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This support measure involves a venture capital fund with the purpose of investing in the early stages of business development. An ex ante assessment has concluded that there is a market gap in relation to external equity capital. In particular for small and medium-sized enterprises in the early stages of development. During the 2007-2013 a number of capital funds were co-financed by the ERDF, and based on the success of the initiative, ALMI Invest Stockholm established a new fund (Fund II) which during this programme period will have a clearer focus on the early stages of investment.
Ramboll Management Consulting has since 2009 worked on an ongoing evaluation of the implementation of 11 regional venture capital funds managed by the regional Almi Invest offices with co-financing from the ERDF. The report has the following main conclusions: The funds are well-managed and have an important function; there is demand for the funds; the investments attract private capital: for every public SEK invested private equity of SEK 1.7 is invested; good pace of investments since the establishment of the funds in 2009.
An important challenge, according to the evaluator, is that the funds invest in many SMEs over a relatively short period of time. They need to be active equity owners, develop them together with often inexperienced co-investors, ensure an exit, while they should also work for gender equality, the environment, integration and diversity. At the same time the resources for the management by the funds is limited.
Another challenge that was highlighted is that equity investments, which all of the funds have used, involve a long-term commitment to the SMEs, which is in contrast to the funds being rigged as independent projects with clear deadlines.
Keep in mind the long-term perspective and that investments need to be followed after the publicly co-financed project ends.
Carry out a gap analysis to identify where financial instruments are needed in the region and develop a focused investment strategy, e.g. in Stockholm during the period 2014-2021 focus will be placed on companies in their early development stages.