Commission "Seed Capital" pilot action - Advance Report 1996
The European Commission, DG XXIII and DG XVI, has published an advance report for 1996 on the "Seed Capital" pilot action. This action supports 23 seed capital funds throughout Europe. The Commission provides reimbursable advances to the funds to cover 50% of their operating costs in the first five years. These advances are repayable after ten years. In addition, for funds in the less favoured regions of the EU, the Commission will contribute a maximum of 25% (up to ECU 250,000) of the initial capital of the fund. The 23 funds will receive on average ECU 300,000 in reimbursable advances over the first five years of their operations. In total, the 23 funds have raised ECU 52 million in capital, with further increases by 12 of the funds planned for 1996 which will double the total capital. However a quarter of the funds still have less than ECU 1 million in capital. Of the ECU 52 million raised, the funds have already supported 285 new enterprises, with capital of ECU 35.4 million. The firms supported have also demonstrated a higher survival rate than the EU average. Whereas, on average, only 45% of new firms in the EU survive their first five years of activity, 63.3% of firms supported by the pilot seed capital funds survived for five years. As a result of the seed capital invested so far, 2,238 jobs have been created, 87% of which are in companies with medium or high technological content.