EquiFund is a new fund-of-funds programme, created by the Greek ministry of Economy and Development in cooperation with the European Investment Fund (EIF) to provide small and medium-sized enterprises (SMEs) with the private equity and venture capital ecosystem they need in order to thrive.
Small and medium-sized enterprises (SMEs) are responsible for two out of three jobs in Europe and often need access to equity financing to build and develop their businesses. Yet Greece has one of the lowest levels of venture capital and private equity activity of the whole EU, according to Invest Europe, the European venture capital and private equity association.
EquiFund aims to strengthen the venture capital market in Greece, in order to provide entrepreneurs with the crucial financing they need to grow their businesses (and attract private sector investment). Its goal is to attract private investment at all stages of entrepreneurship, from start-ups to mature expansion companies.
One of the largest public-sponsored programmes in Europe, the Equifund was launched with 200 million euro from European and national funds, 60 million from the European Investment Fund, 40 million from the European Investment Bank European Fund for Strategic Investments, the core of the so-called ‘Juncker Plan’ and is calculated to receive another 100 million from other private investors. In total, 400 million euro is expected to be deployed in the period 2018-2023 in venture capital investing.
EquiFund uses the innovative tool of equity financing: this is when an investor gives the entrepreneur money in return for a share in their business. In addition to capital, investors also provide valuable know-how and access to networks, helping entrepreneurs progress their venture or business efficiently and effectively. This combination of capital and know-how is often referred to as “smart money”.
On April 16, EquiFund held a bussiness funding event at the Onassis Foundation, inviting researchers, undergraduates, graduates, doctoral and post- doctoral students, established and aspiring entrepreneurs and innovative businesses seeking the means to implement and fund their business ideas.
Addressing the event, Prime Minister Alexis Tsipras urged young entrepreneurs and fund managers to “take a risk now” and invest in innovation and new businesses in Greece. “This is the time to take a risk. If not now, when Greece is beginning to stand on its own two feet, when? And if not they, who?” Tsipras said, as he reiterated his government’s commitment to business ventures by younger entrepreneurs, adding that “innovation and human capital are two building blocks we can use to build a better future.”
“The EquiFund embodies Greece’s productivity reconstruction in action” Economy and Development Alternate Minister Alexis Charitsis tweeted in his account. In an interview with the Athens News Agency (15.04) the minister explained that “this new financing tool is part of the country’s development strategy, as it is a tool for alternative funding for businesses, with emphasis on areas of high added value. The main objectives are to support research, innovation and their integration into productive activity, to support industry and to strengthen business extroversion. Direct Foreign Investments in Greece increased 29.4% in 2017 compared to 2016, which translates into 3.6 billion euros”, the minister noted.
Accroding to the National Documentation Centre, EquiFund is expected to boost the Greek economy by making it possible to access business capital at a time when one of the major problems facing entrepreneurs, chiefly innovators, is securing liquidity and funds. Hopefully the fund will act as a multiplier, unleashing the potential of the venture investment market and transforming the Greek ecosystem.
- EquiFund Brochure: The entrepreneur’s guidebook to equity financing with EquiFund
- Read more via Greek News Agenda: Greek economy entering a new era: Fact Sheet for January 2017 – March 2018; Christos Staikos on the rise of investment interest in Greece; Greece’s post-memorandum era: developmental and social goals