| Stimulating the European informal venture capital market - EBAN white paper |
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Dear Colleagues, Stimulating and supporting business angel investment in seed and early stage growth businesses is at the core of the Lisbon Agenda and the EU’s ambitious objectives for competitiveness and growth in the medium and long term. 
Since its creation in 1999, as a not for profi t organisation EBAN has
created a dialogue with public authorities from various administrative
levels to promote the need to develop a growing European business angel
market and national and regional business angel network structures.
Through its organisation of congresses, seminars, and the publication
of many papers on the business angel market, over the past eight years
EBAN has capitalised on the experiences and knowledge of its members
and its contacts with other Angel Networks across the world.The role of informal business angel investors in supporting not only the fi nancial growth of early stage high potential start-ups, but also in strengthening the company’s capacity to manage and absorb grow is now being recognised as pivotal to the growth of European economies. In contrast to Europe, the USA economy, which has a mature angel market, currently benefi ts from annual investment by business angels of circa $23b which exceeds the amount invested annually by their entire venture capital industry. The UK’s Risk Capital Summit, held in 2005 as part of the UK’s Presidency of the EU, dedicated an important part of its debate to the advancement, development and growth of the business angel market in Europe, and to the collaboration between different groups of investors at different stages of company’s development. The European Commission’s communication “Financing SME Growth – adding European value” (2006) encompassed the essential features to be tackled to support the angel market. EBAN is encouraged that the EU now recognise the importance of creating a favourable environment for informal investors to encourage them to take risks in investing in immature unquoted companies. Policy makers in Europe now appreciate the need to address both the demand and supply side market failures by developing capacity building programmes for business angels and entrepreneurs in order to signifi cantly increase the number of completed deals. Europe’s private equity focus solely on buyouts of large mature companies and Europe’s venture capital continues to migrate towards larger and later stage businesses. Business angels, however, remain as the essential actors in the so-called “equity funding gap”. Business angels also provide essential mentor capital to companies in the form of business experience and market contacts. Angels are an integral part of a financial supply chain prior to the entry point for most venture capitalists. Angel Networks are essential organisations for the local and regional economies, providing investors and entrepreneurs not only matchmaking services, but also providing value-added tools to increase the investment potential into fi nancially knowledgeable start ups. EBAN’s White Paper is a statement by our Board on ways in which the EU, national, regional and local governments can now play a positive role in developing Europe’s business angel market which is currently some 15% of the size of the US angel market. It is essential that we now start to close this gap! I trust that this document will stimulate support for a significant increase in Angel actively in Europe over the next few years. To download the EBAN White Paper click HERE |