CIDEM Business Angels Program

Barcelona, febrer de 2007

Club d’Inversors

CIDEM is an autonomous body of the Catalan Government's Ministry of Employment and Industry aimed to improve Catalonia's industrial community and increase its competitiveness in the face of different challenges.

CIDEM designs and carries out the measures of the Industrial Policy of the Government of Catalonia.

CIDEM’s Financing Area offered BAN services from 2001 until2004.

In 2005, CIDEM launched the BAN program that consists of 12 networks, 9 of them already operative. 36 deals have been closedfor an amount of 9.710.000.

Introduction to CIDEM

������� ��� ��������������� ���������

���

���

�����

��������� �� ���� !

��������������

��������� ���

���

������

�������

�����

�������

"��� "����#�� �$����

�������������������

������

%����"�� �&��

���'("�� �&��

�������

����

���

The Program’s main aim is to offer entrepreneurs access to finance and necessary know how to develop their companies. At the moment the program includes 7 BANs, and related activities such as investors academies, investment readinessprogrammes, monthly investors meetings and the annual CIDEM Investors Forum.

At the moment the catalan BANs count with 350 active investors with a investment capacity considered over 40 milions €.

The BA Networks are necessary structures but hardly sustainable while the numbersthat the Catalan informal market of business angels offers continue being weak. Thecountries with better results in company creation and growth seem to have a formidable presence of Business Angels in their financial chain. Those countries created tax incentives to encourage the BA activities.

The BANs belonging to CIDEM Program are autonomous bodies, with their ownorganization. Each BAN, starting with a code of conduct proposed by CIDEM and inspired by EBAN, designs and offers a product and services portfolio willing to increase the entrepreneurs success options. In the program comercial bans, createdand managed by private investors, coexist with networks linked to business schoolswich are seeking for providing quality resources to their student’s new ventures.

CIDEM BA Networks Program

1 enquesta realitzada posteriorment a les empreses participants, amb 39 respostes sobre 71 enquestes lliurades

CIDEM BANs 2006

Number of projects: 241

Investors at 31/12/06: 377

Companies submitted to investors: 95

Investment Forums: 23

Deals / Deals in process: 12 / 35

Total invested in closed deals: 2.285.000 €

BA Academies: 3 courses of 25 h, 115 attendants.

XIIè Fòrum d’Inversió CIDEM: 600 attendants, 128 companies, over than 8.000 copies of the Project’s Book.

Catalan Business Angel Networks

The major part of the networks have decided to celebrate periodic investor forums as the way of performance, where the entrepreneurs previously selected show up their project in front of a group of investors. IESE, BANC, XARXAP and BCN BA organize Investors Forum or investor-company meetings periodically, and actually have a large range of closed deals. AIJEC, ESADE and UNIBA, organize Investor Forums since4Q 2006.

All the networks have their own web which includes information about the services they provide, and theforums and other activities organized.

Situation

On september 2006 Xarxa UNIBA was created as a result of the merge of 4 CIDEM BANs: Club d’Inversors La Salle, Xarxa BAXI (UPC), Esfera UAB Inversors i XIP Girona (UdG), all of them belonging to catalanuniversities. UNIBA also counts with the sponsorship of La Caixa, 22@ and the BarcelonaChamber of Commerce.

Novembre 2006: XII edition of CIDEM Investment Forum. The catalan networks participated as a partners of the event, as well as more of 40 venture capital firms and the direct sponsorship of La Caixa, Deloitte, Garrigues, 22@ and ICF. The event included the presentation of 130 companies to investors, investment readiness programmes, an edition of 8.000 copies of the book containing all the executive summaries of all companies and the attendance of 600 inversors.

Situation

Monthly meetings betweenbusiness angels, Venture Capital Managers and advisors. TheInvestment & EntrepreneurshipBreakfast have became the most important meeting point in Barcelona between professionals of corporate.

Situation

The Business Angels Academies offer formation about the investement performance in unlisted companies. The main goal of this courses is to capture the interest of new angels and to aproximate them to the directinvestment . In the last 4 mounths we have celebrated 3 BA Schools, in colaboration with ESADE, IESE andEUNCET with 115 attendants. Since 2004: 9 courses with more than 250 attendants.

CIDEM support to BANs in 2007

Using simple contractual models, linked to the right development of a network, hich include simple milestones easy to validate.

Associate the funding of the BAN completely to the achieve of the agreed goals (contracts 100% variables).

The main objective of a Ban is to close deals. Therefore is necessary to associate the major part of CIDEM resources to this aim. The rest of money goes to improve other operational sides (Investment Forums, Investment Readiness).

When the goals are decided, and the related contracts designed, the BANs are free to define their services and organizational chart .

CIDEM proposes a 2007 funding pattern formed by two contracts. The first one, grants related to the closing of deals where the funding depends on the number of deals and the amount invested. The second, where the funding is recived by the BAN to reach other goals.

We propose the same contract to all the catalan BANs, regarding to a normal sized BAN:

50 investors.Closing of 3-5 deals per year.200.000 € average deal ammount.40 projects / BP subbmited to investors.

Summary

• Success fee of 5% on the amount of BA funding.

• Minimum amount for operation of € 30.000 disbursed.

• CIDEM’s maximum contribution of € 10.000 per company, in case of strategic sectors, and 5.000 € in other cases.

• The maximum contribution in that scheme will be of € 30.000 in 2007.

• The deal doesn’t have to belong to real state and financial.

Closed deals

Sponsorship related to the achieve of some “volunteer” milestones.

Every BAN achieve 20.000 € by:

Number of projects submitted to the BAN investor forum or BA intranet.

Investor Forums taken place.

Marketing actions.

Projects submitted to the XIII CIDEM Investor Forum (july 07).

Catalan Business Angel Survey.

Publication of success cases.

Sponsorship

Sustainability of the BANs Diversification of funding sources.

Personality of the Program Increase the weight of the BANs in the decission making process.

Unfriendly environment Design of quality coinvestment tools.

Lack of knowledge Formation to BA, investment readiness programmes, improve the managing of the BANs

Dificulties and challenges