Ln s israel annual conf 2011
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Transcript of Ln s israel annual conf 2011
L&S Venture Capital December 2011
confiden'al
Experience the Difference!
A Brief Look into Korea and Its Venture Capital Investments
confiden'al Few Stats on Korea • Pop. 49M, occupying 100K sq km • Member of G20 and OECD • 2010 export of $467B (7th) • 2010 GDP $1T (14th), $20,575 per
capita (26th)
Capable Workforce & Strong Export & Healthy Domestic Consumer Market!
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79%
64%
57%
48%
38%
36%
56%
Korea
US
England
Japan
Switzerland
Germany
OECD Avg
OECD: % of High School Graduates Attending College
• Highest % entering college • 160K PhDs • 50.8M mobile phone subscribers • 77.8% with Internet Access • 18M registered automobiles
confiden'al Upward Momentum for Made-In-Korea K-pop and Korean movies and soap operas are entertaining people throughout the globe. This recent phenomena is enhancing “Korea” as a premium brand.
3
Biggest beneficiaries are Korean consumer goods and services providers, who now find it easier to conduct business overseas.
少女時代
confiden'al Korean VCs Manage More Among 100+ registered VCs, roughly 30 VCs are active and well.
4
Com
mitm
ents
($M
)
Source: Korea Venture Capital Association, Nov. 2011
$617 $599 $633 $813 $822 $876 $1,040 $1,283 $1,449 $1,017 $3,072
$3,537 $3,907 $4,325 $4,472 $4,504
$5,174 $6,010
$6,958
$7,740
412 430 424
400
350 332 336
366 393
409
0
50
100
150
200
250
300
350
400
450
500
$0
$2,000
$4,000
$6,000
$8,000
$10,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011.10 New Funds Created Funds Expired Funds Outstanding Number of Funds Outstanding
US
$1 :
1,10
0 K
rW
confiden'al
$1,440
$876 $1,040
$1,283 $1,449
$1,017
$0
$500
$1,000
$1,500
$2,000
2000 ~ 2006
2007 2008 2009 2010 2011
Current VC Funds by Vintage The vintage of currently outstanding VC funds suggest increasing investments in coming years.
5
US
$1 :
1,10
0 K
rW
Vintage
Tota
l Com
mitm
ents
($M
)
Source: Korea Venture Capital Association, Nov. 2011
In 2012
Out-of-Investment In-Investment
confiden'al The Anchor Korean government anchors (offers stability to) the VC industry.
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22.8%
12.1%
23.2%
13.5%
18.5%
3.6% 5.9%
0.4%
Government Agencies National Pension Financial Institutions Venture Capitals Corporations Ind Investors Foreign Investors Others
Source: Korea Venture Capital Association, Dec. 2010
confiden'al Special Vs. General Purpose Funds Most Korean VC funds have explicit investment criteria, which reflect the mandates of the participating government institutions and strategics.
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41.14%
11.14% 10.86%
9.14%
7.14%
3.72%
3.71% 3.14%
2.86%
2.57% 2.57% 1.71% 0.29% SME Invest Movies and TV Shows IT Incubation General Purpose Entertainment Media* Components M&A Overseas Invest Contents Patent Bio
Source: Korea Venture Capital Association, Nov. 2011
confiden'al VC Investments Are Up Following a short-lived decline after the recent crisis, VC investments increased to $1B by 2010 (China $5.4B).
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Inve
sted
Am
ount
($M
)
Source: Korea Venture Capital Association
$618 $631 $604
$757 $733
$992
$725
$867
$1,091 $1,035
$0
$200
$400
$600
$800
$1,000
$1,200
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011.10
US
$1 :
1,10
0 K
rW
confiden'al
28%
32%
23%
7%
5% 4%
0% 1% IT
Manufacturing
Contents
Life Science
Service/Education
Distribution
Material Recycle/Clean Energy Others
VC Investment Allocation Current VC investments reflect today’s revenue / export drivers.
9
Source: Korea Venture Capital Association, Nov. 2011
confiden'al VC Investment Allocation Korean VC investments are spread evenly among companies young and old.
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13%
15%
14%
12%
30%
16%
1 Year or Less Between 1 and 3 Years Between 3 and 5 Years Between 5 and 7 Years Between 7 and 14 Years 14 Years or More
Source: Korea Venture Capital Association, Nov. 2011
confiden'al VC Backed KOSDAQ IPOs Are Up The returns on local investments remain attractive for Korean VCs.
11
134
105
58
37
61
43 52
29 29 34
73
53
36 28
49
35 44
22 20 26
$2,177 $2,215
$1,383 $1,358
$2,851
$1,488
$1,882
$1,379
$1,938
$2,428
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
0
20
40
60
80
100
120
140
160
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Non-VC Backed IPO VC Backed IPO VC Backed IPO Market Cap*
Num
ber o
f IP
Os M
arket Cap ($M
)
Source: Korea Stock Exchange, Korea Venture Capital Association
US
$1 : 1,100 KrW
confiden'al Recap
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• Korea’s strong domestic and export market affords it a resilient economy • The accumulative sum of funds at Korean VCs’ disposal is increasing • The accumulative total investments made by Korean VCs is increasing • Korean VC investments are made primarily in Korea:
– Scarcity of overseas investment fund – High threshold for overseas investment mandated by participating
government agencies – Additional cost and inconvenience of investing in start-ups overseas – Viable return on local investments
confiden'al Collaborating with Korean SMEs Foreign start-ups looking to raise capital or pursue business in Korea should consider working with Korean SMEs for the following reasons: 1. Korean conglomerates’ preference for built-it-here solutions suggests, which
makes Korean SMEs the preferred suppliers 2. Korean SMEs are the key ingredients in Korea’s pursuit of New Economic
Growth Drivers. Qualified SMEs can access investment funds and grants dedicated to the acquiring and developing technologies needed for the pursuit of New Economic Growth Drivers
3. Korea installed investment programs and business development support programs to help SMEs expand beyond borders
4. The SMEs run on shorter chain-of-command, which allows them to make quick business decisions and be less averse to long-term investments
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confiden'al Where to Begin • Korea / Israel Inter-Governmental Collaboration Program – Our past two
administrations have been keen on facilitating across-the-border collaboration with Israel (i.e. KORIL RDF)
• Israeli Local VC - Having raised capital or won interest from a credible Israeli VC goes a long way. One of our biggest challenge in overseas investment is the additional cost and burden associated with the discovery and investment management
• Korean Conglomerate - Most Korean conglomerates maintain in-house corporate venture teams. Many of them conduct periodic searches in Israel for innovations. Be weary of business restrictions and lengthy investment process!
• Korean SME – Most successful collaborations between Korean companies and Israeli companies we observed were initiated by Koreans. Israeli companies should make information describing their innovations more accessible to Koreans
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confiden'al Inter-Governmental Collaboration Korea-Israel R&D Foundation (aka KORIL RDF) offers both the venue and grants for the partnership between Korean companies and Israeli companies.
15
Ministry of Knowledge Economy (MKE), Korea
Ministry of Industry, Trade & Labor
(MOITaL), Israel
A public, non-profit organization established in 2001 and financed fully by the governments of Korea and Israel in order to administer the joint R&D fund and
concurrent projects.
Israel Office Ms. Deborah Schabes Tel: 972-3-511-8183
Source: KORIL RDF
confiden'al Who We Are
We are a Korean government accredited private equity fund manager. • Established: October, 2006 • Founders: Mr. Dongshik Chang, Mr. Seongjin Joo • Main Offices: Seoul, Korea • Investment Focus:
– Early stage – Smart IT, green/clean tech, fusion tech, Contents
• Major Accolade 2010: Selected by Korea’s Small & Medium Business Administration as the Early Stage Investment Fund Manager
• Major Accolade 2011: Selected by Korea’s Ministry of Knowledge Economy as the first New Economic Growth Driver Fund Manager
16
confiden'al Our Competitive Advantages Our unique make-up affords us the benefits of a small firm (autonomy, agility, flexibility) without the drawbacks (thin knowledgebase, lack of experience, incomprehensive network).
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Knowledge-base
Network
Approach
• Corporate venturing • Investment management • Global business expansion
• Aggressive investment approach • Preference for leading deals • Willingness and ability to structure
complex deals
•
• First-Tier SMEs • Korean government institutions • Overseas business partners and
financial investors
confiden'al
Global Stars!
Produc:-‐za:on
Open Innova:on
What We Look For
We look to invest in Israeli innovators who can work with Korean SMEs. If our investment model works, we will create a fund specifically to invest in Israel.
Our Investment Model • Open Innovation – Start-ups with
desired innovations discovered with help from universities, tech centers, governmental programs, and business partners within/out Korea
• Productization – Work with Korean SMEs in turning innovations into commercial products
• Global Stars – Help the Korean SME/start-up collaboration reach beyond borders
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confiden'al
Green/Clean Tech Solar, Win, Fuel Cell, LED, EV, Resource Conserva:on
Smart IT
Smart Phone/Pad/TV
Smart Grid
Fusion Tech Broadcas:ng, Nano Tech,
Intelligent Robot, Telema:cs
Media Contents Contents Crea:on,
Distribu:on, New Media
Our Typical Investments
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We typically invest in companies pursuing the following segments and with solutions beyond the proof-of-concept stage.
confiden'al
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Jason Lee Managing Director