1st SME ASSEMBLY/CYPRUS Growing through Finance Anthony Clarke,

CEO, Angel Capital Group Director, UK Business Angels Association ( UKBAA) President Emeritus, European Business Angels Network (EBAN)

Background: Cross-border Matching of Innovative Firms with Suitable Investors

Expert Group Chaired by Anthony Clarke convened by DG for Enterprise and Industry of the EC Working under auspices of COSME and Horizon 2020 12 Experts from SME Financing and Innovation organisations from across Europe 7 Further Experts invited to present to Group 3- All day meetings held 2012/13 Chairman reported recommendations July 2012

The Challenges for the Expert Group

Europes business angel and VC markets currently operate in thin markets Limited supply of early stage VC/Angel equity capital Crowd Funding phenomenon - Good or bad? Entrepreneurs lack of investment readiness knowledge Shortage of well run European accelerator and incubator programmes R&D and Innovation- Shortage of prototype funding Enterprise Europe Network ( EEN) - Access to Finance

The Expert Groups Recommendations

Address the large reduction in available VC in Europe and support funds with real potential for success EC to significantly increase funding to larger VC funds with a European angle managed by experienced managers Support the emergence of business angels to close the early stage financing gap and professionalise them EC to support Business Angel investments through a new business angel facility of at least EUR 250m

The Expert Groups Recommendations

Monitor the emergence of new sources of funding that employ social media (Crowdfunding) EC to set up a specialist Crowdfunding Expert Group issues from a European/International view Support better training of Europes innovative entrepreneurs and enhance their access to information EC to target financial support to SME investment readiness and accelerator programmes

The Expert Groups Recommendations

Address shortcomings in converting EU research projects into innovation EC to set aside a proportion of future R&D budgets for prototype funding & market validity testing Utilise the strength of the EEN to deliver information to innovative companies EEN to focus on a signposting task to direct SMEs to financing specialists in the regions who have proven entrepreneurial and investment experience