The EU has announced amendments to the rules governing European VC funds (Euveca) and social enterprises (Eusef), with the aim of boosting investment in startups and SMEs. The changes will enable fund managers with more than €500 million AUM to market and steer European VC and social enterprise vehicles. The amendments to Euveca will also allow VC funds to invest in private companies with up to 499 employees, as well as SMEs listed on SME growth markets—MTFs being created by MiFID which are set to come into force next year.
The changes aim to address a funding gap for European startups and boost VC investments. Despite Europe's VC industry coming off two years of record fundraising in which more than €17 billion was raised, angel and seed investments have declined by 72% in that period, according to PitchBook’s most recent European Venture Report.
Welcoming the changes, Michael Collins, CEO at Invest Europe, the association representing Europe’s private equity and venture capital said, ‘this will allow funds to invest in a wider range of start-ups, scale-ups and companies across Europe that are seeking investment’. He added that ‘fund managers will benefit from the marketing passport to reach investors across borders’.
The amended rules will be submitted to EU ambassadors, before ratification by the Parliament and Council. The regulations will come into effect three months later.
To read more on the state of Europe's VC landscape, click here.