Mainstreaming Innovative Instruments for SME development in Europe


Financial Engineering in Veneto


The practice consists of a synergic set of tools to foster investments in innovation.

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Even though in Veneto there is a very high level of entrepreneurial propensity, private funds (and also private venture capitalists), which companies or moreover starts-ups can apply to, are still lacking. The credit system is often far from the SMEs needs and, especially now because of the credit crunch, it is rather reluctant to give loans without the proper guarantees. On the other side, SMEs asking to fund innovative ideas or start-ups working in high-tech sectors like biotech, nanotech and ICT, are not always able to provide guarantees as their value is more based on intangible assets.
Public funds for innovation and research are usually connected to periodic calls which are not always in line with the company’s timescale and needs.

To overcome the barriers above mentioned, a well balanced mix of financial engineering tools, focused on research and innovation, has been set up and launched.
The Financial Engineering actions includes three integrated tools:

1-System of guarantee for innovative investments

2-Revolving Fund for SMEs innovative investment

3-Venture Capital and private equity Fund

In line with the Operating Programme strategy, the Regional Authority has launched tenders to select and charge external Bodies to manage the funds. In all the cases a high level of experience as well as a spread system of local desks is required to give companies assistance as well as coaching.
Besides another mandatory requirement for all the tools is that to the Managing Bodies are requested of an equal amount of private funds to be added to the public provision. Finally the mechanism is studied to feed itself as the guarantee system as well as the revolving fund foresee a return of money and moreover the venture capital fund is based on a reinvestments system.

Jun, 1 2009 Comments Closed | Extending entrepreneurship, Featured, Financial instruments, Good Practices, Support for innovation, Veneto

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