SIM continues to drive startup readiness in Portugal

Startup conferences are nothing new. Over the last couple of decades, they have become more and more popular with both investors and startups. Their role is simple: match potential talent with investors who have money to burn. For many startups, however, the key is not just to look at having access to cash. What they should be doing is looking at what they really want from an investor. Cash, yes, but also knowledge, contacts, access to other services and advice. Never underestimate the power of the latter.

Can Portugal be the birthplace of unicorns?

Portugal has a population of around 10.4 million people. Its nominal GDP for 2025, according to the IMF, was just $337 million. It is far from one of the biggest economies, but with digital nomads and startups, it believes it has found a niche.

A recent report by Live Career shows that Spain and Portugal are the top destinations for UK digital nomads. While this is as much about lifestyle choice as any other factor, it shows the potential in the country.

Those digital nomads are key to startups. Many have ideas for their own companies, and many more end up working for small businesses as contractors or staff. Where those small businesses are startups, salaries can be up to 80% higher than in other companies. This tends to attract key talent, and that is a boost for startups.

According to Startup Portugal, there are 7 Unicorns with Portuguese DNA – created in Portugal and with operations inside the country. But that number is a long way off the big hitters in Europe, and Startup Portugal wants to close the gap. According to a report by Vestbee (registration required), and based on data from Dealroom, 2,800 startups have achieved Unicorn status since 2000.

Of those, Dealroom cites 606 in Europe, with the largest number coming from the UK (185), Germany (74) and France (60). With Estonia boasting 14 unicorns, there is much for SIM Portugal to do if it wants to increase the 8 Portuguese unicorns.

How will Portugal catch up?

In a conversation with Miguel Aguiar, Executive Director (CEO) of Startup Portugal, he talked about how Portugal is driving the startup economy. He explained that in Portugal, the government passed a law in 2021 to define a startup.

“To be a startup in Portugal, you need to have been in business for less than 10 years. You have less than €50 million turnover, fewer than 250 employees, and are highly innovative and highly scalable. Beyond that, a company has to complete a form and be assessed.”

While €50 million is a significant turnover, Aguiar went on to say, “we have two things there, highly innovative and highly scalable. This is the thing that really changes the bar. There are a lot of companies that do that, but they are not scalable, and they are not innovative.”

When asked what other benefits startups get in Portugal, Aguiar mentioned tax status and stock options. “We have a stock option plan for the employees’ startup that is recognised by Startup Portugal. They also pay half of the tax that other companies do. It’s normally 28%, but for them it is 14%, and it’s only due at the moment that they receive the money, so not in the beginning.”

That tax rate stays as long as the company is considered a startup. That’s a significant tax break and one that will help attract more companies. Aguiar also confirmed that startups pay staff up to 80% more than enterprises. Add that to the stock options and lower corporation tax, and it’s not hard to see why startups would choose Portugal.

How many startups are there in Portugal as of today? 5,000. That’s a significant number and explains the interest in SIM 2026.

Aligning education with startups.

Aguiar also talked about how Portugal was increasing the number of engineers and other skills coming out of universities. That means that startups can have a decent pipeline of potential employees with the skills to help accelerate them.

One of the challenges in other countries, for example, the UK, is aligning its education sector with a startup culture. It takes at least four years to change the focus of a degree course, longer if you have to work through A-level changes as well. That often leads to employers complaining that they have to retrain graduates before they can use them.

What wasn’t clear was whether universities in Portugal follow the same pattern as many UK universities. They have developed their own startup incubators where they work with students and have built office parks. That has led to many UK startups being spun out of those institutions. The same is increasingly true in other parts of Europe as people look to the success of US institutions. It will be interesting to see if the main universities in Portugal also go down that route.

A further driver for aligning education with the startup culture has been the integration of other government organisations. Aguiar said that ANI (National Agency for Innovation) and FCT (Foundation for Science and Technology) have merged. The goal is to get academia closer to the enterprise world. It will be interesting to see next year what that has delivered.

Where is the money coming from?

This is a tougher ask for startups and explains why most of the Portuguese unicorns now have their headquarters outside the country. Its nominal GDP for 2025, according to the IMF, is less than 1/14th of Germany’s.

Unsurprisingly, Aguiar says that funding for startups cannot come from just inside Portugal. The government has pulled all its levers, tax rates, stock options and alignment of the education sector, so external funding is required. 17% of investors registered at SIM 2026 are from outside Portugal.

Aguiar says that it has to come from outside. He said that “the investors have been amazing and always supporting and bringing other investors from around the world.” While the initial investors came from Europe, there is much more interest being shown by US investors. What that means in terms of money is around €500 million being invested in the Portuguese startup market to date.

He also noted that the engagement has changed over the years. It is no longer just startups making a pitch for investment, but investors giving talks about what they are looking for. That’s a significant shift in approach. It means that investors see potential in Portugal and are giving startups an idea of what will attract money and what won’t.

Walking around the event, it is also notable how many tables are set up, each with a booking sheet, where investors and startups are having meetings. These are intense, but it’s unclear how many have led to direct investment at the show.

Enterprise Times: What does this mean?

Times are changing. For startups, it’s no longer necessary to go to bootcamp to learn how to pitch. The old school 20 minutes to convince a team of investors of your idea is also gone. Today, investors know what they are looking for. They know where the gaps are in the market, and they want investments that will succeed. Fail fast is great when it’s someone else’s money. Investors are getting more savvy, even if fail fast is still a thing.

Startup Portugal is showing what can be achieved by any government if you want it badly enough. Alignment of academia with business goes beyond startups but is key to getting ideas started. Changes to tax, creating financial incentives and matching investors with startups are also table stakes.

The question now is, can Portugal overhaul a country like Estonia, which is tiny by comparison and deliver a pipeline of startups and unicorns? It will be interesting to see.

The post SIM continues to drive startup readiness in Portugal appeared first on Enterprise Times.