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LPEA’s Charm Offensive in Berlin

Luxembourg is a well known hub for private equity investment across Europe. What few fund managers and entrepreneurs actually know, is that it is also a particularly interesting location to establish VC funds. This year LPEA decided to tweak its traditional private equity roadshow and address venture capital managers directly in Europe’s trendy startup capital: Berlin! We asked Luis Galveias, LPEA’s Marketing & Communication Manager to get a feedback following that roadshow.

What is the aim of the roadshow?

The Luxembourg Private Equity & Venture Capital Association has been organising “roadshows” in cities such as London, Munich or New York for many years but always focused in the private equity business. This year we decided to organise our first venture capital-focused roadshow and Berlin was our city of choice due to its dynamic community of startups and significant number of headquartered VC funds.

With the increased flexibility of Luxembourg’s structuring options for smaller funds, such as through the implementation of the Reserved Alternative Investment Fund (RAIF) or the increased number of 3rd party management companies, Luxembourg became more attractive and accessible for venture capital funds. The breakfast in Berlin was valuable to share that message with fund managers as well as obtain feedback from the local speakers and participants on what else needs to be done to overcome the typical obstacles of these type of funds.

“We hope this helped making Berlin VCs to see that on top of setting up an optimal fund structure, they can actually become closer to an interesting pool of investment opportunities.”

How LPEA is helping startups concretely along the year?

LPEA brings together the private equity and venture capital firms operating in Luxembourg. In order to better support the entrepreneurs who contact us, we regularly monitor the market for VCs in Luxembourg and take note of the start-ups obtaining VC funding by sharing that information in our magazine “Private Equity Insight/ Out”. More recently at our annual LPEA Insights conference we gave the stage to Job Today, one of Luxembourg’s VC-backed success stories, to present its journey towards an audience of asset managers.

It is important also to highlight that in the event in Berlin we didn’t only speak about structuring VC funds in Luxembourg but also presented the country’s fast-growing startup community. We hope this helped making Berlin VCs to see that on top of setting up an optimal fund structure, they can actually become closer to an interesting pool of investment opportunities.

“We need to widen the spectrum of investors, notably to the earlier stages of funding, by creating better conditions for business angels to invest.”

How is the VC framework suited to startups in Luxembourg?

There isn’t a specific “VC framework” in Luxembourg but rather an overall investment framework which suits well the needs of VC fund managers. As for the startups, we believe the creation of the Luxembourg Future Fund in 2015 – which feeds funds with a commitment to invest in either local or international startups setting foot in Luxembourg; and the creation of the public-private Digital Tech Fund in 2016 (with four investments to date) were two important steps to start focusing in in local start-ups’ needs.

The country needs more investors and we are pleased to see new players such as 2be attracted by fintech and the corporate venture Encevo with an eye on energy appliances, both holding regular contacts with local startups. But we need to widen the spectrum of investors, notably to the earlier stages of funding, by creating better conditions for business angels to invest. Luxembourg is unfortunately one of the few European countries without a tax break for early stage investors or any sort of investment scheme tailored to support startups. That could clearly make a difference as it was the case in many other countries.

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