Written by EBAN for the European Commission as part of a series, this guidebook describes how business angel investments and co-investments can reach a critical mass across certain sectors, regions or countries. It discusses the various financial instruments policymakers and other stakeholders can implement to cultivate business angel investments, particularly the creation of co-investment funds.
Small and medium sized enterprises are the backbone of European Union’s economy. They provide two thirds of the total private sector employment in the EU and 85% of newly created jobs. SMEs and entrepreneurship are key to ensuring economic growth, innovation, job creation and social integration in the EU.
Small companies are very closely associated with the regions in which they operate. The regions thus benefit directly from economically strong SMEs.
However, SMEs face problems accessing finance, particularly at their early stages. The European Commission has launched the European Fund for Strategic Investment with the aim of improving the investment environment for businesses, including SMEs in Europe. The European Commission is working with financial institutions to improve the funding available to SMEs by stimulating the provision of loans and venture capital through financial instruments. The European commission is also helping the EU Member States and regions share good policy practices on improving access to finance.
In this context, especially for the growth oriented SMEs and startups, business angels play a very important role. In many regions business angels constitute the largest source of external funding for newly established ventures. Business angels are increasingly important in providing equity financing as well as contributing to economic growth and technological advance.
This guidebook describes how investments and co-investments of business angels can be supported in sectors, regions and Member States where their presence is still limited. Given the local and regional dimension of business angel activities, co-investment opportunities through the European Structural and Investment Funds (ESI Funds) and through financial instruments could play an important role in SME financing at that level, if used more actively buy managing authorities.
Some regions have already developed specific supporting actions or co-investment schemes with business angels. This guidebook presents case studies and initiatives already implemented with public funds. We therefore wish to intensify exchange of information between regional and authorities in order to learn from good practices in implementing support measures for this kind of SME financing
Download the Guidebook – Fostering Business Angel Activities in support of SME Growth