Saturday, June 25

The Government opens venture capital firms to small investors

The day that the Minister council gave the green light to process the Crea y Crece law, since Moncloa has already advanced that the project included promoting alternative financial instruments to bank credit. According to the document that has now reached Congress, this means, among other things, opening the doors of the venture capital entities to small investors: with the new legal framework, the minimum amount to participate in this type of collective investment falls from 100,000 euros to 10,000 euros.

The only condition, according to the document to which the Europa Press news agency has had access, is that investors of this profile always make the contribution under advice and with amounts that do not exceed 10% of their assets, if this is less than the 500,000 euros.

The text also includes other changes. For example, the legislation is modified to specify that the main purpose of venture capital is investments in ‘start-ups’, which in the document is defined as financial entities with activity based essentially on applying technology to new business models, applications , processes or products.

In addition, small and medium-sized venture capital firms (venture capital-SME) may have up to 499 employees, almost double the 250 limited by current regulations. The Government’s objective is to homogenize this figure with that of European venture capital funds, which will favor market unity.

Improve competitiveness

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In the analysis included in the document sent to the Cortes, the Government argues that these measures contribute to improving the functioning of venture capital, entities with a very relevant role in the European economy as a whole and in its financing. Greater access to business financing could increase the competitiveness of companies, they justify, which in turn would have positive effects on competition.

These series of changes are in addition to those included in the bill designed specifically for start-ups. The Council of Ministers also approved a few weeks ago to begin the processing of this proposal for a legal framework that includes, for example, deductions of 50% for investments of up to 100,000 euros to this type of company.

Reference-www.elperiodico.com

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