The creation of new companies with rapid scale-up potential is vital for growth and innovation in the European economy. For high-risk start-ups and scale-ups, equity investment is an important financing source, but these companies often face difficulties in obtaining equity financing. To address the scarcity of equity investments in Europe for small and medium-sized enterprises (SMEs), the European Commission has set up a number of initiatives.
This report delivers conclusive information on the equity investment situation for European SMEs, evaluates the existing EU support measures to equity markets, and provides a set of recommendations for EU policy intervention going forward. We find that:
We recommend that the existing measures should be streamlined and follow a more principle-based and risk-absorbing approach. In addition, more support should be devoted to the emergence of large later-stage equity funds.
The study is commissioned by the European Commission.Download