Capital Markets Union: Why ‘Venture Capital’ Is Not the Answer to Europe’s Innovation Challenge

Lex Research Topics in Corporate Law & Economics Working Paper No. 2018-2

TILEC Discussion Paper No. 2018-010

29 Pages Posted: 3 Mar 2018 Last revised: 8 Mar 2018

See all articles by Mark Fenwick

Mark Fenwick

Kyushu University - Graduate School of Law

Ivona Skultetyova

Tilburg Law School

Erik P. M. Vermeulen

Tilburg University - Department of Business Law; Signify (formerly known as Philips Lighting) - Legal Department; Tilburg Law and Economics Center (TILEC); European Corporate Governance Institute (ECGI); Kyushu University - Graduate School of Law

Date Written: March 3, 2018

Abstract

The Capital Markets Union (CMU) aims to strengthen capital markets and investments in the EU. In the context of innovative SMEs (start-ups and scale-ups), the CMU's goal is to make more "venture capital" available to these businesses. However, greater volumes of available venture capital can address only part of the problem.

We argue that although the CMU may be a necessary step, it has to be situated in a much broader discussion about how to create successful innovation ecosystems. Such an approach highlights the sector-specific needs of start-ups (and scale-ups) and the importance of mobilizing other players, particularly established corporations. This paper gives an empirical example from the artificial-intelligence sector.

Keywords: Capital Markets Union, Venture Capital, Start-Up Ecosystems, Financing of Innovation, EuVECA, EuSEF, SME Instrument, Governmental Venture Capital, Public Investment Schemes

JEL Classification: D24, G24, K22, L26, O16, O31, O32, Q55

Suggested Citation

Fenwick, Mark and Skultetyova, Ivona and Vermeulen, Erik P.M., Capital Markets Union: Why ‘Venture Capital’ Is Not the Answer to Europe’s Innovation Challenge (March 3, 2018). Lex Research Topics in Corporate Law & Economics Working Paper No. 2018-2; TILEC Discussion Paper No. 2018-010. Available at SSRN: https://ssrn.com/abstract=3133588 or http://dx.doi.org/10.2139/ssrn.3133588

Mark Fenwick

Kyushu University - Graduate School of Law ( email )

6-19-1 Hakozaki,
Fukuoka
Japan

Ivona Skultetyova

Tilburg Law School ( email )

Tilburg, 5000 LE
Netherlands

Erik P.M. Vermeulen (Contact Author)

Tilburg University - Department of Business Law ( email )

Signify (formerly known as Philips Lighting) - Legal Department ( email )

Amstelplein 2
Amsterdam
Netherlands

Tilburg Law and Economics Center (TILEC)

Warandelaan 2
Tilburg, 5000 LE
Netherlands

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Kyushu University - Graduate School of Law ( email )

6-19-1, Hakozaki, Higashiku
Fukuoka, 812-8581
Japan

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