Coronavirus – BVCA Update

OVERVIEW

The rapid escalation of the Coronavirus (COVID-19) poses questions and creates unprecedented situations in both our personal and professional lives. As the voice of the private equity and venture capital industry in Bulgaria, BVCA continues to work closely with its members and partners to address this via philanthropic efforts, industry advocacy and support to its portfolio companies.

BVCA sets a priority to follow the measures by the Government in protecting the public well-being, while ensuring remote work continuity. Physical conferences, such as the RE:TURN roadshow, policy seminars and networking events are currently postponed. Board meetings are held remotely to ensure a continued workflow. BVCA participates in conference calls with national associations and partner organisations in Europe to support each other’s efforts in tackling the situation and addressing the challenges for our industry.

PHILANTROPY

Together with our partner organisation, the America for Bulgaria Foundation, we encourage any philanthropic efforts during that time. After a careful research, we outlined two proposals for urgent measures in the crisis:

  • Support for hospitals in Bulgaria;
  • Delivery services for elderly and people with disabilities.

As the Foundation leads by example, on 18 March 2020 they donated BGN 300,000 to two hospitals in Bulgaria. Should you wish to join this movement, drop us a line at office@bvca.bg.

POLICY

Over the past few days, several Member States have taken strong initiatives at national level to protect their SMEs and start-ups and give them the necessary breath to operate under the difficult conditions ahead. This includes, among others, measures on delaying administrative obligations, tax payments, including VAT, and, most importantly, measures to support employment. These actions will be especially vital for businesses such as start-ups where cash flows are limited or negative.

Whilst acknowledging that some of these policies, in particular tax, are primarily national issues, we encouraged the European Commission to take leadership, in line with the Treaties, in coordinating some of these proposals and to set clear benchmarks and swiftly give recommendations for the most efficient practices across Member States.

In sum, we encouraged the following actions:

  • Setting benchmarks and addressing recommendations to Member States to develop the most efficient practices to support businesses, particularly start-ups, over the short term;
  • Ensuring full flexibility of existing state aid rules for companies backed by private equity and venture capital firms;
  • Taking all necessary steps to provide liquidity and to stabilise markets, for example through the use of existing EU funds;
  • Continuing to provide support to venture funds, and the companies they invest in, through the existing EU public programmes and the EIF;
  • Taking into consideration the current situation before introducing new proposals, in particular those that could affect the financing of SMEs and reversely with the outmost haste promote those proposals, that could facilitate further investments in SMEs and start-ups.

RESOURCES

Our members are addressing a variety of issues related to the Coronavirus escalation with useful public resources and dedicated web pages. We share some of the initiatives below.

Endeavor Bulgaria created a COVID-19 Data Room Crisis Response. The database of resources consists of a variety of sections: Facts and insights; General health; Capital raising during crisis; Coworking remotely; Endeavor entrepreneurs. Read more.

Kinstellar has established a firm-wide COVID-19 Legal Task Force with dedicated legal experts from across relevant sectors, and a dedicated Legal Response Hotline service. To further help you mitigate the impact of the pandemic on your business, Kinstellar has created this special online COVID-19 Resource Hub where you can find relevant insights, podcasts, webinars and other content focusing on important legal and strategy issues related to the COVID-19 crisis situation. Read more.

EY Bulgaria has set up a “Responding to COVID-19” page to help you navigate through the disruption caused. You can find relevant and up-to-date insights on responding to volatility and building enterprise resilience. Read more.

New Balkan Law Office issued a publication on how to resolve a dispute during a COVID-19 emergency. Read more about the arbitration options in Bulgaria or abroad.

Please suggest adding more useful resources to our list by dropping us a line at office@bvca.bg.