France Digitale's position on EU venture and growth capital reform

France Digitale welcomes the ongoing reform of the EU venture and growth capital regulatory framework. This review is essential to addressing the EUR 750-800 billion annual investment gap in innovative European companies and enabling European startups to scale without relying on non-EU capital.

Our answer addresses critical barriers that prevent EU fund managers from achieving the scale necessary to compete globally and adequately support the financing needs of European scaleups. A more competitive and integrated EU fund ecosystem is essential to mobilise long-term capital for innovative European companies and to reduce the financing gap relative to global competitors. 

France Digitale’s main objective is to enable the emergence of larger venture and growth capital fund managers capable of competing globally. To achieve this goal, the regulatory framework must enable fund managers to grow from EUR 100–500 million to EUR 1+ billion in assets under management (AuM) without prohibitive regulatory friction. The framework must facilitate seamless fundraising and investment across EU Member States while reducing national and regional investment mandates that constrain capital allocation to the most promising projects. Regulatory requirements must match actual risk profiles. Finally, appropriate regulatory frameworks must be established to channel institutional (pension and insurance) and retail savings into venture capital.

Our core proposal: a three-tier framework

We call on the Commission to introduce a tiered regulatory approach that enables fund managers to grow from EUR 100 million to EUR 1+ billion in assets under management (AuM) without facing prohibitive regulatory barriers:

• Tier 1 (below EUR 500 million AuM): remove national gold-plating through maximum harmonisation, ensuring sub-threshold managers can operate efficiently across borders.
• Tier 2 (EUR 500 million to EUR 2 billion AuM): Transform EuVECA into « EU Growth » – a credible « 28th regime » for venture and growth capital. This voluntary framework would provide full EU passporting rights, proportionate reporting requirements and flexible investment criteria, enabling managers to scale through 2-3 fund cycles before triggering maximum compliance. It would also be better known by Limited Partners (LPs) for VC funds to be able to raise more easily. 
• Tier 3 (above EUR 2 billion AuM): Full AIFMD scope with enhanced supervision appropriate for systemically important managers.

Beyond regulation: mobilising institutional capital

Regulatory reform alone is insufficient. To mobilise capital and facilitate cross-border fundraising and investment, the European Union should also incentivise institutional allocations into the revised EU Growth/EuVECA funds and unlock European savings for innovation and European scaleups to compete globally.

We particularly call for the European Union to put in place a more disciplined version of the UK’s Enterprise Investment Scheme (EIS) and adopt a ‘top-up’ mechanism to enable long-dated European Investment Bank issuance, purchased by insurers, to invest in or finance private growth funds focusing on European strategic sectors.