Corporate VC leaders address EU antitrust threat

Proposed changes could enforce corporates buying a stake larger than 20% in a company active in the same sector to notify the authorities, even in the case of minority investments. Not only would the required declarations lengthen the time it takes for cash to arrive in a company's coffers, public filings would also leave SMEs less able to protect sensitive financial information.

"Anything that gets in the way or makes VC investing complicated or difficult, or impedes the flow of capital to innovative companies, is going to hurt," said Intel Capital president Arvind Sodhani. "If the EU wants to make that harder, it's going to hurt that flow and ultimately hurt the innovation taking place in those countries."

Though the intention to improve regulation is usually welcomed by the business community, since corporate ventures invest strategically, backing businesses operating in the parent company's field, the reform could be something of a poisoned chalice for the industry.

Following a consultation period, the European Commission will now deliberate and decide its response. And venture communities across the continent have rallied against the proposals, with strong reaction from industry associations such as EVCA.

"They're still open for change; that's what we are trying to influence, along with the EVCA, BVCA and fundamentally every single corporate investor in Europe," said Marcos Battisti, vice president at Intel Capital and managing director for western Europe and Israel. "There has been an effort to understand what they are aiming at, and the venture community is now making proposals that could accomplish that."

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• Topics
• Regulation
• Early-stage
• Intel Capital
• United States