CVX in Børsen: Liberal Alliance wants to close down EIFO – but is it the right solution?

By Mikkel Fruergaard, CEO of CVX Ventures

(The debate post was published in the Danish newspaper Børsen d. February 21, 2024)

The spotlight is now on the Danish political party Liberal Alliance due to rising polls. These days, it is being highlighted that the party wants to close down the Danish Export and Investment Fund (Eifo).

At CVX Ventures, we welcome this debate as it touches on fundamental questions about how we create the best possible environment for entrepreneurship in Denmark.

It has been an important part of the effort to create a strong ecosystem for entrepreneurship and business development in Denmark.

A dynamic business community requires a wide range of support options for startups and growth companies. Here, Eifo plays a key role by providing capital and support to Danish companies with potential for international growth and innovation.

There is no doubt that private investment is crucial for the development of healthy and sustainable businesses. It is essential that investors who invest their own funds both benefit from the successes and bear the risks of their investments. This direct link between risk and reward is a fundamental principle of a market-driven economy.

However, it is worth considering that certain innovative projects and technologies, especially in the early stages, may experience difficulties in attracting private capital due to high risk or long-term development horizons.

In these cases, public investment funds like Eifo can offer a source of funding that enables development and growth that would otherwise not take place. These investments can help ensure that Denmark remains at the forefront of technology and innovation, which benefits society as a whole.

Valid concerns

However, Liberal Alliance’s concerns about potential inefficiencies and misspending of public funds are valid and require careful consideration.

Because it is of course problematic if government investments are made on a careless or uninformed basis, leading to losses that ultimately affect taxpayers.

Every investment decision, public or private, carries risk, but it’s important that public funds like Eifo are run by experts with in-depth industry and market knowledge to minimize risk and ensure the best possible decisions.

We need to find a balance where public funds complement the private investment market, not compete with it. Only by combining the best of both worlds can we ensure that Danish entrepreneurship and innovation continue to flourish.

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