This article is a part of Poland Unpacked. Weekly intelligence for decision-makers
PFR Ventures is revamping three venture capital support programs, increasing their flexibility and aligning them with global market trends. The overarching objective remains unchanged: to channel capital more effectively into innovative startups.
“We have adjusted our strategy to current market conditions. As a result, we will bring new groups of fund managers into the ecosystem and make it easier to attract investors,” said Rozalia Urbanek, acting CEO of PFR Ventures.
The changes cover three programs financed with EU funds under the European Funds for a Modern Economy framework: PFR Biznest, Open Innovations, and CVC. According to PFR Ventures, the adjustments are the outcome of consultations with market participants. They were introduced in agreement with Bank Gospodarstwa Krajowego and the Ministry of Funds and Regional Policy.
“The VC market is changing. On the one hand, Polish management teams are becoming more professional; on the other, an increasing number of foreign funds are investing in domestic companies. As a result, the rules governing public financing programs must also be adapted to the new reality,” said Piotr Kędra, investment director at PFR Ventures.
PFR Ventures makes its programs more flexible
After years of building relationships abroad and expanding international networks, domestic funds are increasingly willing to invest in foreign startups. Polish tech entrepreneurs are also more frequently incorporating companies outside the country, while keeping parts of their operations – such as technological infrastructure – in Poland. It is no secret that successful overseas deals can deliver higher returns for funds.
Until now, public programs have been focused primarily on strengthening the domestic ecosystem, which has limited the ability to invest outside Poland. PFR Ventures is now increasing the permissible share of foreign investments for funds.
Higher foreign investment limit in the CVC program
PFR Ventures has revised its geographic strategy in the PFR CVC program, which supports the development of corporate venture capital funds. The new framework was developed in consultation with corporate investors, which provide nearly half of the program’s capital. As a result, the cap on the value of foreign investments has been raised from 15% to 40% of the investment budget.
“There are still relatively few corporate funds in Poland. CVC vehicles are typically specialized in specific sectors, so they need visibility into technological developments in their industries not only in Poland but also abroad. From their perspective, exposure to the technology sector outside the country is as important as domestic exposure. That is why raising the foreign investment limit was so important to them. We expect the change to increase corporate interest in setting up CVC funds, including in cooperation with us,” said Piotr Kędra.
Investor's perspective
The VC market in Poland is searching for new operating models
From my own experience, I know that PFR Ventures’ managers listen to the market and regularly implement changes, although formally these processes can be lengthy. When we were building the second fund under the Inovo group, the terms of public financing were not attractive for us. However, the rules were eventually changed, and for our third fund we invited PFR Ventures to join our group of investors.
Today, a major challenge for the Polish VC market is that domestic founders often incorporate companies abroad – particularly in Delaware – right from the start. These are frequently highly attractive startups from an investor’s perspective, but they remain out of reach for funds relying on public capital. For example, an early-stage investment in ElevenLabs was formally impossible for most Polish funds. Today, however, the company is a decacorn valued at over USD 10 billion.
Many investment teams also point out that, in the case of smaller funds, the management fee – given formal requirements regarding staffing levels – is no longer sufficient. As a result, it is becoming increasingly difficult to assemble a budget that allows for effective fund management.
Changes in the PFR Open Innovations program
The cap on foreign investment value – from 15% to 40% - has also been increased under the PFR Ventures Open Innovations program. It is aimed at teams seeking to manage venture capital funds investing in technology projects with a strong R&D component. The change is intended to reflect market realities, where many valuable projects are being created outside Poland, often with the involvement of Polish founders and researchers.
“To clarify, within the Open Innovations program we are introducing two pillars. The first will continue to operate under existing rules, with a 15% cap on investments in foreign companies conducting business activity in Poland as part of the investment budget. The second pillar will cover an additional 25%, provided that the foreign companies have a Polish founder or founders collectively holding at least 20% equity in a startup incorporated outside Poland,” explained Piotr Kędra.
He added that the aim is to better address a segment of the market that has expanded significantly over the past three years.
“A group of technology companies has emerged that are founded from the outset – under various ownership structures – abroad, even though a significant part of their operations remains located in Poland. Until now, for formal reasons, these companies have more often sought foreign investors, without participation from domestic VC funds,” he said.
According to Borys Musielak, founder of Smok Ventures and initiator of the Smok Angels business angel network, this is a very positive change. It is particularly important that it may apply not only to companies registered in Europe, but also outside it, for example in Delaware.
“The best founders from around the world, including Poland, are now setting up C Corporations and expecting initial investments in the form of YC SAFE agreements. Until now, funds backed by European money distributed by PFR Ventures had no ability to invest in such structures. This significantly limited their ability to participate in top-tier companies,” said Mr. Musielak.
In addition, the Open Innovations program has now been more strongly oriented toward managers investing in the deep tech sector.
New rules for managing Biznest funds
Another change concerns the PFR Ventures PFR Biznest program, specifically the model under which a fund may be managed.
“In EU-backed support programs, we expect fund management teams to consist of at least two people. This is a safeguard against unforeseen events or other factors that could cause one person to leave the business. In such a case, the second partner can rebuild the team, significantly reducing the risk of the fund being shut down. Until now, we required that at least two people be fully dedicated to running the fund. We are now relaxing this rule and allowing only one of them to work on the fund on a full-time basis. Larger teams will still be an advantage in selection processes,” said Piotr Kędra.
PFR Ventures expects that a team member more loosely connected to the fund – through their primary professional activity or business – will be able to generate additional synergies for its operations.
“An even more important change in the Biznest program is enabling fund management by organizations that already bring together and cooperate with business angels, such as clubs or associations,” he added.
What do global VC fund management trends look like today? According to Borys Musielak, the number of single-GP funds is increasing worldwide.
“They operate faster. They do not require an investment committee, and a startup can receive a decision almost immediately. Thanks to automation and the use of AI agents, such funds can be as effective as structures managed by larger teams,” he said.
Polish innovation remains the priority
In recent months, PFR Ventures has expanded the PFR Starter program, which supports early-stage investments, by adding a Science module. Its aim is to encourage fund management teams to invest in projects originating in the scientific community. The new component is designed to support capital allocation into science-driven ventures through additional incentive mechanisms. Managers who make such investments will benefit from an asymmetric profit-sharing structure upon exit – PFR Ventures will forgo its share in favor of private investors and the fund management team.
As representatives of the institution emphasize, despite ongoing program adjustments, the core objective remains unchanged.
“The baseline assumptions remain the same: capital is ultimately meant to flow into innovative Polish startups,” said Rozalia Urbanek, acting CEO of PFR Ventures.
PFR Ventures has announced that the next funding round will open on May 25, 2026. It will cover all programs and remain open until June 14, 2026.
Good to know
VC funds portfolio under the FENG program
PFR Ventures currently supports 19 venture capital funds financed under the European Funds for a Modern Economy (FENG) program. The total capital allocated to these funds amounts to PLN 1.5 billion (approx. EUR 0.35 billion), of which around PLN 500 million (approx. EUR 0.12 billion) comes from private sources contributed by more than 300 investors. The funds have already completed more than 40 investments in portfolio companies.
Across the PFR Starter, Biznest, Open Innovations, KOFFI, and CVC programs, roughly PLN 1 billion (approx. EUR 0.23 billion) remains to be deployed. Nearly half of this amount has already been reserved for funds whose applications are currently under review by PFR Ventures.
On taxes and private investors
PFR Ventures’s Piotr Kędra acknowledges that there is still room for improvement and strengthening in areas that relate more broadly to how the venture capital financing ecosystem functions, rather than to the programs themselves. These issues are also being raised by market participants.
“One such proposal we are working on is the elimination of double taxation for investment vehicles. This issue has been only partially addressed through the ASI tax relief; however, there is a requirement that an Alternative Investment Company holds at least a 5% stake in a given startup for at least two years. In practice, there are differing interpretations of this rule, which undermines legal certainty. The second key postulate is to increase the number of private investors, particularly institutional ones. Within the broader administrative framework, we are trying to adapt our activities to these needs, among others through initiatives such as Innovate Poland or Future Tech Poland,” said Piotr Kędra.
Key Takeaways
- More flexible rules in the business angel program. The Biznest program rules have also been revised to make fund management more flexible and to ease requirements imposed on teams. New cooperation models are now permitted, including greater involvement of organizations bringing together business angels. The changes are designed to strengthen Poland’s VC ecosystem and better reflect its ongoing development.
- Adapting programs to the international VC market. PFR Ventures is introducing changes to three VC support programs, aligning them with current market conditions. The institution is prioritizing greater flexibility and closer alignment with global investment trends. The aim of the reforms is to channel capital more effectively into innovative startups, including those outside Poland.
- Higher limits on foreign investment. The most significant change is a substantial increase in foreign investment caps in the CVC and Open Innovations programs – from 15% to 40%. This is intended to give funds greater operational freedom and access to a broader technology market. The decision reflects the growing globalization of venture capital and the need to invest in projects also created outside Poland.