Plan would create a “European Venture Capital Fund” designation and a single rulebook for marketing of VC funds across the EU
In June 2011 we reported on the European Commission’s consultation on the need for an EU-wide “passport” for venture capital funds. Yesterday the Commission published its proposed regulation that would create this passport and summarised it in its press release as follows:
“The new regulation will make it easier for venture capitalists to raise funds across Europe for the benefit of start-ups. The approach is simple: once a set of requirements is met, all qualifying fund managers can raise capital under the designation “European Venture Capital Fund” (EVCF) across the EU. No longer will they have to meet complicated requirements which are different in every Member State. By introducing a single rulebook, venture capital funds will have the potential to attract more capital commitments and become bigger.”
As the Commission observes in its frequently asked questions document on the proposed regulation, at the moment:
“there are no specific EU level rules that facilitate fund-raising by venture capital fund managers. Venture capital is much more developed in some countries than in others but only nine Member States have put in place dedicated rules for venture capital. The remaining 18 countries apply general rules on company or corporate law to venture capital funds. As a result, there is limited cross-border fundraising activity of European venture capital funds. On average, the proportion of cross-border fundraising for all types of venture capital funds has for the last four years reached only 12% (€ 2.5 billion)”.
The EVCF passport
The European Venture Capital Fund passport would be available for venture capital funds that: