Equity investments for the European Structural and Investment Funds

Equity investments for the European Structural and Investment Funds

Using European Structural and Investment Funds (ESIF) to stimulate business start-ups and growth was the focus of the fi-compass event ‘Financial intermediaries and equity financial instruments – working with managing authorities on ESIF equity instruments’ in Berlin on 15 and 16 October 2018.

Stefan Appel, Head of Financial Instruments and International Financial Institutions Relations Unit, DG REGIO, opened the event saying ”Equity instruments have become increasingly important and they can support small to medium-sized enterprises over the whole development cycle from pre-seed to growth. This is why we encourage managing authorities to look into this option and also because equity funds can support the most ground-breaking ideas.”

Investitionsbank Berlin (IBB) has a successful track-record with supporting such innovative business ideas from small to medium-sized enterprises (SMEs) through equity financial instruments co-financed by ESIF, and examples of this experience were shared with the fi-compass event audience. Irene Schucht, Head of Strategy and Products at IBB highlighted her organisation’s role as the business development bank of the Federal State of Berlin and ESIF intermediate body. She noted how IBB’s activities draw on 21 years of experience in using equity financial instruments, including venture capital funds, to invest in new entrepreneurs during start-up and development phases.

Two Berlin-based entrepreneurs described their positive experiences with using equity investments supported by ESIF through IBB’s financial intermediary, IBB Beteiligungsgesellschaft (IBB Bet). Nora Blum, CEO of a healthcare sector SME called Selfapy confirmed that IBB Bet had provided equity twice during the company’s development. She acknowledged that this “had a huge impact for the growth of the company” and she also underlined how having the backing of ESIF proved to be useful for other business purposes. Valerian Seither, Co-founder of a mobility App named emmy Sharing, described added value aspects of IBB Bet’s assistance noting that “Whenever we have a problem or a question arises in our daily business, we have a partner whom we can contact to ask for advice. This is actually the most valuable support we get.”

Sharing best practices

Similar success stories from other ESIF equity investments were also showcased by fi-compass in Berlin. These reinforced the relevance of ESIF equity for filling SMEs’ investment gaps and featured: Latvia’s Acceleration, Seed & Venture and Expansion Funds; France’s Breizh Up Fund and CAP TRI ESIF/EFSI Regional Investment Platform; Northern Ireland’s Access to Finance Solutions for SMEs; and Greece’s EquiFund.

Other key messages from the event that the fi-compass delegates took home covered advice about creating effective venture capital ecosystems. Advice from experienced practitioners here centred on how to identify and exploit investment ‘sweet spots’ as well as best practice by Funds of funds in using public procurement to engage fund managers. Useful experiences about combining ESIF with the European Fund for Strategic Investment (EFSI) were also presented and discussed during the event.

All the presentations and information about ESIF equity financial instruments from this fi-compass event are available here on our website.

We also encourage you to explore video interviews from this event which are available in the 'What they say' section on our website.