From Deposits to Deals: Why the EU’s Capital Markets Push Matters for Venture

by David Cruz e Silva, an operator turned angel LP and founder of eu.vc

At EUVC, we exist to champion the European venture community - founders, investors, and capital allocators building the future of our continent. That means paying close attention not just to tech or VC trends, but to the broader capital flow dynamics shaping the environment we all operate in.

And lately, something big is brewing in Brussels.

You might’ve seen the headlines: “EU to launch a new investment account to get families into the stock market.”

Sounds like a public markets story, right?

But step back, zoom out, and you’ll see what this really is:

🚨 A foundational move to restructure how capital flows through Europe - and if it works, venture stands to benefit massively.

🧱 A Capital Market Flywheel in Motion

This policy isn’t standalone. It’s part of a larger strategic framework - the Savings and Investments Union (SIU) - a bold plan by the European Commission, led by fellow Portuguese Commissioner Maria Luís Albuquerque, to mobilize Europe’s dormant capital and close its investment gap.

Here’s the core issue:

🇪🇺 European households hold over €10 trillion in savings in low-yield bank deposits To meet its strategic goals, according to the Draghi report, Europe needs to invest an additional €750 - 800 billion every year

This mismatch is not a funding problem - it’s a market maturity problem.

And the SIU is the Commission’s answer.

🧠 What’s the EU doing?

The EU is launching a European investment account designed to:

• Encourage households to invest, not just save

• Offer tax advantages to sweeten the deal

• Be rolled out across the bloc by Q4 2025, with standardised rules and access

But that’s just the front door.

Behind it, the Commission is also working on:

• Simplified due diligence and transparency rules for financial institutions (Q2 2025)

• Cross-border fund distribution reform, unlocking smoother LP–GP interactions (Q4 2025)

• A plan to address one of the biggest pain points in private markets: exit friction, with new secondary liquidity mechanisms planned by Q3 2026

Add to that:

• A proposal to give ESMA (Europe’s SEC) a stronger supervisory role over large market players

• And potential regulatory flexibility for banks to allocate capital to equities—including venture and growth-stage companies

This is not tinkering.

💡This is infrastructure work on how we build, allocate, and compound capital in Europe.

🚀 Why This Matters for VC (and Why You Should Care)

This is where it gets exciting for our community.

The SIU directly references venture capital and private equity as essential asset classes that need more attention, more accessibility, and more capital.

Here’s what this strategy unlocks:

1. 💸 A new pool of LP capital - from Europe’s own citizens

As households transition from savers to investors, demand for higher returns will grow.

Platforms like Moonfare, Titanbay, and feeder vehicles already offer access to venture funds (read about how we do it). With the right tax and compliance rails, this could scale.

The EU is actively shaping the conditions for retail participation in venture

2. 📡 Cross-border fundraising could get easier

Fragmented regulation has always been a drag on scaling European funds.

SIU proposes legislative changes to remove fund distribution barriers and harmonize supervision.

That means less friction, more efficiency, and broader access to LPs across borders.

Emerging managers and pan-European platforms will be the biggest winners here.

3. 🏦 New institutional capital channels are forming

Banks and insurers may soon receive favourable capital treatment for investing in equities, including private markets.

The EIB already deployed €8 billion in equity last year, helping mobilize over €110 billion for startups and scale-ups.

If these regulatory shifts materialize, expect more hybrid structures, FoFs, and VC-adjacent activity from traditional institutions

4. 🔄 Venture exits might finally have a path forward

We all know that exit optionality is one of the biggest bottlenecks in European venture.

The SIU recognises this - and is working on mechanisms for multilateral intermittent trading of private shares, offering GPs and LPs better liquidity options.

This could be a structural unlock for LPs hesitant to commit long-term to illiquid funds.

🧬 A Systemic Shift Worth Tracking

At EUVC, we believe that Europe’s ability to compete globally depends, among other things, on building a truly European capital market - one that doesn’t just support founders, but enables them to raise, grow, and exit in their own backyard. It’s not about mindset or risk appetite, that’s anti-Europe propaganda. It’s about having a capital flywheel in place. And this starts with infrastructure work. It starts with how we build, allocate, and compound capital in Europe.

The SIU may not make headlines like a mega-fundraise or unicorn IPO.

But if you care about capital formation, LP diversification and fund sustainability—it might be the most important structural shift we’ve seen in years.

So yes, this started with a proposal for a retail investment account.

But read between the lines and you’ll see a far more powerful story:

🇪🇺 Europe isn’t just moving money. It’s building a flywheel.

We’re always looking to amplify great thought leadership. If you’ve got it, send it to patricia@eu.vc.