Transcript Doing Business & Finding Funding in Europe

CITD Seminar :
Doing Business in Europe
Welcome
San Francisco Sept 21st 2004
Jacques Putzeys
[email protected]
Discussion points
Europe
Funding trends
Investor mindset
Challenges
Who we are
European market
Initially, the EU1 consisted of just six countries: Belgium, Germany,
France, Italy, Luxembourg and the Netherlands. Denmark, Ireland
and the United Kingdom joined in 1973, Greece in 1981, Spain and
Portugal in 1986, Austria, Finland and Sweden in 1995.
In 2004 the biggest ever enlargement takes place with 10 new
countries joining These new countries are Estonia, Latvia, Lithuania,
Poland, Czech Republic, Hungary, Slovakia, Slovenia Cyprus and
Malta.
This new EU-25 market counts more than 425 millions inhabitants
and his 2001 GDP is reaching an astonishing $10.000 billion.
Furthermore the 10 new countries (P10) are fast growing markets
with on average a 3% GDP annual growth.
Europe
US companies also prefer to expand to Europe in first instance
because of:
• The short travel distances between EU countries
• The vast majority of EU countries are in the same time zone
• Good connectivity between capitals and economic centers
• Tax incentives from local, regional, national or European
authorities
Most of the time US companies consider Europe as being the
natural gateway to the Middle East and Africa.
Risks
Some of the common risk factors noted in regulatory filings:
Cultural differences;
Longer payment cycles;
Laws favoring local competitors;
Credit risk and higher levels of payment fraud;
Legal and regulatory restrictions;
Currency exchange rate fluctuations;
Higher costs;
Diverting management attention.
European economic freedom
Some European countries ranking in world’s most economically free nations
(1):
Ranking
Country
3
USA
3
Switzerland
3
UK
9
Ireland
11
Estonia
18
Belgium
22
Germany
22
Hungary
36
Latvia
41
Czech Rep
44
France
(1) Source : Fraser Institute, July 2004
Europe, local
markets
Local markets :
• are still dominated by national incumbents
• have their own tax and VAT regulations
• have different regulations even if the European Commission tends to
impose harmony in the regulation and standardization of the market
As result of these particular situations, many US companies have wasted
enormous amounts of time and money by trying to enter the Single
European market.
European Commission
Role
Recent Microsoft ruling
Focus on :
Technology transfer
Funding of technology companies
Harmonization
Funding trends
Since 2002, the Biotechnology & Healthcare category has
been the dominant leader in receiving venture capital
investment in Europe (2002: 30% of total; 2003: 39% and
2004 to date: 36%).
Equally consistently, for the last two years
Software has followed in a secure second place, trailed by
Communications in third place, with
Computers & Electronics coming in fourth.
Funding trends
2004 VC investments to-date :
Software 18%
Computers & Electronics 16%
Communications 23%
Bio and Healthcare 36%
Average weekly investment : € 50 M
Funding trends – ct’d
2004 : the funding of Communications companies is catching
up with Software – it is now only lagging 3% behind.
The wireless applications sector received by far the biggest
proportion of the funding in the category with 50.2% of all
investment secured to date. This is followed by wireless
hardware at 25% and fixed communications at 12.3%.
With 41 companies netting €191 million, Q1 2004 was the
largest quarter for Communications funding since Q4 2002.).
Venture capital activity
The private-equity firms that help seed new companies have
plenty of capital available, but they’re just not seeing a
tremendous amount of good companies to invest in.
The feeling is that there’s somewhere between $60 and $110
billion of non-invested venture capital that will at some point
be looking for a home.
Venture capitalists are concentrating on over-due diligence
and look for product that is deployed if possible, revenues if
possible, good brand-name customers if possible, and
outstanding management teams and track record
Valuations
As growth in the U.S. inevitably slows, companies
increasingly have to expand internationally to support their
valuations. Each company, however, will face unique hurdles
and needs to be innovative as to how and at what cost.
Challenges
TIME ZONES
CUSTOMER TRACTION
BUILDING TEAMS AND
PARTNERS
Challenges
How to preserve valuation and net equity position
Traditional way to expand into Europe : at least € 2 M
If financed from net equity position : impact on valuation
Liability build up
N2Euro concept
 Europe : 425 million inhabitants in 25 countries one of the most
important markets of the world economy.
 Legal, economic and cultural barriers : Europe is one of the most difficult
markets to penetrate.
 “Thinking globally, but acting locally”,
N2Euro understands this and offers you
-
ready-to-use and cost-effective assistance
your European company and performance-based operator
our company-in-residence services
no liability build up
Easy Package
Funding &
Capital Access
Management &
Team
Logistics
Providing Easy Logistics
Building A Team Of
Locally Based Managers
An Easy Package / Tool To Bring Your
Company From USA To Europe
Financing Needs &
Corporate Structuring
Sales
Building The Best Sales
Channels And Achieving
Sales Growth
Company From USA To Europe
An Easy Package / Tool To Bring Your
Doing Business in Europe
Financial and other incentives for
setting up a business in Europe
a real life example from Europe
San Francisco
September 21st 2004
Freddy Nurski
[email protected]
Knowledge-Regions
Competition
 80 countries – 400 knowledge regions
 US:
• Silicon Valley, Route 128, North Carolina Research Triangle
• Medical Alley, Biomed Mountains, Rolling Silicon Hills,
Laser Lane, Medical Mile, Ceramics Corridor, Champaign
Software Prairie, San Diego Bio-Valley
 Asia:
• Hong Kong, Shanghai, Kuala Lumpur, Inchon, Hsinchu,
Kyoto, Bangalore
 Europe
• Sophia Antipoles, Oulu, Tampere, Alba Centre, Silicon Fen,
Munchen, Lyon, Leiden, Tel Aviv,…
• Leuven ?
7/18/2015
An example : Leuven : Clusterpolicy
Mechatronica
E-security
Feed – food
- health
L-SEC
Leuven.Inc
Telematica
Communicatie
DSP-Valley
Life
sciences
Micro-elektronica
Nanotechnologie
Definition Cluster
 Clusters represent the driving force for economic development
in many countries (regions).
 They are concentrations of innovative,
interdependent enterprises (co-competitors) ,
working in the same field,
localized in a specific geographic area,
in close proximity to centers for research & development.
Telematica-communicatie
Knowledge
centres
Terayon Comm. Systems
X-Plane SIMAC
Able
Centers of
excellence
Altaline Technologies
QMedit
Sitelcom
Spacechecker
Agilent Technologies
Q Star Test
Micro Matic
Easics
Reymen Mind Linux Solutions
Data Center
Acunia
Ardatis
Septentrio
K.U.Leuven
4 Research groups
EMD
Medicim
Orban
Microwave
Products
Adelante
Technologies
Opikanoba
Topcom
Weidmuller
FillFactory
Delta Design
Netsize
Resonext
Tomoton
Telraam
Option International
CDM
AnSem
Philips
Mixed innovative
companies
Arcadiz
Telecom
ICOS
IMEC
Wireless & multimedia
platform
Better Access Windriver
Pure innovative
companies
Eyetronics
IMEC
KULeuven
Hypervision
Telindus
Xentec
Smash
Loft33
Uitgeverij Averbode
Tyco Electronics
Xplanation
Micro-elektronica - nanotechnologie
Knowledge
centres
Eyetronics
Telindus
B.E.S.T.
Centers of
excellence
Tyco Electronics
Newfrom
Option International
Resonext
A.C.S. Belgium
Eonic Systems
Cypress Semi
ARM
FillFactory
Assurcard
Luciad
Vivactiss
K.U.Leuven
ICOS Vision
Systems
JSR Electronics
STM
Lab Photochemistry & Spectroscopy
Lab of Solid-state Physics & Magnetism Agilent Techn.
Tomoton
J.W.Lemmens
Vector International
IPCOS
Photovoltec
Xenics
Pure innovative
companies
Philips ITCL
IMEC
Oligosense
Krypton
Micro Matic
KULeuven
IMEC
Epiq Sensor Nite
Septentrio
Sub-45nm research facility
Nanotechnology Platform
Design platform
Delcomp
ASM Belgium
Target Compiler Techn.
Soltech
AnSem
Easics
CoWare
Mixed innovative
companies
LMS
Mind Linux
Solutions
Data4S
Life sciences
Knowledge
centres
E.S.R.I.
Deckers Div
Dermat
Centers of
excellence
Biotest Seralco
Benelux
Thromb-X
Norgine
reMYND
Tigenix
4AZA Biosciences
RNA-TEC
Dakocytomation
Terumo
Europe
Cochlear
Medvision
Benelux
Algonomics
Univ hospitals
K.U.Leuven
Rega Institute
CEHA
PatientWeb
M-Elect
Autocyte
Europe
Vivactiss
Lab of Exp. Genetics & Transgenese
KULeuven
IVIA
QMedit
Custom8
PharmaDM
Pure innovative
companies
VIB
VIGOUR
@Medical Techn.
Conti BPC
Data4S
Malaise&co
MXS
New Standard Eng.
Medicim
Materialise
Mixed innovative
companies
Centocor
VWR International
Ortec
Feed-food-health
Knowledge
centres
GC Europe
Citrique Belg
Interbrew Belgium
Proefbedrijf voor witloof
Bodemkundige dienst België
Remy Industr
SES Europe
Centers of
excellence
Engelhard Belgium
GE Betz
Centrum Toegep. Biol.
ICI-Europe
Sensient
Flavors
K.U.Leuven/VIB
Center of Microbiol & Plant Gen.
Lab Molecular Cell Biology
B.R.I.S.K.
Lochow-Petkus
Belgium
Cargill
KULeuven
Toxicon Europe
Pure
Global
Water
Hercules Europe Techn
3E
Frisk Intll
Better3Fruit
Aveve
Pure innovative
companies
Omni Scala
Quomak
Sodiaal
Benelux
Intern. Aquatreat Belgium
Orafti Group
B.E.S.T.
Kon. Belg. Inst. tot
Verbetering vd Biet
Tiense Suiker
Mixed innovative
companies
K.U.Leuven
6 centers of excell.
SST Food
Machinery
Barco Elbicon
Clusterpolicy
N° of
companies
2004
2010 (est.)
>300
400
Turn-over
4.5 bi €
Jobs
15.500
7/18/2015
8 bi €*
* Growth 10 %
20.000
IWT : The Flemish Institute for the
Promotion of Scientific and Technological
Research in Industry
Flemish government institution which promotes, supports and
stimulates industrial research in Flemish industry
IWT manages the funds available for promising research
projects
• Financial incentives
• up to 50-60% of research costs
• low interest loans
• up to 25-35% for prototype projects
• feasibility studies
• Information
The applicant does not have to be Flemish, but should be
established in the Flemish Region
Budget: approximately US$100 million a year
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