Transcript Technology and business innovation Key factors for

Technology and business
innovation
Venture Backed Spin-Offs
7th Venture Capital Forum
Athens
June 28, 2006
Spyros Trachanis
NBGI Ventures
NBGI Ventures
• VC Manager, investing in early-stage technology
ventures in Europe and Greece since 2001
• Member of NBG Group
• Offices in London and Athens
• 7 portfolio companies in 4 countries, 3 Greek related, 4
academic spin-offs
• Almost all deals syndicated, ca. 20 VC and strategic
investment partners
Many paths to leveraging
Academic Research
• License technology to industry
• Offer as service
• Build Spin-Off company
• Raise VC funding
• Researcher engagement
Key factors for profitable spin-offs
Technology relevant to the industry
• Clear differentiation
• Globally competitive
• Strong Intellectual Property position
• Simple, practical and scalable solution
Magnitude of Opportunity
• Definition of addressable market
• Size of addressable market (TAM)
• Potential market share as justified by
competitive differentiation (SAM)
• Gross Profit margin potential
• Size matters:
– Potential for return on VC investment
– Attract follow-on capital
– Enable exit
Execution Capability
• Research team engagement
• Management identification & attraction
• Industry strategic relations
• Flexibility and adaptability
• Stamina and perseverance
University spin-offs in the US
• Since 1980, 4,543 spin-off companies have
been formed from US academic institutions –
462 in 2004
• Venture Capital firms funded 20% of new startup companies in 2004
• The US Patent Office in 2004 issued more that
3,800 patents to universities
• It usually takes 7 to 10 years for a spin-off
company to reach the state of an IPO
• AUTM – Association of University Technology
Managers
The UK status of spin-off companies
• 431 spin-off companies in the UK until mid 2005
– 46% life sciences, 39% ITC
– Only 25% of spin-off companies currently profitable
• The hits:
– Wolfson Microelectronics (Edinburgh U.) floated on
LSE for £214 mil.
– Renovo (Manchester U.) floated on LSE for £154 mil.
– Cambridge Display Technology (Cambridge U.)
floated on NASDAQ for $255 mil.
• Unico – University Companies Association
Policies: UK Government Initiatives
• Science Enterprise Challenge – Launched in 1999 and earmarked
£28.9 million to set up entrepreneurship centers by mean of
competition in the UK. Lead to the establishment of 12 Science
Enterprise Centers in Universities
• University Challenge – Launched in 2000. Aim to enable universities
to establish seed funds. Total funding available £45 million. Created
15 seed funds
• Higher Education Innovation Fund – On going
• White Paper: Excellence and Opportunity- a science and innovation
policy for the 21th century including records, roadmaps, targets etc.
• Tax incentives for IP commercialization
Greek academic spin-off and VC
backed community
1999-2006
Greek
academic
spin-offs
16
Greek
technology
VC backed
companies
13
6 VC backed spin-offs
€25 million total funding
to-date
From IP to IPO
PRAXE
Case study
• RF semiconductor company established in 2001
• HQ in Silicon Valley, Operations in Athens
• More than $10m invested to date from NBGI Ventures
and six other VC’s from the US and SE Asia
• Break-even in 2005, profitable in 2006
• Contracts with significant global companies
Conclusions and Key Points
• First wave of Greek spin-offs under way since the late
’90s, results start to appear
• Greek ventures underfunded
– Attraction of international venture capital is critical
– More syndication among local VC’s
– Large scale initiatives (Digital Leap)
• Leverage EU programs to forge strategic relations with
international industry
• Availability of management talent a key issue
• Design for success!