Eurozone Start-up & Sme Funding Via a Unified Capital Market: Financial Instrument Innovation Supported by Policy Enhancements

The global financial crisis has resulted in credit constraints that have made it even harder for entrepreneurs starting up or trying to expand to obtain requisite funding. Since Start-ups and mainly SMEs are the growth engines of most economies, ensuring that they can be born, grow and thrive is essential to economic prosperity within the Eurozone. The development of a bond market for Eurozone Start-ups and SMEs would present a significant breakthrough. By careful structuring and robust monitoring this can become a viable alternative to scarce and hard to acquire bank loans with high borrowing costs. This book proposes a model in which the European Investment Fund takes a central role in issuing these bonds and providing guarantee structures to minimise risk for private and institutional investors. This model will serve to augment venture capital and other funding options fostering a multi-faced approach to enhancing access to funding for Eurozone Start-ups and SMEs.