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InnovFin SME Venture Capital

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What is InnovFin SME Venture Capital?

InnovFin SME Venture Capital - managed by EIF - is, in addition to the InnovFin SME Guarantee Facility, part of “InnovFin – EU Finance for Innovators, an initiative launched by the European Commission and the EIB Group in the framework of Horizon 2020.

It focuses on investing in early stage enterprises via eligible intermediaries, such as venture capital and business angels funds.

Under InnovFin SME Venture Capital, EIF targets investments in around 30 funds, mobilising a total amount of up to EUR 1.6bn to be invested in enterprises located in the EU-28 Member States and Horizon 2020 Associated Countries (Participating Countries).

InnovFin SME Venture Capital is a successor to the early stage window of High Growth and Innovative SME facility (“GIF1”) under the Competitiveness and Innovation Framework Programme (CIP) implemented in 2007-2013.

What kind of financial support does EIF offer under InnovFin SME Venture Capital?

Via InnovFin SME Venture Capital, EIF will primarily invest in venture capital funds and other investment vehicles investing or cooperating with business angels, targeting enterprises which may not yet have started generating revenues from the sale of their product(s) or service(s). This includes companies in their pre-seed, seed, and start-up phases. EIF may also make investments in multistage funds. The investment focus will be with innovative sectors, including life sciences, clean energy and high-tech.

What is the Business Angels (BA) ICT pilot ?

InnovFin BA ICT pilot is a pilot action implemented as part of and in continuity with the InnovFin SME Venture Capital facility, where EIF shall select Business Angels Funds that have significant information and communications technology (ICT) focus, which target final recipients including by means of co-investments with other business angels, business angels syndicates or networks, in one or more EU Member States and Horizon 2020 Associated Countries, in particular (but not exclusively) CEE Country(ies).

Which companies does InnovFin SME Venture Capital invest in?

InnovFin SME Venture Capital was created to support early stage enterprises, which play a crucial role in promoting innovation and the creation of growth and employment but which face difficulties in accessing finance.

Via its selected funds, EIF provides risk capital financing to enterprises in their seed and start-up stage allowing them to set up and/or reach their next development stage. Potential target companies must be established and operating in at least one of the Participating Countries and shall not be active in any of the EIF restricted sectors.

What kind of financial institutions are eligible to become financial intermediary under InnovFin SME Venture Capital?

Eligible applicants are fund managers fulfilling certain criteria, such as:

  • Focus the fund’s investment strategy on areas covered by the societal challenges and industrial leadership of Horizon 2020 (e.g. life sciences, ICT, clean energy technology) or otherwise promoting technological, non-technological, organisational or social innovation;
  • Be established and operating in one or more EU Member States and Horizon 2020 Associated Countries.
  • Provide long-term equity and/or quasi-equity financing;
  • Commit to invest at least 50% of the fund’s investable amounts into enterprises in the early stage, established and operating in one or more Participating      Country;
  • Carry out activities which should not breach ethical principles or contravene EIF restricted sectors.

How does InnovFin SME Venture Capital work?

  • Through InnovFin SME Venture Capital, EIF invests in selected venture capital and business angels funds that provide funding to enterprises in their early stage. The maximum size of each investment in an eligible financial intermediary is limited to EUR 30m (or equivalent in a foreign currency), and shall not usually represent more than 25% of the total commitments in the financial intermediary at any closing. EIF may invest more than 25% and no more than 50% of the total commitments of an intermediary, only if certain conditions are met, such as:

    • an intermediary is focusing on early stage, and
    • an EIF investment is made at any closing other than the final closing, and
    • a policy fit of an EIF’s investment in an intermediary is high as per EIF’s assessment.

How to apply to InnovFin SME Venture Capital?

For fund management companies:

If you are eligible, you can apply by downloading the application documents published under the Single EU Equity Financial Instruments by 30 September 2020. EIF will select intermediaries after a due diligence process. 

For research-based and innovative SMEs and Small Mid-caps:

Are you looking for equity finance? Download here the list of financial intermediaries currently operating under InnovFin SME Venture Capital Facility. For information about finance available under further EU initiatives, please visit http://europa.eu/youreurope/business/funding-grants/access-to-finance/




 
 

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