Transcript Presentazione di PowerPoint

Planning Session 2
The creation of Seed Capital Funds for Italy
4th IFISE Meeting
Milan, 1st March 2002
The issues
• Legal framework: EC laws for R&D and public financial support
• Government R&D policies: general R&D framework coming from
the will of central government
•Management Company establishment: new managers for new seed
funds
• Fundraising: use private raised funds reducing risk with public
support (Fund of Funds model)
•Entrepreneurship creation and Technology Transfer: the role of
public incubation system and University
• Exit way: what kind of link between Seed Capital Funds and VC
Funds?
Seed Capital: The model
LEGAL
FRAMEWORK
R&D policies
for
Technologies
FUNDING
FoF
Public support
(PPP)
SEED
CAPITAL
FUNDS
Private Managers
Entrepreneurship levels
EXIT
•VC funds (+PE)
Legal Framework
• It is vital to convince the government that the development of the
Seed High Tech Sector “is good” for the economy: demonstrate the
social/economic impact on the national/regional economy
• The first public money/incentives should activate seed capital funds
• If they succeed a virtuous cycle of “success stories” and good impact
on the economy is activated, then the government will be willing to
keep on running the programme (more money/more incentives)
• When the market is stable, then the private investors could come in
fully and the government should withdraw
New managers and new funds
• In Italy, the early stage activity seems to be mostly oriented towards the
start up industry. Only few investments are made in seed projects.
• The relationship with the VC world seems not to exist, and a link is now not
active because of different approach to the firm: companies coming from seed
projects are not seen as ready to be backed by VC’s
•The creation of new management companies committed to seed capital
activity is very highly recommendable to fill this lack of operators
•The importance of the role of Banca d’Italia act for the reduction of capital
requirements of Management Companies (promoted by Universities and
research centres) investing in new high tech firms
•The role of regional policies to cover the MC start up costs
The fundraising
• Funds raised for the VC activity is enough, but it is not invested in seed
projects
• The way to redirect part of these funds towards seed activity is to adopt the
Fund of funds model, in order to create a critical mass of funds to put into
smaller funds able to commit towards small seed projects:
1. Use the “one dollar to one dollar” basis to attract private money with
public money (PPP)  risk reduction
2. Activate effective collaboration with European Investments Fund to
catch a 30-40% sum for the FoF
3. Catch public money to fund part of the project (but not let the public
institutions run the funds)
Public and Private money managed by private professional new MC
The Demand side: entrepreneurship creation
• We can observe that, nevertheless the Italian R&D total expenditure p.a. on
GDP is about one half of the EU average (i.e. 1,04% vs. 1,92%), what we
really need is to transform the excellence research result into business
• The role of local entrepreneurship promotion activities played by the
numerous incubation systems and public agencies (such as Sviluppo Italia)
• The role of University incubators and technology transfer offices: we need a
more formal coordination of these actors
• Increase the entrepreneurship consciousness of researchers/scientists and
promote incentives to set up companies
Final issues…
•Create a sound solid connection between Seed capital funds and VC funds
• It is important to back the seed project in order to make it acceptable by the
future VC who will take the equity stake
• The first Euro million is a public-private matter
• Activate a network with Universities, Public incubation system and
government authorities to declare a formal framework programme with
declared goals
• Control mechanism for incubation activity: more money to incubators
which gained “high reputation”