The European Commission (EC) is looking to increase venture capital investment between EU member states by breaking down the barriers that currently exist.
In a proposal revealed yesterday, the EC recognised the importance of venture capital funds for financing the growth of small and medium-sized businesses, but argued that this investment could be boosted by making it easier to invest in companies across Europe.
The EC said that the venture capital market in Europe, with its 27 different operating environments, was too fragmented and the process of overseas investment too complex, particularly for smaller VC funds in smaller nations.
The proposal added that overcoming the different national regulations within the EU is making cross-border fundraising too difficult, often discouraging investment in firms which need it most.
The organisation is now calling for a more collaborative approach between EU member states, such as a mutual, agreed regulatory standard for VC funds, to make cross-border investment easier.
Commission vice-president Günter Verheugen, responsible for enterprise and industry, said: “Stimulating cross-border operations will help venture capital funds to specialise and diversify their portfolios.
“This is particularly important for smaller funds and allows smaller countries to benefit from larger venture capital markets. With the proposed partnership approach, the Commission invites the member states and the industry to work together for a more integrated European venture capital market.”
© Crimson Business Ltd. 2008
