Europe seems to be working “on a roadmap” to create a new business Angel facility. It is with respect to providing a modern and fresh approach towards the support and growth of entrepreneurs. And that’s by matching Innovative Firms with Suitable investors.
A pan European Co-investment Fund
Last week, Anthony Clarke, Board Member of UK Business Angels Association and Managing Director of London Business Angels, presented the results of the European Commission expert group, at a conference in Cyprus. He has been chairing the group on “Cross-border Matching of Innovative Firms with Suitable investors”.
Matching Innovative Firms with Suitable investors
The event, was organized under the EC Presidency. The EC Commissioner, Barroso, also attended. In essence, we looked at opportunities to promote entrepreneurship across the EU. Anthony Clarke presented his recommendations. Most importantly, these included the establishment of a pan-European Co-investment Fund of 250M euros; to co-invest alongside suitably qualified angel syndicates and groups, across Europe.
We need new strategic approach
In the relevant report by the EU experts group, one thing is very obvious. We can observe that in order for Europe’s early stage companies to generate cash flows, a new strategic approach is now considered more than necessary. In like manner, the expert group clearly states that Member States should attempt to raise awareness of angel investing. That is, as an alternative investment class. Possibly by introducing tax brakes, to incentivise business angels to invest in high-risk seed and startup businesses.
Additionally, the report clearly suggests that there is a priority to encourage women to become angel investors. EBAN (European Business Angels Network) estimates that women now represent only around 10% of Europe’s angel investors.
Last but not least
The expert group made clear that the EU must play a more active role in stimulating and enhancing cross-border early-stage investing. Recommendations suggest the European Commision to start supporting business angel investments through a new facility that has an order of magnitude of at least 250 million Euros.
“The facility should co invest with suitably experienced angel syndicates and groups, whereby only the best deals should be supported (demand driven, no country quotas). The aim of the facility should be to support the professionalization of the angel community; and the transfer of best practices. This facility should be administered by an entity or entities with specific business angel market experience. Preferably cross-border”.
If you like to read the whole report, please click here.
