European Commissioner keen to see venture funding advance in Europe

Erkki Liikanen, European Commissioner for the Information Society and Enterprise, speaking at the 6th European Investment Forum in Brussels last week, reaffirmed the need for venture capital to provide entrepreneurs with the growth finance they need.

Liikanen revisited the point that public equity finance was a not an option in Europe, not simply because of the public markets' current depressed state but also because European equity markets were still far more remote to small companies than in the US. 'We need to ensure that entrepreneurs have access to money at all stages,' commented Liikanen. 'This is a permanent task, irrespective of the state of the stock exchanges.'

He also acknowledged that accessing finance was still too protracted and complicated a process for both investor and investee: 'During such challenging times as the present, we must cut down on the red tape for entrepreneurs and we must help them focus on the long term.' This would require further policy initiatives from the Commission he said – and would also require a greater entrepreneurial spirit from managers, which meant taking more risks.

Liikanen complained that the VC market across Europe was still far too fragmented and that still too few European pension funds were inclined, even when able to, to allocate a portion of their investment capital to VC and private equity. He also asked that the tax treatment of VC investing and related fiscal issues such as stock options for managers be reviewed to ensure a more consistent pan-European approach that was conducive to both investors and entrepreneurs.

The European Investment Forum, which lets companies looking for funding present to prospective VC investors and advisors, had 66 firms present over two days to an audience of over 500.