The European Commission has launched a new programme called the Start-up and Scale-up Initiative that will give entrepreneurs across Europe the chance to grow their business.
The scheme pulls together all the possibilities that the EU already offers and adds a new focus on venture capital investment, insolvency law and taxation. It will improve access to finance, with the commission and the European Investment Bank Group coming together to launch a pan-European venture capital fund that will provide cornerstone investments of up to a maximum budget of €400 million. The fund manager must then raise at least three times as much from private sources, triggering a minimum of €1.6 billion in venture capital funding, the European Commission said.
It has also table a legislative proposal on insolvency law that will allow companies in financial difficulty to restructure early, making it easier for entrepreneurs to launch a second business and be more successful. The commission is also working on a range of simplifications to the tax system that will make European VAT easier and allow smaller companies to expand their business across international borders with less fuss.
Lawmakers hope that the measures will help the large proportion of business that don’t make it beyond their first few years.
“The European Commission is determined to help start-ups deliver their full innovation and job creation potential,” it said.
European Commission vice-president Jyrki Katainen, responsible for jobs, growth, investment and competitiveness, said: “Today’s local start-ups could become tomorrow’s global success stories. We want to help start-ups stay and grow in Europe. [We’ll do this] by helping them navigate the – often perceived – regulatory barriers to fully benefiting from the single market.
“[The commission is] making it easier for them to have a second chance, without being stigmatised if their idea doesn’t succeed the first time around, and improving access to funding by boosting private venture capital investment.”
Commissioner Elżbieta Bieńkowska added: “Today start-ups do not fully take advantage of the opportunities of the single market. Starting and scaling up a company across Europe has to become simpler. Europe needs to become the first choice place for great business ideas to grow into successful companies. This is about new jobs, innovation and competitiveness for Europe.”
The Initiative also puts emphasis on helping navigate regulatory requirements, improving innovation support through reforms to Horizon 2020 – the research and innovation funding programme – and fostering ecosystems where start-ups can connect with potential partners such as investors, business partners, universities and research centres.
Changes to Horizon 2020 will pave the way towards a European Innovation Council and include using €1.6 billion from 2018-2020 to provide bottom-up support for breakthrough innovation projects by start-ups with potential to grow. The Startup Europe network will be reinforced to connect clusters and ecosystems across Europe. In 2017, the Commission will put forward proposals for a single digital gateway that provides easy online access to single market information, procedures, assistance and advice for citizens and businesses.
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