Europe, the world’s largest trading bloc, has huge innovation potential and European venture capital can make a vital contribution in transforming this potential into economic growth.
At a time of austerity, the European institutions and national governments have recognised the importance of not only great ideas but those who invest in them – venture capitalists.
Last month, Europe’s heads of government and state met in Brussels for a meeting of the European Council. In their conclusions they recognised that member states that encouraged innovation and research fared better than those that did not (read more here)
The EVCA is working closely with the European Commission to encourage more venture capital (VC) investment to channel expertise and finance into suitable SMEs, those with the ambition to grow and vision to thing big.
The European Parliament is also passionate about VC, as was proved by their championing of the European Venture Capital Funds Regulation, which facilitates cross-border fundraising (more here).
Europe’s policymakers understand that innovative new businesses, if they grow, can lead to growth, jobs and ultimately Europe’s economic recovery.
Venture capital investment can grow an idea into an SME and an SME into a truly global business. We’ve seen that with European success stories like Berlin’s Soundcloud or Estonia’s Skype.
Academic research, compiled by Frontier Economics, shows that venture backed firms are more innovative than non-venture backed firms, regularly investing more in research and development and filing more patents. Patents granted to private equity- and venture capital-backed businesses between 2006 and 2011 are likely to be worth up to €350 billion.(read more here).
Like many – or even most – industries, VC has faced challenges as a result of the financial crisis but those challenges have helped create a vital ecosystem – tailored to growing companies.
Despite those challenges, VC backed 2,900 European companies in 2012.
Europe offers experienced VC fund managers, who have the skills to commercialise innovation on a global scale and who have being doing just that – despite the crisis.
In a time when capital is scare, these managers are expert at identifying the best businesses and helping them to grow. Firms like Rovio, the creator of Angry Birds, or Shazam.
It is surely only a matter of time before investors realise the time is right to look again at European VC, which has so much untapped potential for growth and success.
We already have start-up hubs all over Europe – clusters of great innovative companies in place such as Stockholm, London, Edinburgh, Helsinki, and of course in Berlin – where we are holding this year’s EVCA Venture Capital Forum.
To those of you who have joined us: Herzlich Willkommen in Berlin!