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particularly damaging to venture-backed companies that have invested heavily in product development and whose ideas may be exploited by much larger rivals, stifling competition.

Finally, we are very concerned that the initial Commission proposal to exclude smaller businesses from these provisions (below 250 employees) has been watered down in some proposals to companies with less than 50 employees (Articles 26 to 30). This shows no understanding of the resource requirements of very early-stage companies at a vulnerable stage in their corporate development. Rather than protecting them, such new administrative burden would weaken SMEs.

The cost of complying with the proposed disclosure would be around €30,000 per year – a very significant outlay for SMEs. The compliance costs and excessive capital requirements of this Directive will also have a major impact on venture capital firms themselves, and will radically reduce their ability to back SMEs in the future, while increasing the barriers to entry for new venture capital funders to emerge. This is an outcome at direct odds with numerous Commission financed initiatives to promote venture capital.

Much of the chatter around this Directive has focused on the impact on hedge funds, but it is a big mistake to think that the AIFMD’s impact will be restricted to companies trading in arcane financial instruments. This is about the real economy, and these proposals will directly affect tens of thousands of companies across every sector, from fashion to photovoltaics, and from sandwich making to waste recycling.

Innovative businesses will be central to Europe’s recovery and sustainable economic growth. We urge policymakers to ensure all companies are treated fairly, to recognise the fragility of high potential businesses during certain phases of their development, and to ensure that the AIFMD proposals take into account the vital role played by private equity and venture capital in this process.

Yours sincerely,

Tom B. van Aken, Avantium Technologies B.V., The Netherlands



Altin Saliasi, Landeslease Sh.A, Albania

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