Tartu: A fund manager in Estonia raising twenty million euros for early-stage software companies can market across the European Union under a single passport. In practice most do not use it. The European Venture Capital Fund regulation created that passport in 2013, and the Commission is now revising it for the third time, with adoption planned for this quarter.
The review opened on 15 January 2026. Targeted and public consultations closed on 12 March, and the responses share a common complaint. The passport works legally and fails commercially, because the thresholds, reporting duties and investor eligibility rules attached to it make the framework unattractive to the managers it was designed for. Larger funds simply authorise under the alternative investment fund managers directive instead and ignore the venture label altogether.
Scale explains much of the problem. European venture funds are smaller than American equivalents at every stage, and the gap widens sharply at growth rounds, where companies that raised successfully in Europe cross the Atlantic to find later capital. The Commission has attached the EuVECA review to that diagnosis, consulting not only on fund manager operating conditions but on access to finance for innovative companies more broadly. Its consultation announcement sits here.
Officials have signalled the initiative may reach beyond the existing regulation to cover growth capital managers who fall outside the venture definition entirely. That would mark a real change of scope rather than another round of threshold adjustment. It would also drag the file into the broader savings and investments union agenda, where the Commission is simultaneously pushing savings and investment accounts, pension reform and financial literacy measures intended to route household deposits toward capital markets.
Investor protection groups have pushed back. Finance Watch and others argue that widening retail access to illiquid venture exposures transfers risk to people poorly placed to price it, and that the failure rate in early-stage investing is not a detail disclosure documents fix. Industry bodies counter that the sophisticated investor threshold excludes people who understand the risk and simply lack the balance sheet a rule written in 2013 assumed.
The institutional side gets less attention and probably matters more. European pension funds and insurers allocate a far smaller share of assets to venture than their American counterparts, partly through prudential capital treatment and partly through mandate design. A passport reform does not touch either. Parliament’s legislative train tracks the file here.
Existing instruments show the limits. The European long-term investment fund framework, InvestEU, the European tech champions initiative and the European Innovation Council all channel money toward the same gap, and the gap persists. That pattern suggests the constraint lies in exit markets and institutional allocation rather than in fund vehicle design, which is precisely the argument the Commission will face when the proposal lands.
