Transcript Slajd 1

CAPITAL
VENTURE
How KFK can fill in the financing gap
on the Polish high-tech market
TMT Ventures, 27/02/2008
1/13
How are we positioned in terms of
innovation?
European Innovation Scoreboard
Innovation leaders
0,8
SE
FI CH
Summary Innovation Index
0,7
Followers
0,6
DK
JP
US
UK
LU
NL
0,5
FR
AT
IE
EU 25
0,4
NO
IT
0,3
HR
0,2
0,1
CZ
HU
SK
LV
BG
RO
PL
Catching-up
Trailing
0
-4
-3
-2
-1
0
1
2
3
4
5
6
Average growth rate of SII, %
Source: (MERIT) and the Joint Research Centre (Institute for the Protection and Security of the Citizen) of the European Commission
2/13
Venture capital is clearly associated
with innovation…
Correlation between VC and ICT
Source: Yozma after USA Census, OECD, IVC Research Center, CBS
14%
Israel
ICT share in GDP
12%
10%
Korea
Ireland
UK
8%
USA
Japan
Sweden
6%
France
4%
0,0%
0,1%
0,2%
Canada
0,3%
0,4%
0,5%
0,6%
0,7%
0,8%
VC investment in ICT as % of GDP
ICT = Information and Communication Technologies
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…but small companies receive little
attention from VC investors
► Average
deal size is increasing year by year
► There
is a clear and continuing trend towards
regionalisation of PE/VC in CEE
► Seed
and start-up investments are outside
the focus of most PE/VC funds
=> SMEs have very limited access to equity funding
4/13
‘Death valley’ is a serious problem
capital needs
owner,
family
funding
'DEATH VALLEY'
time
idea
seed and start-up
growth
mature growth,
expansion
Source: prof. dr inż. J.G. Wissema, Technostarters, why and how?
5/13
This all means an equity gap
An equity gap means that the market fails
to provide enough equity financing
for small investment projects
►
►
►
Equity gap results from relatively high cost of preparing and
monitoring of small projects as compared to those large ones.
Additionally, small projects usually carry higher
further discourages managers from investing.
risks, which
On the other hand, small innovative projects can also produce
above-average
rates of return.
6/13
Response to the equity gap
►
KFK is a holding fund that was established with
the aim to reduce the equity gap persistent on
the Polish market.
►
KFK invests in VC funds targeting Polish SMEs.
►
We target professional management teams with
experience in VC-related investments and the
focus on innovative and high-growth projects.
7/13
KFK as a holding fund
►
As a holding fund, KFK invests in VC funds which target small and
medium-sized companies. In the coming years, our investment
portfolio will grow to around 20 VC funds.
Companies
Private
investors
VC Fund
VC Fund
Public
Investors
(EU)
NCF
VC Fund
…
~ 20 funds
8/13
Our investment process
►We
have designed our investment process to meet best practice that
works at recognized fund-of-fund investors
Tender launch
Analysis of Offers
Deal fulfilment
Monitoring
Exit
•Preparation of
•Formal analysis (checking out
•Negotiations of
•Accomplishment of
•Exits from portfolio
tender terms
for completeness of required
documents)
investment
agreement
investment
agreement
funds
announcement
(offer form, key
conditions of
investment
agreement)
• Primary financial & legal
•Signing of
analysis of documents (VC
funds resulting in a short list
that includes 1 to 5 best offers
investment
agreement
•VC fund financials
•Complying with
•Gathering of offers
•In-depth financial & legal
analysis (meetings with
management teams from short
list and presentation of their
offers, due diligence of offers
financial resources
to the fund
according to the
drawdown schedule
•Tender
•Final choice of
•Transfer of
information
standards by VC
fund
•Use of state aid
offers
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Our investment activity
►
Investment activity commenced in 2007
►
2 portfolio funds: BBI Seed Fund and Helix
Ventures Partners (MCI)
►
Joint cap of those two funds is PLN 100 million.
Focus on early-stage high-tech projects
►
Next bidding procedure: April 2008.
PLN 150 m at disposal, 3x as much as in the first
round
10/13
KFK as a part of the financial market
VC funds
Business
incubators
Companies
KFK
Public
markets
Technology
parks
Institutional
investors
11/13
KFK in 3 – 5 – 7 years
Joint investments of KFK and private investors
PLN 1 270 m
PLN 960 m
21 FUNDS
168 companies
16 FUNDS
PLN 600 m
128 companies
10 FUNDS
80 companies
in 3 years
in 5 years
in 7 years
12/13
Thank you
Krajowy Fundusz Kapitałowy S.A.
Racławicka 131/2u
02 – 117 Warszawa
Tel: +22 823 8821
Fax: +22 823 8823
[email protected]
www.kfk.org.pl
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