Model of the state and EU involvment in the venture capital market

Abstract

It is especially difficult for seed stage companies to find adequate financing. In the last decade venture capital (VC) has played significant role in funding seed and start-up stage companies. Our study focuses on the financing of seed stage companies via venture capital funds subsidized by the state and European Union. Seed stage companies are supported by incubator houses with infrastructure and expertise. Accelerators help them with their partner network, with intensive training and occasionally with capital. There is no sharp borderline between incubator houses and accelerators regarding the provided services. We give an overview about the history of the Hungarian VC market with its most important milestones. In our study, we pay extra attention to the appearance of the governmental and the EU funds, and focus on the model of the local VC market, presenting how funds operate and distribute state subsidies.