08 Feb 2021
EC Report highlights shortcomings in EU equity funding landscape
On 5 February 2021, the European Commission’s Directorate-General for Research and Innovation published the results of an independent expert report identifying the investment gaps existing in the EU and reasons behind these. DG RTD sees the findings as an essential contribution to understand the relationship of EU support with the European venture capitalist (VC) ecosystem. The report explores ways on how to ensure appropriate access to financing for innovative, high growth European SMEs as well as further development of the VC eco-system across Europe.
Key findings include:
- European funds need to be easier to use and apply for by streamlining and increasing the flexibility of EU support programmes
- Equity risk constraints should be avoided through a revision of the ability of EU programmes to absorb risk with a focus on a case-by-case basis;
- Administrative procedures should be revisited to make it easier and less heavy to apply for equity funds;
- There should be more coordination among the different EU institutions that provide financing to SMEs in order to support a globally competitive later-stage equity market;
- EU support to the European VC ecosystem should be maintained and further increased through enhanced contribution to tech transfer.
The recommendations set out in the report may serve the work of the European Innovation Council (EIC), which manages direct equity investments in high-risk/high-impact start-ups and SMEs through the EIC Fund.
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