New Law 22/2014, published on November 12th, regulates venture capital entities, and allows fundraising and participations in companies, via capital and via finance, to help improve the management of enterprises.
Four stages in venture capital are distinguished:
- Initial stage, development of the Idea, as seed capital (venture capital).
- Launching stage of the productive activity, under the figure of a Start-up (venture capital).
- Stage of growth and expansion, to increase the competitiveness of the company (private equity).
- Final stage, where the company has already been through previous ones, and needs more financing (financial problems, entry in Stock Market, restructuring or company sale).
The Venture Capital Entities (VCE) can adopt the legal form of Venture Capital Company (VCC) or Venture Capital Fund (VCF).
The main purpose of VCE consists of the short-term equity holding of stocks coming from companies of other activities than real estate or finance, that in the moment of the taking out of shares are not listed in Stock Market or in any other equivalent regulated market within the European Union.
Venture Capital Companies are risk capital entities covering corporations, with a share capital subscribed of above 1.2M Euros;
They need to be managed through management companies, and have to comply with strict demands, as providing information on managers, administrators and shareholders, compliance of the activity program, information on adopted disposals on functions delegated or sub delegated to third parties, information about salary policies settled for top executives, investment strategies information, etc.
These companies are subject by supervision, inspection and sanctions regime under the Law 22/2014, in charge of CNMV (Stock Market National Commission.