Brussels, 20/04/2011 (Agence Europe) - On Wednesday 20 April, the European Commission authorised the creation in France of the national venture capital fund (FNA), a €400 million fund to encourage the raising of risk capital for innovative small businesses (SMEs), the initial potential of which is often hindered by a lack of own resources and capital investment. The positive effects of the scheme are greater than any distortions of competition it might bring.
The FNA, which will be managed by CDC Entreprises, a subsidiary of the French Deposit and Consignment Office (CDC), will have a lever effect that will help SMEs by investing in venture capital funds selected by CDC. These funds will, in turn, be expected to invest in non-listed innovative SMEs which have been in existence for at least eight years. Each investment will include private participation of at least 50% (or at least 30% in areas eligible for regional aid) and funding of at least 10% from independent investors. The initial funding will only be for small businesses in the seed or start-up phase but it will be possible to refinance the businesses as they grow. The ceiling for the tranches of funding will be set at a maximum of €2.5 million per business per 12-month period. (F.G./transl.rt)