VENTURE CAPITAL FUND DESIGNATED TO SUPPORT SMALL AND MEDIUM SIZED ENTERPRISES IN THE CZECH REPUBLIC

The Ministry of industry and Trade of the Czech republic (MIT CR) has agreed to establish a venture capital fund (Seed Fund) based on the findings of the equity gap analysis that identified certain market failures in the Czech republic that mainly occur in the early stages of the entrepreneurship (seed and start-up). Seed and early-stage financing for high-growth companies is still more attractive issue for competitiveness in the countries of the global world. Following the recent financial crisis and difficult economic environment, seed investors have been playing an important role in filling financing gaps left by banks and others facilities. Access to finance for new and innovative small and medium sized enterprises (SMEs) involves both debt and equity finance. Currently and not only in the Czech Republic banks are reluctant to lend to young start-ups due to their perceived riskiness and lack of collateral. Thanks to financial crisis was existing gap at the seed and early stage widened than obviously. Venture capitalists moved to later investment stages where risks are lower.