The valuations of private companies are fairly realistic in Portugal compared to other markets so it can look to the future with more confidence, says the CEO of Startup Lisboa, who believes that the focus is turning away from unicorns to sustainable businesses.
"Regarding Portuguese companies, you cannot say that we're living in a bubble already," Miguel Fontes told Via News in an exclusive interview when asked about reports warning of a potential investment bubble burst in the tech industry.
"Of course there are some people that are saying, 'We'll have problems in the next few years regarding investment.'… But the problem for now, I'd say, is not so critical."
The fact that the startup ecosystem in Portugal took shape later than that of many other countries has made it a more realistic market that is not replete with speculations, he said, adding that international investors come to the country because they can find a "very good deal flow" here.
"In Silicon Valley, the valuations are completely crazy and everybody is afraid that one of these days…something will happen. But the evaluations here are [closer to] the real value of the companies so that allows us to be more confident about the future."
However, Miguel says the fallout of a potential investment bubble burst in the international market would inevitably affect Portugal because its economy is intertwined with that of the world.
Asked about his recommendations for dealing with such a possible scenario, Startup Lisboa's CEO said it is "almost impossible" to do many things about it.
"The only thing that I think startups can do is to be aware of that risk and to know that we are living in a moment that won't last forever," he noted, while advising startups to take advantage of existing investment opportunities in a wise manner before the landscape changes.
"The evaluations here are [closer to] the real value of the companies so that allows us to be more confident about the future."
Miguel Fontes, CEO of Startup Lisboa
Importance of Sustainability
Miguel maintains that the focus is now shifting from unicorns—startups valued at more than $1 billion—to more sustainable companies.
Rapid growth used to be cherished a lot in the startup world but now both founders and investors are coming to the realization that the sustainability of a business is extremely important, he said, adding that a balance between sustainability and growth should be achieved.
On the prospects for a recession, Miguel said he does not like to make predictions as "it is almost impossible nowadays to predict the future."
The reality used to be much more predictable and it was very easy to make plans for the next five or 10 years but it is no more possible to do so, he added.
"You need to think strategically, but you can't make big strategic plans like we did in the past because they don't bring value to you. Something may happen and change the game completely."
The CEO of Startup Lisboa says it is important to be able to read the signs and be "flexible" and "agile" but "if we always fear the future, it'll be impossible to do anything."