Today we are going to talk about risk capital in Spain. The beginnings of risk capital in Spain are closely associated with the classical vision of “Venture Capital”, that is, associated with investments in newly created companies.
In Spain the pioneer in risk capital investments was the public sector
In Spain, paradoxically, the pioneer in risk capital investments was the public sector. These investments were born in the 1970s and were carried out with the objective of encouraging the country’s industrialization process and thereby transforming certain regional economies from the primary sector (agriculture, livestock and fishing) towards the secondary sector.
After the implementation of a normative legal framework in the 1980s, private companies begin to be interested in the risk capital industry. It is at this time where the figure of the SGCER (Risk Capital Management Society) is born. Through this figure, the investment and delegated management instead of its own resources was promoted that was the formula used until then.
Capital attraction and its impulse arise more strongly when Spain enters the European Union. The risk capital investments focused on companies in expansion or consolidation phase were gaining weight, while the investments associated with newly created companies were losing it. The latter were monopolized mainly by the public initiative.
During the 90s and with the Internet boom and new technology companies, the type of investment was turned, since companies dedicated to risk capital investments bet on “start-up” or companies in the initial phase developmental. The activity roughly rebounded from 1997 to the bubble puncture in 2000, to later go back the following 2 years.
During the years 2003 and 2007 there was an important increase in the number of operations. On the other hand, the 2009 crisis contributed both to the reduction of the number of operations and their volumes.
It seems that industry’s prospects begin to glimpse positive signs. First of all for the recovery in the economic indicators that Spain is registering since 2014 as well as the progressive restoration of investors’ confidence in our country. This is binding that the credit market seems to start opening again and, in addition, in an environment of especially low interest rates, which favor the total or partial leverage of this type of operations.
All these circumstances constitute positive elements for a new bonanza period in the risk capital sector in Spain.
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Shuttle, one of the most famous startup accelerators in Spain. – Levante
