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EU moves to boost access to venture capital

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EU moves to boost access to venture capital

Lord Jonathan Hill - Photo © European Union 2014 - EP

(BRUSSELS) - The European Commission proposed amendments to the European Venture Capital Funds and to the European Social Entrepreneurship Funds regulations Thursday in a boost for EU capital markets.

The proposal aims to make it easier and more attractive for investors to invest in small and medium-sized innovative companies and social projects. Specifically, particular, the Commission is proposing to open up European Venture Capital Funds (EuVECA) and European Social Entrepreneurship Funds (EuSEF) funds to fund managers of all sizes, and to expand the range of companies that can benefit from venture capital funds.

The Commission says it is also aiming to make the cross border marketing of EuVECA and EuSEF funds cheaper and easier by explicitly prohibiting fees levied by Member States and simplifying registration processes, in order to increase the number of managers, funds, and investments in venture capital and social enterprises.

"Today we are removing another barrier to investment at EU level which is a key objective of the Investment Plan for Europe", said Commissioner Jyrki Katainen: "The three main changes we are proposing to the EuVECA and EuSEF regulations today – broadening the scope of eligible managers; expanding the list of EuVECA eligible assets; and prohibiting fees imposed by competent authorities – will result in a greater number of SMEs getting access to the vital finance they need to grow their businesses."

Commissioner Jonathan Hill, in his last act as Britain's Commissioner, said: "This proposal is part of the package of measures in the CMU Action Plan to strengthen venture capital markets. This proposal will build up scale, diversity and choice for investors, venture capital and social enterprises. Other actions foreseen include the launch of a large-scale fund-of-funds, blending EU and private capital, to support investment in innovative companies across the whole EU."

The reforms form of a part of a range of measures the Commission is taking to stimulate venture capital in Europe. They include the use of EU budgetary support to attract capital from major institutional investors through a pan-European venture capital fund of funds, as well as promoting best practices in national tax incentives for venture capital to foster investment in SMEs and start-ups. The Commission will also provide technical assistance to those Member States who wish to develop market-based finance, such as venture capital.

These measures form part of the Capital Markets Union Action Plan, which aims to unlock market-based investments by increasing and diversifying funding sources for Europe's businesses and long-term projects.

The proposal has been submitted to the European Parliament and the Council (Member States) for adoption under the EU's co-decision procedure.

Further information

Commission Q&A

EC page on venture capital

Document Actions