FC59A3A6-AD5F-4800-B2B4-CA8252CB1EDB2E390BE3-0999-4DE4-9170-A659A70E4788C41018E2-B6F8-4AF3-9349-E84F37E364A705FCE6A2-9D58-4CA1-AE82-82040558F4A08694A046-D28E-4408-A026-E63A5EB8B73DbackgroundLayer 1backgroundLayer 1Combined ShapeIcon/54/attach_fileaccount_balancecerialclosecreatedescriptionIcon/54/doneexit_to_appIcon/54/publicIcon/54/searchtractoraccount_balance_wallbackgroundLayer 1Icon/32/agricultureicon/32/mvu_businessIcon/32/flight_landIcon/32/schoolIcon/32/local_shippingIcon/32/timeline

60 Million Euros Will Be Available To Seed Capital, Start-up Capital and Growth Capital Funds

02 August 2016

On 2 August, the Cabinet of Ministers approved the state aid programme, within the framework of which merchants and cooperative companies providing agricultural services will be ensured of access to venture capital investments for creating and developing enterprises.

To introduce this programme, the Development Financial Institution ALTUM will select several financial intermediaries (fund managers) within the framework of the public procurement procedure, who, within the framework of seed capital, start-up capital and growth capital funds, will make financial investments in the form of equity capital and quasi-equity investments in merchants and cooperative companies providing agricultural services.

Seed capital, start-up capital and growth capital funds will be allocated the funding of the European Regional Development Fund of 60 million euros, of which 30 million euros are intended for seed and start-up capital funds and 30 million euros — for growth capital funds.
In addition to public resources, the co-funding of private investors in the amount of 10%-60% will be attracted at each investment level, which will be determined depending on the period of operation of the performer of economic activities in the market and the period of the first commercial sales.

Arvils Ašeradens, Minister for Economics:

“To promote the development of new and rapidly growing enterprises that create jobs with high added value, it is crucial for the state to ensure the availability of funding. It is particularly important for enterprises that are unable to receive this funding from commercial banks and private investors due to the high transaction risk, insufficient security, equity capital or performance. With the help of the new aid programme, new venture capital funds will be introduced in the market, providing additional solutions for funding the creation and development of business”.

The amount of investment at the early stage, i.e. seed capital investment, is up to 250 000 euros, while the start-up and growth capital investment is planned to amount to 15% of the subscribed capital of the relevant fund or even more in certain cases.

To promote the competitiveness of performers of economic activities and the viability of funds, new conditions of the state aid programme stipulate that it will be possible to make investments of the limited amount (i.e. up to 25% of the total funding of the European Regional Development Fund available in each seed, start-up and growth capital fund) also in the performers of economic activities, the primary place of operation of which is outside Latvia, yet within the European Union.

The joint stock company ALTUM plans to announce the selection of financial intermediaries in November 2016. Taking into account the fact that the selection of financial intermediaries will be organised of the public procurement procedure, as well as the need fro financial intermediaries to ensure the attraction of co-funding of private investors after the termination of selection, it is predicted that seed, start-up and growth capital funds will start the investment period and funding will be available to the performers of economic activities at the end of 2017.

All news