner, Founder Institute Vienna Local Director and a dynamic community leader, interviewed Kambis Kohansal Vagargah, Head of Startup Services and Deputy Head of Founder Services at the Austrian Federal Economic Chamber, to explore his entrepreneurial journey and insights on Austria's startup ecosystem. 

Founder Institute Vienna Chapter is launching in September 2024 led by the Local Directors Stanish Gunasekaran, Kasia Sadowska, Stephan Kreiger, and Jacqueline Kressner.

Kambis Kohansal Vagargah is a key figure in the Austrian Federal Economic Chamber and StartupNOW & Gründerservice, helping to shape the country's startup environment. His journey from aspiring medical student to influential policymaker and mentor reflects a deep-seated passion for entrepreneurship and innovation. Now, we are thrilled to also have him join us as a mentor and featured speaker supporting the local Austrian Chapter of Founder Institute.

Background and Entering the Startup World

Kambis comes from a family where becoming a doctor or at least a lawyer was the norm. He initially started studying medicine in Budapest but soon realized it wasn't where he wanted to be. "I always wanted to do something more on the business side, working with companies," Kambis recalls. He was inspired by his grandfathers, who originated from Iran and were entrepreneurs who built their own business empires and dynasties.

While studying at the Vienna University of Economics and Business, Kambis was unsure about his career path. During a career fair, he was introduced to Whatchado, a startup that uses video clips to create long-term connections. Intrigued, he joined the team as a co-founder, marking the start of his entrepreneurial journey. He found purpose in startup work, and his entrepreneurial career gradually expanded into ventures in education, mobility, and HR, alongside investing in startups.

Around four years ago, Kambis joined the Austrian Federal Chamber of Commerce, seeing potential in policymaking during a challenging time. 

Supporting Policymakers

In his policymaking role, Kambis is dedicated to improving the ecosystem in Austria. "We don't set up or create laws; we lobby for them based on community and company feedback," he explains. 

An ecosystem always benefits from the same relevant factors: talent, capital, market, regulation, know-how, and existing infrastructure. It’s not rocket science, it’s about benchmarking what works and doesn’t work.

Kambis highlights a few key initiatives he contributed to develop or implement:

1. Red-White-Red Card (Talent Visa): The Chamber worked on improving the Red-White-Red Card (talent visa) to attract international talent. "If you scale, you don’t find all the people here in Austria. We need to reach out regionally and get these people to Austria," Kambis emphasizes. He also worked on improvements of the existing law for the working visa, drastically reducing the time it takes to receive a visa and the standard card lasting up to two years. 

2. New Legal Entity Form (FlexCo): This year, the Chamber launched a new legal entity combining the attributes of the standard GmbH (limited liability companies) and AG (publicly listed companies) entities. "We were not able to just improve the GmbH because, politically, it's not so easy; improving an existing legal entity affects all companies. We wanted to introduce a legal entity that is less bureaucratic and very specific for startups that need to scale easily," he explains.

3. Implementation of a Free Stock Option Plan: Kambis also participated in introducing a stock option plan tailored for startups, simplifying processes and reducing costs. "These shares via the flexible company have much better taxation, which was not easy to implement in a country like Austria," he notes. In the past, startups were not willing to give direct shares in a GmbH with voting rights because it was a block for investors; therefore, they ended up circumventing it and trying to do virtual shares (phantom shares). "This was not the best solution and was not good taxation-wise," Kambis adds. 

4. Tax Incentives and Financial Models like the DACH FoF (backed by the government) - yet to be delivered: The strategy here is similar to how a pension fund distributes investment to several specialized VC funds (Beteiligungsfreibetrag). "These models are crucial for startup investment because they reduce tax," he states, similar to the SEIS in the U.K.

Supporting Investors

Moreover, Kambis is actively involved in various exciting initiatives that support investors, including:

1. aws Startup Invest and aws Venture Capital Initiative: Various initiatives like the aws Startup Invest and aws Venture Capital initiative are for investors backed by the Austrian promotion bank. The aws VC set up a fund, raising one million euros, with one million euros guaranteed by the Austrian Promotion Bank. The Austrian Startup Invest raised one million euros from Angels, which the Austrian promotion bank again matches.

2. Spin-off Initiative: One-quarter of startups in Austria are spin-offs. For strategic purposes, they want to commercialize universities' technology in the industry by supporting more universities in setting up spin-off hubs. A 100K investment will be matched with 100K from an AWS Grants institution. Kambis also reveals that the FFG Spin-off Fellowship focuses on researchers.

3. Diversity, Equity, and Inclusion: With these priorities, the goal is more international teams and products to be inclusive of all age groups, particularly those over 50. "The biggest population group is 50+," he notes. "Not many startups are focusing on the 50+ market which is huge and with high purchasing power."

4. Focusing on Emerging Hubs: The Chamber's strategic activities include emerging hubs in regions like India, GCC, and the Balkans.

Supporting Founders

Kambis explains that their focus verticals are on history, R&D, talent, capital, and startup quality. "A lot of focus on climate, fintech, and education," he notes, as these areas often attract increased funding and investment. Other focus areas include:

• Life Sciences—Bio/Med Health Tech: Austria excels in this field with significant know-how, public grants, and numerous exits.

• Quantum Computing: Innsbruck and Vienna lead in Europe with cutting-edge research.

• Early-stage Space Tech: Austria holds global leadership in niches, particularly in Styria and Lower Austria.

• Real Estate - PropTech and Construction Tech: Home to major startups like Gropyus and Planradar.

• Cult Tech: Combines culture and technology, aligning with Austria's arts and music focus.

Competitive Edge in Austria

Kambis highlights three factors that make up the ecosystem in Austria and give it a good positioning:

1. Public Grant Ecosystem: Austria is one of the best public grant ecosystems in the world: "Early-stage public grants support researching and developing a product. International researchers love to come here."

2. High Living Standard and Quality of Life: Austria's high ranking in these areas attracts talent: "For years now it has been on the top. It's important for attracting talents.’’

3. High Productivity: Despite higher labor taxation, Austria is more productive than the U.K. "In the U.K., laborers need five days to do the same amount of work. Austrian employees need four days.’’

However, Kambis acknowledges areas where Austria needs advancement:

1. Later-stage Growth: Austria struggles with later-stage growth, requiring startups to find seeding abroad. "International investors get higher stakes early, making the startup less Austrian than before. Imagine you are a Series A startup, and you go for a 10mn investment—25% owned by Middle Eastern and American investors. The company will be sold to international investors, not in Europe. This can implicate the overall economy in a negative way," he warns.

2. Internationalization: Austrian startups are very export-oriented, which is important for scaling. "However, Europe is so fragmented. If it was one complete single market—the European Union—it would be easier to scale tech companies to create much bigger tech companies overnight. For example, how it works in the U.S.," Kambis suggests. 

Examples include Dynatrace, a NASDAQ-listed company that has most of its employees in Austria but changed ownership early on, becoming international. "The big funds are not established here. However, we have 100+ active funds in Austria. For VC in Austria, it's yet not a place to establish your fund regulation-wise. Many VCs set up funds in Luxembourg and Lichtenstein, Ireland, in the U.K.," Kambis explains. 

An ecosystem takes ten years to develop. We will raise more attention with more unicorn events. If we continue with good-quality startups, we will get more of these events.

How the WKO Supports Startups in Austria

The Austrian Federal Economic Chamber (WKO) supports startups through various initiatives:

1. Regulation and Talent: Attracting more talent from abroad and encouraging international students to become founders through incubation programs and entrepreneurship education from school to university.

2. Collaboration: Engaging in collaboration abroad with major players and emerging hubs, facilitating corporate venturing, spin-outs, and partnerships between companies and experts in emerging technologies like A.I. and quantum technology, as well as providing access to data and expertise.

Thoughts on the Founder Institute

Kambis Kohansal Vagargah sees great potential in the Founder Institute's role in Vienna's startup ecosystem. He emphasizes the importance of integrating into the local ecosystem and collaborating with a mix of stakeholders, including universities, public organizations, and startup organizations, to maximize impact. The Founder Institute already has a strong global brand, which can be a significant asset in fostering credibility and building a robust network in Austria.

Kambis highlights the value of the Founder Institute's global reach, which offers startup founders access to international expertise and mentorship. 

Founders want to ensure mentors have successfully exited before and are among the biggest experts, allowing startups to scale more easily. The Founder Institute's emphasis on global networking and mentorship can provide startups with unparalleled opportunities for growth and expansion.

Personal Goals

Finally, Kambis shares his vision for the future. He aims to expand his international influence, enhance Austria's reputation in innovation, and support successful startup exits through effective regulation.

Kambis's routine involves engaging with key stakeholders, exploring opportunities, and maintaining discipline through structured workdays. He uses Generative AI for productivity, idea generation, and content creation.

Kambis’s Advice on Being a Successful Founder 

• Long-Term Focus

• Success requires patience and persistence over a 10-year span.

• Founders need to be focused on mid-term and long-term.

• Quality and Steadiness:

• Consistent effort is crucial; even promising teams can lose their way without it.

• Steadiness in the face of stress and challenges is essential.

• Opportunistic Mindset:

• Being opportunistic can be beneficial, but founders should always consider long-term goals.

• Timing is critical; launching at the right moment can make a difference.

• Business Fundamentals:

• It's a numbers game—raising capital and developing a sustainable business model is key.

• Success comes from effectively selling the product to customers and investors.

In conclusion, Kambis Kohansal Vajargah brings a practical approach to supporting entrepreneurs and enabling innovation. Through his multifaceted roles, he is enhancing Austria’s reputation as a fertile ground for startups.

For early-stage entrepreneurs eager to transform their ideas into successful ventures, joining a local chapter of the Founder Institute offers access to invaluable resources, mentorship, and a global network of innovators. 

Take the next step in your entrepreneurial journey by connecting with your local chapter today!

The Founder Institute is the world’s most proven network to turn ideas into fundable startups, and startups into global businesses. Since 2009, our highly-structured accelerator programs have helped entrepreneurs raised over $1.85BN in funding across over 200 cities worldwide.

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