European venture and growth capital funds reform

Latvian Business Angels Network (LatBAN) considers that investment at the earliest stages of startup development should be encouraged through syndicated investment structures funded by business angels. Syndication reduces diversification risk for business angels and helps startups avoid an excessively fragmented cap table.

Finance Watch welcomes the Commissions initiative to expand the scale and improve operational conditions for EU venture and growth capital funds. Targeted policy initiatives such as the revision of the European Long-Term Investment Fund (ELTIF) Regulation and the European Venture Capital (EUVeCa) Regulation have the potential to channel private capital into innovation, in particular for the transition to a more…

Impact Finance Belgium (IFB) is a membership association with an overall goal to increase sustainable and impact investments in Belgium. We are deeply concerned by the suggestion in the targeted review that the EuSEF framework could be repealed.

Startup Portugal welcomes the European Commission’s initiative to review the regulatory framework for venture capital and growth capital funds, recognising in this reform a strategic opportunity to strengthen the competitiveness of the European innovation ecosystem.

Filed in Portuguese · English published by the European Commission

1. The EU needs to create a pan-European pathway to go public. 2. Create at the European level a self reinforcing loop of funding, exits and reinvestment to encourage successful entrepreneurs to invest into venture fund. 3. Offer a continuum of financing from preseed to late stage venture financing without having to cross the pond 4.

BETTER FINANCE, as the leading representative of individual investors interests to European Union (EU) institutions, wishes to share some comments on the Commissions intention to review the framework applicable to venture and growth capital funds.

This initiative seeks to improve operating conditions for EU venture and growth capital fund managers as well as increase their competitiveness in order to further support the EU economy and innovative companies.

Filed in Italian · English published by the European Commission

KKA Management GmbH, a fund manager registered with BaFin without full AIFMD authorisation, welcomes the opportunity to comment on this consultation. Our detailed opinion is attached as a document. In the following, we summarise our key positions. We share the Commission’s assessment that the European market for venture capital and growth capital funds is fragmented and underdeveloped by international standards.

Filed in German · English published by the European Commission

Strengthening the EU ecosystem for venture and growth requires a holistic and systemic policy approach. The challenge cannot be addressed through isolated initiatives, because the barriers to growth are interconnected, involving regulatory frameworks, capital market structures, and financing constraints.

The German insurance industry welcomes the European Commissions ambitions and various measures to foster a European Savings and Investments Union (SIU). We in particular support the consultation's objective of promoting cross-border investments in the EU, reducing market fragmentation and increasing the financing provided by relevant fund segments at EU level.

We are deeply concerned by the suggestion in the targeted review that the EuSEF framework could be repealed. Thirteen years after the adoption of Regulation (EU) No 346/2013, EuSEF has not achieved its initial objective of structuring and scaling a visible European market for social investment funds, as shown by its very limited uptake (15 funds across 5 Member States).

European startups continue to face structural challenges when raising growth capital within the Union. Compared with competing ecosystems, companies often struggle to secure large domestic funding rounds, face incentives to relocate their holding structures to access capital, and encounter longer and less predictable fundraising timelines.

We welcome the Commissions initiative. Europe does not suffer from a lack of innovation or savings; it suffers from a framework that makes it too difficult for venture capital funds to scale, operate across borders and mobilise long-term private capital.

The Bulgarian Entrepreneurial Association (BESCO) welcomes the European Commissions initiative to reform the framework for European venture and growth capital funds. From the perspective of startups and scaleups - particularly in Central and Eastern Europe - addressing structural barriers to late-stage financing, fund scaling and cross-border capital flows is essential for strengthening Europes competitiveness and…

Insurance Europe welcomes the European Commission (EC)s effort and ambition to build a Savings and Investments Union (SIU). Insurance companies are among Europes largest long-term institutional investors. With approximately EUR 9.5 trillion in assets under management, the sector plays a critical role in financing governments, businesses and infrastructure.

With around 700 sub-threshold alternative investment fund managers (AIFMs) and 30 EuVECA funds/17 EuVECA managers, Luxembourg is a popular choice of domicile for small and mid-sized AIFMs in the EU. However, compared to the number of market participants operating in the US venture capital ecosystem (3111 VC firms in 2024), the numbers in Europe are small overall.

We are deeply concerned by the suggestion in the targeted review that the EuSEF framework could be repealed. Thirteen years after the adoption of Regulation (EU) No 346/2013, EuSEF has not achieved its initial objective of structuring and scaling a visible European market for social investment funds, as shown by its very limited uptake (15 funds across 5 Member States).

1) Why this reform matters: Europe does not mainly have a startup creation problem. It has a scale-up capital problem. Too many promising companies can raise seed financing in the EU, but struggle once larger rounds are needed.

With around 700 sub-threshold alternative investment fund managers (AIFMs) and 30 EuVECA funds/17 EuVECA managers, Luxembourg is a popular choice of domicile for small and mid-sized AIFMs in the EU. However, compared to the number of market participants operating in the US venture capital ecosystem (3111 VC firms in 2024), the numbers in Europe are small overall.

This initiative seeks to improve operating conditions for EU venture and growth capital fund managers as well as increase their competitiveness in order to further support the EU economy and innovative companies.

Filed in Italian · English published by the European Commission

The Department of Enterprise, Tourism and Employment welcomes the opportunity to contribute to the Commissions work on reforming the European venture and growth capital framework. As Ireland is a small Member State with a developing venture capital ecosystem, the Department of Enterprise, Tourism and Employment supports measures that enable fund managers to scale, attract institutional capital, and operate…

The EuVECA regulation, introduced in 2013, does not expressly require a depositary, but once the managers AUM exceeds 500MM, the AIFMD provisionsincluding the mandatory appointment of a depositarydo apply. Beyond safekeeping the AIFs assets, the depositary is responsible for monitoring the regularity of the managers investment decisions and supervising the funds cash flow movements.

The initiative is well-timed and addresses a real need in the market. For venture and growth capital to play their proper role in supporting European competitiveness, the regulatory framework must enable fund managers to grow and operate at European scale without facing disproportionate burdens or structural obstacles.

This initiative seeks to improve operating conditions for EU venture and growth capital fund managers as well as increase their competitiveness in order to further support the EU economy and innovative companies.

Filed in Italian · English published by the European Commission

As a collective representative of social impact finance actors, FAIR is deeply concerned by the suggestion in the targeted review that the EuSEF framework could be repealed. Thirteen years after the adoption of Regulation (EU) No 346/2013, it is undeniable that EuSEF has not achieved its initial objective of structuring and scaling a visible European market for social investment funds, as shown by its very limited…

Scaling European funds: - The 500M AIFMD threshold creates a disproportionate step-up in regulatory burden that discourages funds from scaling and forces artificial fund size caps, which penalise SFDR Art. 9 funds in particular because they require larger fund sizes to cover higher fixed costs. -AIFMD requirements are not sufficiently proportionate for closed-ended, low-leverage venture and impact strategies.