Encouraging a Europe of Enterprise

Bev Hurley panellist at SME Assembly Forum

YTKO Group Chief Executive, Bev Hurley, was invited to participate in a panel discussion at the European Commission’s 2013 SME Assembly in Vilnius, Lithuania this week.  Entitled ‘Encouraging a Europe of Enterprise’, the Assembly included the European Enterprise Promotion Awards ceremony and was scheduled during the European SME Week.

With YTKO Group having previously won the EEPA Grand Jury Prize in 2012 for Promoting Enterprise in a European Funded programme for the business start-up service Outset, Bev was also asked to be on the judging panel this year.

During the Assembly, the “Financing of Enterprise” session, chaired by Joanna Drake, Director & Deputy SME Envoy for the European Commission, covered some of the barriers faced by SMEs in securing the funding to support their plans for growth.

When asked whether Bev thought the introduction of the EU’s new venture capital ‘passport’ regulations (allowing potential investors to invest more easily and market themselves to all 27 EU countries) will be enough to foster growth in the existing marketplace, Bev replied:

“I think one of the problems around venture capitalism and equity is that there is a lot of hype and one of the points I wanted to make today is that educating entrepreneurs about the reality of what different types of funders are looking for is really, really important.

“A debt funder or mainstream bank is going to want to know whether you can sustain your overdraft or your loan and pay it back, whereas an equity investor will be looking at quite different things.  They are going to be looking at intellectual property, how defensible your proposition is, how fast and how large it can scale and what the return to the investor is going to be. And therein lies a big difference between angel investors, who tend to come in at an earlier stage looking for longer prospects, and venture capitalists.

“Therefore, I think venture capitalists bring a different type of support to businesses. The trouble is that in some high growth potential entrepreneur’s minds, everything is a venture capital piece and that’s just not the case. Most of applications I see for equity aren’t viable because they are not ready for investment in terms of an equity proposition.”