4th ESTER Meeting

Tel-Aviv, 12-14 January 2005

Astrid Severin

Innovation Policy Unit

Overview

• Business Angel Networks in Europe• PAXIS transfer of experience• Gate2GRowth InvestorNet• ERDF funding scheme in Ireland• Future set-up

The equity gap

Stage

€ 1 mill

Growth

Capitalneeds

€ 80 K

Seed/Start up SME Large Company

(Pre-) Seed Funds /Business Angels

Own equity (FFF)

Venture Capital

Listing on a stock exchange

Business Angel Networks (BANs)

• Business Angels - private individuals investing part of their personal assets in a start-up and sharing personal business management experience with the entrepreneur

• The concept first developed in the US-in Silicon Valley, California

• European networks first appeared in the UK, the Netherlands, Finland, Belgium, Germany, France and Italy

• Australia is also home to intense informal venture capital activity (www.businessangels.com.au)

BAN set-up

• Business Angel Networks (BAN) - organisations aiming to facilitate the matching of entrepreneurs with business angels (neutral, no evaluation of business plans or angels)

• Most EU BANs legally set-up as private firms, non-profit organisations or possibly foundations in collaboration with banks, incubators, Chambers of Commerce or Regional Development Agencies

• ERDF eligible regions have possibility of leveraging EU funds to co-finance BANs (LINC Scotland has been receiving ERDF subsidies from this channel)

Evolution of BANS 1999-2004

66

132

154 176196

282

0

50

100

150

200

250

300

1999 2000 2001 2002 2003 2004

Source EBAN 2004

Evolution of BANs

• No of BANs has strongly evolved• In 2003, EBAN identified 196 networks

and by mid-2004, 282 European networks– Germany from 1 to40, Spain from 0 to 11, UK

from 49 to 101– Israel from 0 to 2– Czech Republic 2, Hungary 1, Poland 1, Malta

1, Slovenia 1, Russia 4…

PAXIS Business Angel Networks

• HIGHEST - Networking between incubators and Business Angels

• KREO - Creation of BANs in Karlsruhe and Lyon (2001-2002)

• PANEL - Munich Business Angels• SPRING - Creation of Business Angel Forum

Region Stuttgart e.V. and initiation of a Business Angel Network Madrid

• START - Business Angel Network Management (Veneto)

UK - The environment

– 1998 The University Challenge Fund (£60.0m for new projects and seed capital for new spinouts)

– 2000 Higher Education Reach Out (£83.0m over three years to encourage academic spin-outs)

– 2001 Public Sector Research Exploitation (£25.0m to fund commercialisation of new technologies)

– 2002 Higher Education Innovation Fund (£77m over three years to encourage academic spin-outs)

The Oxfordshire Investment Opportunity Network (OION)

• Established in 1994 as part of Oxford Innovation• Linking early stage, high growth potential

companies with investors• Technology- and Oxford-based, monthly mtgs• 120 + Active Investors: Individuals (syndicates),

VCTs (Seed Capital), VCs (3i, MTI), Corporate investors (GSK, Unilever)

Transferring best practices

– OION model presented and discussed during SPRING / KREO workshop on early stage financing

– Business Angel Forum Region Stuttgart established

– Both models basis for BAN Madrid area (project started in July 2004)

– Cambridge BAN tools presented and transferred to in Stuttgart (2004)

PAXIS – Transfer of excellence

• Transfer examples– Concept for creation of Business Angel

Networks– Co-incubation of start-ups in biotechnology

incubators– Euro-Office initiative supporting the

internationalisation of SMEs– Combination and transfer of successful

technology platform models (biotechnology, genomics, diagnostics)

Gate2Growth

• Networks and services for entrepreneurs (Business Matching), investors (InvestorNet), technology incubator managers (IncubatorForum), industrial liaison and IPR managers (ProTon Europe) and academia (Academic Network)

• www.gate2growth.com

InvestorNet

• Enhancing the capacity of European early-stage venture capital operators to invest in innovative companies– Acceleration of EU cross-border contact and

communication– Provision of central points for accumulation of

knowledge– Cross-border networks of support

organisations and ‘project generators’ (universities, science parks, incubators)

InvestorNet

• Lessons learnt– Round table meetings enable personal contact

within specific sectors but across borders– Investors are still find hard to find high quality

investment opportunities– Investors main concern is exit possibility– Very difficult to identify potential investor

members from new members states as technology focussed VC industry is underdeveloped

InvestorNet Round Table Meetings 2005

• ICT and Design March 2005London• Medical Devices April 14th-15th 2005Berlin• Energy Technology June 2005Scotland• Nutrition and Food technology July

2005Italy/Belgium• Biotechnology September, 2005Copenhagen• E-Content, E-Commerce and Media October,

2005tbd

Financing and the ERDF

• The Irish Research Technology and Innovation (RTI) Competitive Grants Scheme

• National Development Plan 2000-2006 (Operational Programme for the Productive Sector)

• Scheme supports commercially focussed, industry-led projects in product and process development

• Co-funded by the ERDF; Managed by Enterprise Ireland

Objective of RTI in Ireland

• Helping companies to reach and exceed European and international norms for R&D investment

• Increase – No of companies performing effective R&D– No of companies doing R&D for the first time– Investment in R&D in Ireland– Quality and quantity of the R&D linkages between

companies and third level institutions and companies

Using the RTI Grant

• Process and product development projects for companies with expenditure up to 95,200 Euro

• Expenditure exclusive and essential to project (salaries, overheads, material for prototype tooling, travel, external consultancy incl. design) - 2 years

Assessment of applications

• Technical feasibility and innovative quality• Accuracy of project planning and costing• Technical capacity and track record of company

in R&D• Capacity to commercialise output of RTI results• Increase R&D capacity as result of project• Formal collaboration taking place (with other

comapneis, R&D institutions, etc)

More information: www.enterprise-ireland.com/rti

Future set-up

Coordination

Collection

Analysis

Exploitation of results

2 Mio Euro

Networking Innovation actors

1.2.1.4

Innovation&clusters

1.2.1.3

EUROPEAN INNOVATION PORTAL

Gate2Growth PAXIS

For more information

• www.cordis.lu/paxis• www.gate2growth.com• www.eban.org• www.enterprise-ireland.com/rti

alex.talacchi@cec.eu.int astrid.severin@cec.eu.int