From Resilience to Scale: Capital, Policy, and the Next Stage

Transcript

SPEAKER_1: Last time we identified real strengths, but now let's focus on the structural and policy aspects that can facilitate scaling. Now: what does the path to actual scale look like? SPEAKER_2: The key idea is that capital is finally being targeted more precisely. SPEAKER_2: Right. And the OECD explains why targeted support matters: a small subset of high-growth firms contributes a disproportionately large share of new jobs and innovation. Concentrating capital on scale-ups is the smarter policy bet. How does that context shape what this new capital can realistically do? SPEAKER_2: It tells us the ecosystem is active but lean by Western European standards. SPEAKER_1: So the fund's impact is amplified by the ecosystem's current size. But why is growth still uneven despite these positive signals? SPEAKER_2: Budapest dominates — nearly all venture capital deals and tech firms concentrate there. However, the focus should be on leveraging international investor relationships to bridge the gap with Western Europe. Founders face tighter access to risk capital, especially at the scaling stage. SPEAKER_1: Say a Hungarian start-up in a scalable digital sector has found early traction. What happens when they need a Series B? SPEAKER_2: That's exactly the bottleneck. A significant share of later-stage rounds in the region are led by foreign funds rather than domestic investors. That founder almost certainly needs international VC relationships — which requires sales and business development capabilities many teams are still building. SPEAKER_1: Some founders leverage Hungary's strengths by keeping engineering in Budapest while relocating commercial operations abroad. SPEAKER_2: Exactly. Some of the region's most prominent scale-ups keep R&D at home while relocating sales or headquarters functions abroad. That retains Hungary's cost advantages while accessing global markets — a pragmatic model Hungarian founders are well-positioned to replicate. SPEAKER_1: Now, the fund is one instrument. What else shapes whether capital actually converts into scale? SPEAKER_2: Predictability. Policy research on Central and Eastern Europe is direct: transparent, stable support schemes outperform frequent ad-hoc changes for scaling firms. The design and stability of Hungary's programmes matter as much as their size. Hungary also participates in Horizon Europe, adding competitive grants and cross-border consortium access. SPEAKER_1: There's also an underutilization problem — founders not fully engaging with what's already available? SPEAKER_2: A real finding. Reports on digital entrepreneurship in Central Europe show founders sometimes underutilise EU-level advisory and mentoring services attached to financial instruments. For someone building in this ecosystem, those non-financial resources can be just as valuable as the capital itself. SPEAKER_1: And the angel investor layer — that piece often gets overlooked. SPEAKER_2: Absolutely. Ecosystems with vibrant angel communities and experienced repeat founders tend to produce more scale-ups. Cultivating local angel networks and founder-to-founder mentorship in Hungary could be as important as increasing institutional capital supply — that's the social infrastructure that turns a funding announcement into actual company growth. SPEAKER_1: The takeaway is that scaling requires a holistic approach: stable policy, international investor relationships, and effective utilization of existing support systems. SPEAKER_2: That's it. EU funding instruments, foreign investor relationships, and local ecosystem depth are real levers — but they work best when capital, policy predictability, and founder support move together. Hungary has the talent and the EU access. Now it's about building the rails.