Fintechs as eligible investments in the Law 18/2022 of 28 September on the creation and growth of companies (also known as “Create and Grow Law”)

Fintechs as eligible investments in the Law 18/2022 of 28 September on the creation and growth of companies (also known as “Create and Grow Law”)

Abstract:

This article aims at addressing the novelty introduced by Law 18/2022 of 28 September
on the creation and growth of companies (also known as the “Create and Grow Law”),
which expressly includes investment in Fintech companies as the main purpose of venture capital. This novelty leads us to address the concept of Fintech as an “eligible investment” from the perspective of its concept (financial entities whose activity is mainly based on the application of technology to new business models, applications, processes or products) and the main - if not entry barriers - considerations that the venture capital industry must take into account when considering investment strategies and opting for one type of Fintech or another. In particular, I will refer to the regulatory and supervisory aspects specific to each “vertical” or group of operators or entrepreneurs that have developed initiatives within the Fintech sector. Lastly, I have
considered it interesting to include some of the new features recently introduced by Law 28/2022 of 21 December on the promotion of the start-up ecosystem (“start-up law”), which may provide a boost for Spain to position itself in the European Fintech ecosystem. In this regard, a new regulation is introduced for socalled carried interest, i.e. income directly or indirectly obtained by the directors, employees or managers of closed-end alternative investment entities and funds (listed in the Law itself, including venture capital entities and funds) or their managers, from units, shares or other rights, including success fees, which confer special rights over the aforementioned
closed-end collective investment entities or funds (or their managing entities or entities of their group).

Keywords: Palabras clave: Fintech, capital riesgo, “ley crea y crece”, “ley de start ups”.