The European Court of Auditors recommended on Thursday (24 October) to improve the evaluation of EU initiatives in the field of venture capital and to develop a “comprehensive investment strategy”, after a series of flaws detected in this field.
Venture capital is seen as a critical tool to fuel innovation and the startup ecosystem in Europe.
The auditors examined the European Commission’s budgetary programmes related to venture capital over the past two decades, in areas such as enterprise, industry and research, and the European Fund for Strategic Investment’s SME window.
The report found that the Commission’s decisions had been poorly informed, as it had either not carried out upfront impact assessments or had only prepared its evaluations once budgetary decisions had already been taken.
The auditors warned that increasing financial resources for venture capital funds without properly quantifying the funding gap may lead to the risk that such funds cannot be absorbed.
The Commission is due to allocate more than €3.3 billion to support investments in innovative start-ups through venture capital funds between 2014 and 2022.
The auditors also recommended shortening the approval process for allocating funds by the European Investment Fund, considered a cornerstone investor in the field.
[Edited by Zoran Radosavljevic]