Building an Innovation Ecosystem in Portugal

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Venture capital and private equity are crucial financing vehicles in modern economies as they are the main drivers behind innovation-based investment. Innovation implies accepting a risk level far …

Venture capital and private equity are crucial financing vehicles in modern economies as they are the main drivers behind innovation-based investment. Innovation implies accepting a risk level far superior to standard investments. Venture capital offers a financing solution for those who have the vision to explore new paths. For a society to call itself innovative it needs to provide the tools for the development of new ideas and the means to finance them. Venture Capital is in fact a Read More

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  • 1. Awarded byNewsletter #17, 14th September, 2012Musikki refreshed 3rd Edition e-Teams I Crash CourseWith a blog online and the "Album of the day", Musikki The Jury selected and invited 20 teams to enter the Building Global Innovatorshas a refreshed homepage dedicated to a new band program – 3rd Ed.every week. More news will be announced soon, keeptuned! 30% of the teams are international and over 50% have international co- founders! Argentina, Austria, Brazil, Germany, Italy, Iran, Portugal, Russia, Spain, Turkey, UK and USA are the countries represented this year. During 4 days a multidisciplinary, hands-on crash course was held in Lisbon (ISCTE-IUL).Blastboard the new Springboard resident , one of the IT & WebSemifinalist is among the 10 teams invited to participatein the next Springboard edition. Starting in September,the Blastboard team benefit from the mentor-ledaccelerator London-based program. In Nov.13th they willbe back in Lisbon, for the BGI VC Track Finals deckpitch.Portugal announces a €600 million in VC funding A reform of state venture A networking session closed this first session, a unique opportunity to meet capital funds has enabled and to pitch for a pool of investors and entrepreneurs. the launch of new focused funds to support startups in several stages Next steps: after a refreshing break teams got back to work on their Go-to- of maturity. "We want to Market strategies and mentoring meetings. By October the plans will becreate the conditions to compete on a global scale in evaluated by an expert Jury panel (one for each track).the development and emergence of startups," said JoséEpifanio Franca, newly elected president of PortugalVentures. Building an Innovation Ecosystem in PortugalPortugal Ventures kicks off with funds amounting to€600 million, including a €20 million a year funding for By Carlos Oliveiraan ignition "VC-like" phase. Read more. Deputy Minister for Entrepreneurship, Competitiveness and Innovation at Portuguese GovernmentOver 50% of Biotech Venture Financings are EarlyStage DealsMost readers won’t believe the title, or at least not ifthey’ve read much in the past few years about the Venture capital and private equity are crucial financing vehicles in modernanemic early stage biotech environment…It all comesdown to what do we mean by “early stage”. To economies as they are the main drivers behind innovation-baseda biotech hedge fund trader, it might be pre-Phase 2. investment. Innovation implies accepting a risk level far superior to standardSo these data clearly support the idea that in 2011 therelative proportion of financings done around “early investments. Venture capital offers a financing solution for those who havestage” deals is reasonably high. Aprox. 60% of dealsthat get funded have some claim to being called “early the vision to explore new paths. For a society to call itself innovative it
  • 2. Awarded bystage” investments. Read more needs to provide the tools for the development of new ideas and the means to finance them. Venture Capital is in fact a part of a virtuous cycle of innovation where good projects exist because they have access toAll-Desk has a newly-appointed Chairman financing and venture capitalists exist because they have access to aThe 2nd Ed. IT&Web finalist All-Desk has recently stable, interesting and high potential deal flow. This symbiotic relationshipwelcomed Stan Kugell as the company chairman. between promoters and VCs is the foundation of an innovation-based society. The dynamics of a successful VC system are best displayed in the US, by far the most developed VC market in the world: VC investment amounts toStan is a successful serial entrepreneur and investor 0,2% of GDP, is responsible for 11% of the nation’s jobs and globalfrom the Boston ecosystem. He will help All-Desknegotiating with investors to raise a series A round, revenues from participated companies ascend to a whopping 21% of GDP.among strategic support. Want to keep updated on All- Portugal is frankly behind the curve insofar as VC investments areDesks developments? Subscribe their monthlynewsletter concerned. We invest only 0,007% of GDP which is low even by European standards - the EU average is 0,027% of GDP and in Sweden VCHow Y Combinator Built A Billion-dollar Brand For investment accounts for 0,064% GDP.Startups It was therefore crucial to develop and promote an innovation ecosystemSeven years ago, Paul Graham and his now-wife that on one hand enables promoters to develop their ideas and on the otherJessica Livingston founded a startup accelerator, YCombinator. Since then, it has become the most ensures they have access to funding, especially in the early stages of theircompetitive startup program in the world. To date, more venture’s development. With that in mind the Government is carrying out anthan 460 startups have gone through the accelerator,and theyve gone on to raise more than $1 billion ambitious reform in public venture capital under the Entrepreneurship andcollectively. "There are a lot of amazing, amazing Innovation Strategic Program (+E+I). That reform has two main objectives:companies coming out of Y Combinator. They typicallyhave technical founders too”, which is something a lot of Increasing deal flow and access to funding.other programs avoid having. As an investor, it meansyou have to pay more." Read more Increasing deal flow Portugal has had historically low levels of innovation based entrepreneurship and globally few promoters of new ventures. Many factorswi-GO wins the podium in the Imagine Cup Final contribute to this state of affairs but main obstacles have been thewi-GO the 2nd edition P&S Honorable Mention won the inefficient cooperation between the main stakeholders in the innovation3rd place in the international final of the MicrosoftImagine Cup. process – promoters, universities, incubators, advisors and financing sources – and the lack of financing options for new ventures. The Ignition Platform, launched by the Portuguese Ventures (the new state- owned VC), will serve as a platform for cooperation between the different stakeholders. We expect that this increased platform will trigger the cooperation necessary to an innovation ecosystem while making sure that entrepreneurs have access to means that allow them to develop their ideas. In addition, the above mentioned +E +I Program, also contemplates the development of a methodology to identify companies with high growthAn hard competition between 350 students of 75countries was held in Sydney, Australia, during 6 – 10 potential, by cross-referencing different investment incentive systemsJuly. For the first time Portugal stepped in to thepodium! Congratulations to the team. Read more. databases with references given by the scientific and technologic environment/system, as well as other entities that serve as interface with companies.
  • 3. Awarded byThe Paradox Of VC Seed Investing These are important initiatives that improve the availability of follow-up“Entrepreneurs regularly come to Founders Fund asking services to this type of companies, facilitating better access conditions tous to lead or participate in their seed/angel round. They internal capacitation instruments and visibility to raise the interest of majorare often confused or shocked when I try to convincethem that with very few exceptions, it is not in economic groups, financial intermediaries and investors (both national andentrepreneurs’ best interest to raise seed capital fromlarge venture firms and neither is it beneficial for large international).firms to invest in seed stage companies” says BrianSingerman. Among the reasons: the structure of VC These initiatives in turn create a friendly environment that attracts neweconomics and unavoidable perception issues. Read ideas and new promoters to our envisioned innovation ecosystem. In themore. creation process we need quality and quantity. Indeed we are well aware that for some ventures to succeed many others will fail and we are ready toSubmissions open to the 7th program of I&DT support both in our journey to create an innovative society.On the 10th July submissions opened to several Access to fundingprograms under Horizon 2020 – cooperation, capacity,ideas and people. You can find more about these here. Private involvement in VC financing has been historically low in our country, more so in a time of economic difficulties. The Government acknowledged this market inefficiency while understanding that it was crucial to expedite Horizon 2020 is the financial instrument access to funding to promising, innovative concepts. With that in mind, and implementing with the expectation that an efficient public involvement in the sector will the InnovationUnion, a Europe 2020 flagship initiative aimed at jump start private VC operations, the Government proceeded with thesecuring Europes global competitiveness. Running reform of the state owned VC operations. We merged the three publicfrom 2014 to 2020 with an €80 billion budget, the EU’snew program for research and innovation is part of the entities operating in this sector: Inovcapital, Turismo Capital and AICEPdrive to create new growth and jobs in Europe. Capital Global. The resulting company, named Portugal Ventures, now centralizes the entire state owned VC operations. It has an investment portfolio valued at around 600 M€ with investments spread over 18010 sustainable business ecosystem leaders towatch companies in several sectors.The leaders in the sustainable business ecosystem are With this merger the Government goes from being a silent partner to act asoften toiling behind the scenes, but they are working in an active investor interacting with the promoter in every stage of hisvery distinctive projects. Get to know the activity fieldsand the people behind it. company’s development and contributing decisively to its success. It is this notion of smart money that will allow for new businesses to mature and contribute to export increase and job creation. Portugal Ventures has around 140 M€ available to invest in companies that share this approach and that prove to be on the leading edge of innovation, willing and able to compete around the world. Our end game is to create an environment that attracts private investors, national and international, to Portuguese VC operations which will allow for a progressive phasing out of the Government as a VC investor. Once againDo Portuguese-based startups fit in the StartUpGenome traits? we recognize that this is a work in progress. In order to attract private investors we need to have good projects and to do that we must lay theStartup Genome Compass, is a benchmarking tool forentrepreneurs which automatically classifies them by foundations for risk taking, innovative individuals to work in.type and stage and compare them to other startups inthe same type and stage across more than 25 key The role of Government in the promotion of entrepreneurship does not endperformance indicators. here. We have to continue our efforts to decrease bureaucracy and build on
  • 4. Awarded byThis can be a very useful tool for startups to improve the decisive measures we already implemented such as the Zero Licensingtheir decision making. Want to know more? for the vast majority of industrial projects. We will keep on reducing these context costs that have for so long decreased our ability to compete withCheck our site for new great job offers here other nations on innovation. But this cannot be just a Government effort. All the players must do theirSave the Dates – update your calendar now: part for this vision to come to fruition. Promoters must be more active and risk taking, universities and incubators must serve as true enablers and Sept - Oct Rock Health Events advisors and VCs must actively find opportunities and serve as a sounding 26 – 28.09.2012 World Summit on Innovation & board for good ideas to develop and mature. Entrepreneurship 30.09.2012 Empreendedorismo em Turismo We are committed to a fundamental change in the approach for Cultural e Paisagístico 14 – 17.10.2012 LES Annual Meeting USA and entrepreneurship in Portugal. We believe that we have in this country the Canada: Toronto, Canada human capital and the ability to compete with the leading nations in this 15.10.2012 Arrica C - deadline area. Our future relies upon our ability to develop world class innovative 27 – 28.11.2012 RedEmprendia Spin2012 companies that are able to compete in the global marketplace. We will More events around Europe? Here continue to facilitate and enable the creation of a new way of doing business. Entrepreneurship is about taking risks and aiming high. We canFollow us on make it happen. The Organization wishes to thank to the Deputy Minister Carlos Oliveira for his contribution to the current Newsletter issue with this opinion article.Need more Information? Unsubscribe
  • 5. Awarded by