Why private investors and public funding agencies need each other

You might have heard of mp3. Yes, that mp3, the disruptive music format that allows you to carry around all your music on a tiny device that fits in your pocket. You might not have heard that mp3 was the result of a publicly funded European research project involving engineers from 5 different European countries. The research that eventually gave us mp3 was one of the many projects made possible by EUREKA, a network of public funding agencies from 40 countries in Europe that allows innovators to bring the result of their cutting edge science to the market.
In terms of venture capital, there’s often a tendency to think in terms of either/or. There’s public money, and there’s VC money. In fact, I want to argue that in the European landscape of today, they probably need each other.
Investing in a new business, and even more developing a new technology, is always risky. And with times as difficult as they are, it’s getting harder for small businesses and startups to find cash for development at early stages. That’s where networks like EUREKA have traditionally stepped in, to get risky research funded and to the point where they can enter the market.
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