A POLICY RESPONSE TO REGIONAL DISPARITIES IN THE SUPPLY OF RISK CAPITAL TO NEW TECHNOLOGY-BASED FIRMS IN THE EUROPEAN-UNION - THE EUROPEAN SEED CAPITAL FUND SCHEME

The European Seed Capital Fund Pilot Scheme (1988-95) was a European C ommission response to two primary concerns that: (1) private venture c apital firms in Europe were increasingly retreating from the financing and support of start-up, early-stage and, particularly, technology ba sed enterprises; and (2) existing spatial concentrations in the supply of venture capital prejudiced the formation of new, innovative busine sses in less economically developed regions of the Union. This paper p resents the updated results of a study of this Scheme in 1992. The com parative internal dynamics of the Seed Funds are explored. The Scheme realized its goal of encouraging private investment into innovative, t echnology-based young firms. However, the continued ability of the fun ds to meet longer-term commercial and/or regional developmental object ives is questioned given scale-related problems of economic viability.