Policies for Seed and Early Stage Finance

Abstract

This report highlights the growth in support for financial instruments for seed and early stage firms across OECD member countries. These instruments include grants, loans and guarantee schemes, tax incentives and equity funds. This increased support is linked to the recent financial crisis and the growing concern about young firms’ access to finance. The paper notes that framework conditions play an important role in access to finance and must be taken into consideration as a significant part of the policy mix. Demand-side policies to develop entrepreneurial and investment talent and networks are also critical. The role of evaluation and the need to better link policy objectives and outcomes are also discussed.

Keywords: seed and early stage finance, policy, entrepreneurship, innovation, young firms, access to finance, tax incentives, equity instruments, ecosystems, framework conditions

JEL Classification: A10, F00, F30, G00, G10, G18, G24, H00, M00, O00