Tax Incentives in Catalyzing Informal Venture Capital Investments (in Finnish with English abstract and summary)

Maula Markku

Various approaches have been considered in Finland to catalyze new growth oriented innovative companies and to develop the functioning of the risk capital market. One approach suggested in several studies and public statements has been to consider creating tax incentives to catalyze informal venture capital investments. The purpose of this paper is to review existing research knowledge and international experiences on the use of tax incentives to catalyze informal venture capital. Based on current (still quite limited) research and experiences from many countries, well designed and targeted tax incentives can be assessed to have an important role in catalyzing informal venture capital investments. Tax incentives could improve the supply of risk capital needed in growth oriented young innovative companies and they could also strengthen the domestic ownership of Finnish companies. Furthermore, adoption of tax incentives to catalyze informal venture capital would also be seen as a clear and credible signal of positive change in the Government’s attitude towards growth-oriented entrepreneurship and thereby improve the entrepreneurship culture in Finland.

Publication info

Discussion Papers no. 1068
verokannustimet, pääomasijoitustoiminta, yrittäjyys
tax incentives, venture capital, entrepreneurship
10 €
Availability of print version