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Mind Europe's early-stage equity gap. Bruegel Policy Contribution 2011/18, 19 December 2011

Veugelers, Reinhilde. (2011) Mind Europe's early-stage equity gap. Bruegel Policy Contribution 2011/18, 19 December 2011. [Policy Paper]

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    Abstract

    Remedying the European Union’s deficient overall business research and development performance requires the nurturing of more new companies in new sectors, enabling them to grow to leading-innovator status. This means addressing young leading innovators’ access to external finance, particularly early-stage venture capital. The funding system for aspiring young leading innovators (‘yollies’) needs to be understood as an interconnected system comprising different types of funding at different stages of company lifecycles. Venture capital funds are critical at the early commercialisation stage. Venture capital investors rely on a good deal flow of high-potential investment-ready firms, on skilled investment managers, and on developed exit markets. Poor returns from early-stage investments in Europe on a smaller deal flow have significantly reduced the appetite for early-stage venture capital. This exodus has left a funding gap in Europe for aspiring yollies. The evidence suggests that there are a number of ineffective public schemes supporting mediocre deals at mediocre funds. Shutting those down would free up enough funding to allow a significant shift towards a more effective venture investing system focused on high quality venture capital and innovative projects from aspiring yollies.

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    Item Type: Policy Paper
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > innovation policy
    EU policies and themes > Policies & related activities > economic and financial affairs > Single Market > capital, goods, services, workers
    Subjects for EU documents: UNSPECIFIED
    EU Series: UNSPECIFIED
    ["eprint_fieldname_eusries" not defined]: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Bruegel (Brussels) > Policy Contributions
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 21 Dec 2011 16:58
    Number of Pages: 10
    Last Modified: 21 Dec 2011 16:58
    URI: http://aei.pitt.edu/id/eprint/33174

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