Equity Investments for Entrepreneurs in Difficult Times — The Approach of the European Investment Fund

Especially in times of a continuously tense economic climate, EU member states rely on institutions such as the European Investment Fund (EIF) to address the challenges of growth and innovation within the European Union. In particular, support for micro, small and medium-sized enterprises (SMEs) and the development of a well-functioning venture capital and growth capital market with sufficient funding is of particular importance for creating growth and jobs in Europe. In this context, the EIF is becoming increasingly important.

The EIF plays an increasingly important role in the design and implementation of equity and debt instruments that specifically address this market segment. Since 1994, the EIF has supported more than one million SMEs with a commitment of EUR 11.7 billion and mobilized some EUR 70 billion in additional funding. Especially in a longer-term tight market environment, the EIF acts countercyclically to stimulate the market.

The European Investment Fund is thus the leading European fund of funds in the areas of venture and growth capital. Through our fund investments, we act catalytically by mobilizing private capital and thus achieving a leverage effect. It is our goal to contribute to the creation of a sustainably stable equity market that stimulates and supports entrepreneurship and innovation. To this end, we work closely with other private and public investors.

Extensive activities in the VC area

EIF takes a market-oriented approach and supports SMEs in their various growth phases through its investments in venture capital (VC) and private equity (PE) funds. Thus, we cover the areas of technology transfer (from research institutions), co-investments with business angels (BA), seed/early stage, and growth capital (see Fig. 1). However, the EIF is not active in buy-outs and investments in listed companies.