European Council adopts venture capital and social entrepreneurship funds
date of publication > 22-March-2013
Regulations on European venture capital funds and European social entrepreneurship funds aiming to make venture capital investment in SMEs and startups more attractive were adopted recently by the European Council. The fund managers would benefit from an improved access to finance through the establishment of an EU-wide passport which should help identify funds and acts and be a validity mark to meet the required quality criteria. The proposed European Passport would make it possible to market such funds with eligible investors throughout the EU.
Identical rules across the EU will help create a level playing field for all market participants. The Commission submitted separate proposals for EuVECA and EuSEF, as these two types of funds differ in nature. EuVECA normally focus on providing equity finance for SMEs in the start-up phase of business, whereas EuSEF often have a larger range of relevant investment tools available, such as combined public and private sector finance, debt instruments or small loans. These regulations are part of the Single Market Act to stimulate growth and job creation (9283/11)
and of the action plan to improve access to finance for SMEs (18619/11)
These regulations are very much welcome for EUREKA and Eurostars, its flagship joint programme with the European Commission which is designed for small companies and plays a key role in fostering entrepreneurship and employment, by offering start-ups a chance to develop innovative high-tech products. Eurostars has produced a large number of mature companies and allowed the development of several technologies and access to venture capital funds alongside other financial instruments would be very welcome for SMEs participating in the programme.