Innovative and growth-oriented small businesses need to acquire capital (equity investment) from external sources because they do not have their own or cannot access loans. Firms typically use venture capital to expand, break into new markets, and grow faster. Although only relevant to a smaller group, venture capital is essential for the growth of innovative firms.
The Commission works closely with EU countries to improve the efficiency of equity investment markets so that sound projects can find suitable investors.
To move towards a pan-European venture capital market, the EU adopted the Regulation on European Venture Capital Funds (EUVeCa) in 2013. It sets out a new ‘European venture capital fund’ label and includes new measures for venture capitalists to market their funds across the EU under a single set of rules.
Read more about the Regulation on European Venture Capital Funds (EUVeCa).
Under the 2014-2020 Multiannual Financial Framework, we're supporting SMEs and small mid-caps’ access to venture capital through various programmes.
In 2015, we launched the capital markets union initiative to unlock more investments, also for SMEs, and diversify sources of finance. Several actions addressed the shortages in the so-called 'funding escalator', including those related to venture capital.
Read more about the capital markets union.
In 2017, we published a study to evaluate existing tax incentives schemes for venture capital and business angels, analyse and assess possible designs for potential new schemes, and share policy recommendations for the future.
Read more about the study.