Strengthen seed funding (Policy Brief 265 - February 2012)
In a recent policy brief we studied the barriers of seed funding. Many devices are designed to support public financing of innovative companies, including channel savings towards this sector. They are also stimulated by explicit innovation policy goals and by the support for the development of a SMEs network.
- Strengthen seed funding
Among our proposals on fiscal systems, the most urgent one is to redirect fiscal incentives for riskier investments and better channel savings belonging to investors who are more informed about these sectors. The lack of private funds investing in actual upstream stages of seed funding remains very difficult to make up for.
The global economic and regulatory reforms should accelerate the transformation of the venture capital landscape. To compensate for the lack of funding for seed funding and the need for better support for start-ups, it is important to understand the weaknesses of these devices and point out possible solutions. Private initiatives are currently leading the way and should be encouraged because they are able to optimize the public spending on seed funding. It is also essential to assess the public support for new companies so that these companies can continue to pursue the consistency of different public instruments for venture capital. This strategy would be able to facilitate the current ecosystem-reshaping of venture capital and, ultimately, establish appropriate conditions for innovative breakthroughs.
Summary
- Market failure and active policy
- Venture capital and public policy
- Improve the risk / return of venture capital to build seed funding
- Tools for a public policy on seed funding
- Author: Caroline Le Moign, Department of Economic and Financial Affairs
Press Contact:
Jean-Michel Roullé, Head of Communications
Tel.+33 (0) 1 42 75 61 37 - jean-michel.roulle@strategie.gouv.fr
Les ressources
- Business angels and venture capital in France: tax issues (Policy Brief 237 - September 2011)