How equity-based financial instruments spur regional economic growth: a contribution by Luigi Amati

January, 31, 2020

Panorama, the publication by the European Commission, in its winter edition includes a contribution by Luigi Amati, President at META Group (holding INSME vice-presidency) and at BAE – Business Angels Europe (INSME Member), focused on the importance of public-private co-investment fund to support start-ups and high-risk companies during the first steps of their development.

Even if Europe is a prosperous area for production of high-quality research and has at its disposal some of the world’s best and most innovative minds, its ability to translate all this into products and services is still much lower than China and USA.

According to Luigi Amati, the investment of large amount of taxpayers’ money in risky enterprises, where only few of them would be successful, could seem dangerous to the managing authorities, but what they do not realize is that the volume of economic and social benefits and the total effect of just few companies on the entire region’s economy will be so relevant to completely justify the losses made.

Especially in Italy, start-ups experienced issue to find the first source of capital gain and it is exactly in this phase that public bodies should support the financial risk, also through the equity based financial instrument promoted by the European Commission, together with business angels and other private entities.

In this way business angels can provide their experience to the growing start-ups and also assume a lower risk and more private investments will be encouraged. The final aim would be to develop a network of business angels and other early-stage investors that can support also future collaborations and venture capital initiatives.

Finally, Luigi Amati states that equity-based financial instruments can boost regional economic growth and are a win-win situation.

Read the whole article here.

Source: The European Commission

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