How To Fill The European Funding Gap And Put Europe Back On The Map

Over the past 18 months, a significant portion of national economies within the European Union have encountered challenges. It is thus more relevant than ever to discuss the future value creation within our economies and how to safeguard the prosperity of our continent.

Undoubtedly, small and medium-sized enterprises (SMEs) serve as the backbone of Europe’s prosperity. They contribute to nearly two-thirds of European jobs and play a profound role in driving economic growth and fostering innovation. Similar to the 1950s-1960s when SMEs relied heavily on external financing, mainly from banks, to fuel innovation, present-day SMEs and startups require funding to effectively commercialize and scale their innovation. Unfortunately, the existing regulatory framework hinders European institutional investors from participating in financing this growth. For Germany alone, this has led to a staggering €2 trillion SME financing gap projected until 2040 according to a study published by Lakestar last year.