Many sources of financing to stimulate venture capital are still underused in Europe, the European Securities and Markets Authority (ESMA) concludes in a report published on Tuesday 7 March.
The ESMA believes that Europeans could put more savings into venture capital: 3 million European citizens hold non-real estate funds of more than €1 million. Even a very small fraction of this total could have a considerable impact on growth and employment, it argues.
On average, European businesses get €1.3 million from venture capital funds compared to an average of €6.4 million for their American competitors. Only 12 member states also offer tax breaks for investments in fledgling companies. In Europe, 'business angels' are therefore investing in half as many companies as in the US. The ESMA argues that business angels and those who participate in crowdfunding should have access to better disinvestment opportunities. It explains that developing networks and training as well as the development of secondary European markets for private share trading would make these opportunities a reality.
Lastly, the ESMA notes that venture capital funds in Europe invested €4.1 billion between 2007 and 2015 compared to €26.4 billion in the United States.
The ESMA further notes the decline in numbers of young companies becoming stock-market listed. It feels that the revision of the 'prospectus' regulation is a step in right direction, but that other initiatives should be set in place, such as the development of new categories of investors for investments in European companies with high levels of growth. (Original version in French by Élodie Lamer)