Transcript TGFS- Venture Capital Fonds for Saxony „2nd Brussels Workshop“ on the Future of the European Cohesion Policy“ Thursday, 12 November 2009 1 |

TGFS- Venture Capital Fonds for Saxony
„2nd Brussels Workshop“ on the Future of the European Cohesion Policy“
Thursday, 12 November 2009
1 | 9. November 2009 | Helmut Stier
Economic and structural policy goals of the TGFS
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Saxony: medium-sized industrial base with focus on technology; high level of qualifications; well
established research infrastructure; lack of large enterprises with effective research departments
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Growth through innovation comes primarily from company assets and new businesses
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Market failure in the early stage of funding; this leads, amongst other things, to insufficient commercial
exploitation of R&D potential and comparatively low number of innovative business formations (e.g.
study by Centre for European Economic Research)
2 | 9. November 2009 | Helmut Stier
Structure and funds
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TGFS makes available venture capital für young technological enterprises.
Investors:
Free State of Saxony
Silent participation
45 Mio. EUR
EFRE: 35 Mio. EUR
Land: 10 Mio. EUR
18 Mio. EUR
LBBW
Sparkasse Chemnitz
Sparkasse Leipzig
Sparkasse Dresden
15 Mio. EUR
TGFS Holding
GmbH & Co. KG
TGFS Seed
TGFS Start up
20 Mio. EUR
40 Mio. EUR
2 Mio. EUR
Seed financing
3 | 9. November 2009 | Helmut Stier
27 Mio. EUR
13 Mio. EUR
Start-up financing
Conditions for participation
Enterprise
phase
Seed and Start-up
Product (ideas) ready to be launched
onto the market within 18 months
Young enterprises
Maximum 5 years old
Information and telecommunication technology
Semiconductor and microsystems technology
Area of
technology
Internet / New media
Innovative high tech sectors
Material sciences
Environmental and energy technology
Life Science / Medical technology
Developing products close to the market
Funded by
Product launches
If necessary establishment of production
4 | 9. November 2009 | Helmut Stier
Funding requirements for
the product
How the TGFS works
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Close to the market: as far as known first tendering procedure for funds management for a EFRE
venture capital fund in Germany. For the fund management, raising additional funds was an award
criterion in the tendering process. This meant that private investors could become involved in the
fund and the fund management. Commitment from private investors used to be focused on company
level, not on fund level.
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Disproportional loss distribution through release from liability (50% for private investors) make
participation in TGFS attractive for investors.
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TGFS should achieve a financial return in line with the industry standard. Profit orientation of
investment decision through incorporation of investors via an Investment Committee.
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Investment period basically up to five years after start of the fund. Settlement on the basis of
Structural Fund regulations until 31/12/2015.
5 | 9. November 2009 | Helmut Stier
Incorporation of the TGFS in regional networks
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Typical of VC is the close support given to firms by the capital provider in all stages of
participation
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This essential support is guaranteed by TGFS through the presence on the spot of the savings
bank partners and the pan-regional and international network provided by CFH (an associated
subsidiary of Sachsen Bank/LBBW)
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The TGFS pursues active networking and supports this through existing structures in Saxony
6 | 9. November 2009 | Helmut Stier
Interim evaluation of the TGFS model
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The means and instruments for promotion are innovative, above all through the competitive
tendering procedures for fund management
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To date, 11 investments have been made, at a cost of 5.4 million euros (since April 2008)
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Increased use of innovative financial instruments under Strucural Funds Programmes
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Problems encountered when establishing the TGFS: High complexity of EU rules requires great
efforts
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Strengthening of the R&D potential through increasing the efficiency of economic performance of
enterprises remains essential
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"European added value" through the programming process/Lisbon strategy
7 | 9. November 2009 | Helmut Stier