Not only in the global race for talent from the tech industry is Europe in danger of falling behind. Companies often prefer to settle in the USA and China. In order to counter the competition, the EU Commission wants to relax the rules for IPOs.
There are far fewer deep-tech companies in Europe, i.e. companies that use far-reaching technologies such as robotics, 3D printers or virtual reality, than in the USA and China. The European Union Commission attributes this to the "fragmented and risk-averse nature" of venture capital markets in Europe. When it comes to financing start-ups, traditional banking products such as loans still play a greater role than alternative financing options through equity.
In order to counter the competition, the European Union wants to make it easier for start-ups to access the capital market - and hopes to attract a total of 45 billion euros in deep-tech financing. The EU Listing Act aims to "enable founders to retain control of their company after an IPO, while raising larger amounts of capital while reaping the benefits of an IPO," according to a draft of a new strategy for digital innovation, which is available to the finance portal "Bloomberg".
According to commercial law firm Noerr, the advantages of a stock exchange listing, especially for small and medium-sized companies, include less dependence on bank financing, greater investor diversification, easier access to additional equity and debt capital, as well as a larger public profile and higher profile . Access to capital market-based funds is therefore particularly important in order to support the upswing and to contribute to the development of a sustainable economy after the Corona crisis. However, many companies currently have no access to the capital market, which limits their choice of alternative financing options. This makes them dependent on traditional sources of funding, which are particularly limited in times of crisis.
"Europe needs to attract institutional investors investing in deep-tech innovations," agrees Mariya Gabriel, the European Commissioner responsible for research and innovation. Increasing the share of European capital invested in innovative companies and startups is one of the main goals. The EU hopes that more companies will relocate their headquarters to Europe.
The EU is losing the "global race for talent" because more and more researchers and academics are migrating to the USA. The Commission therefore also wants to launch a major talent initiative. The self-proclaimed goal: find one million people who work in the field of cutting-edge technologies. The project is to be financed with 20 million euros from the EU budget. In addition, it is planned to start talks with third countries to facilitate the issuance of startup visas.
