REPORT 2012/05 Start av regionala investeringsfonder ... - circle

(Growth Analysis) is working on behalf of the Ministry of Enterprise, Energy and
Communications on a broader evaluation which includes research surveys, international
experience of venture capital investments and impact evaluation. Together, this on-going
evaluation and the evaluation conducted by Growth Analysis will increase understanding of
ERDF-financed co-investment funds as an instrument in the Swedish context and increase
understanding as to whether use of these kinds of funds in Sweden will be suitable in the
future.
International research shows that this kind of co-investment venture capital fund programme
is difficult to design and must consequently be run as an experimental activity where new
solutions are gradually developed. Moreover, the structure must be adapted to the country’s
regulatory and cultural context and the task of on-going evaluation is to get involved and
generate knowledge of how such factors affect the activities of the funds. This report is the
first in a series of reports that shall gradually increase knowledge of how all parties involved,
including the agency in charge of the programme (Swedish Agency for Economic and Regional
Growth/Tillväxtverket) works with and influences the implementation of the endeavour in
Sweden.
Gordon Murray notes in a chapter in a book from 2007 that the public sector has historically
played an important role in the development of venture capital markets in various countries.
Nearly all countries that have well-developed venture capital markets today (including the
U.S., the UK and Israel) have made extensive public efforts directed at building them up. At the
same time, in his latest book with the illustrative title Boulevard of Broken Dreams: Why Public
Efforts to Boost Entrepreneurship and Venture Capital Have Failed - and What to Do about It,
Josh Lerner claims that it is easy to “enhance” innovations with venture capital, but it is not
easy to do so in the right way – it takes time and there are many pitfalls. Accordingly, the
central issue in this context is how such programme efforts can be done as well as possible.
Together with the evaluation that Growth Analysis is doing, the on-going evaluation will
contribute to such a learning process.
Sweden already has some experience of public co-investment funds gathered in connection
with the three pilot projects initiated in 2005. The present endeavour is significantly larger than
the pilot projects and involves ERDF funding as well as a large number of regional financiers,
which is particularly demanding in terms of implementation and reporting. The road leading
to this endeavour has been lined with extensive analyses and refinement of laws, rules, formal
requirements and the formulation of administrative procedures to be able to begin working
with regional co-investment funds in Sweden. Consequently, its implementation demands
flexibility, cooperation and a mutual desire to learn shared by the managing agency, regional
financiers and fund managers. It is also especially important to obtain indications early in the