Reform assistance to small businesses

27 May 2014

The Swedish government should invest in small and risky projects only in early phases, explained Roger Svensson, IFN , when he presented a report, “ Government funding in small businesses”, published by Timbro. He explained that Fourier Transform and InlandsInnovation, government VC funds, should be terminated as these funds invest in final stages, something that the market can bring about without tax money. Instead, Almi’s loans for innovations should be expanded, along with Almi Invest venture capital. As these two are the only funds financing exclusively small and risky projects in early stages, writes Roger Svensson in the report.

In the picture from left Magnus Larsson ( Expandable Business Consulting Inc. ), Maria Ludvigsson ( editorial writer at the Swedish newspaper Svenska Dagbladet ), Per Åsling (economic policy spokesman for the Centre Party ) and Roger Svensson. The seminar was moderated by Anders Ydstedt.

An excessive part of investments made by public VC companies goes into final phases, explained Roger Svensson in the report. Also, the amounts invested in individual portfolio companies are too high. He said that if you are performing in a market that does not suffer from any market failure, this can be solved with the help of private financing bodies. The risk is rather that public VC funds crowd out private financing. A great way to make sure that money is directed to the right set of small companies are, according to Svensson, introducing a requirement of co-financing (private and public) as well as putting a cap on funding at 10 million.

Published May 27