The Directorate-General for Enterprise and Industry of the European Commission and the United States Department of Commerce have published the final report of their working group on venture capital, advised by industry representatives and academia. The report presents the state of venture capital investing and makes recommendations about global policy learning.
Entrepreneurship and innovation are the two keys to success in economic development providing for wealth creation and a rising standard of living. Furthermore, the commercialisation of innovation and the growth of entrepreneurial firms require that risk capital is available, in particular at the early stages of firm growth.
To promote the competitiveness of small and medium-sized enterprises (SMEs), the Directorate-General for Enterprise and Industry of the European Commission and the United States Department of Commerce established a working group on venture capital, which also forms part of their Innovation and Entrepreneurship Initiative.
The group’s aims were:
* To improve the understanding of policy makers of the private equity and venture capital
industry’s role is in the economy;
* To review the standards on transparency, data, definitions and the valuation methods
used by venture capital funds;
* To understand the current structure and emerging trends of the venture capital fund
* To review the tasks of the public sector.
The group has tried to build a transatlantic dialogue between the venture capital
industry and policy makers. The group has been working in the wider policy context under the “European Union and the United States Initiative to Enhance Transatlantic Economic Integration and Growth” and “Innovation and Entrepreneurship Initiative” as agreed in the bilateral summits of 2004 and 2005. In particular, the initiatives have noted that increased venture capital investments contribute to the goals of stimulating open and competitive capital markets; and to facilitating investment flows that contribute to sustained economic growth.