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Entrepreneurship and Venture Capital in Spain - Nico Goulet - Adara Ventures - Stanford - March 1 2010
 

Entrepreneurship and Venture Capital in Spain - Nico Goulet - Adara Ventures - Stanford - March 1 2010

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Talk at Stanford Engineering School by Nico Goulet, Adara Venture Partners, Madrid, Spain, March 1 2010.

Talk at Stanford Engineering School by Nico Goulet, Adara Venture Partners, Madrid, Spain, March 1 2010.

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    Entrepreneurship and Venture Capital in Spain - Nico Goulet - Adara Ventures - Stanford - March 1 2010 Entrepreneurship and Venture Capital in Spain - Nico Goulet - Adara Ventures - Stanford - March 1 2010 Presentation Transcript

    • Entrepreneurship and
      Venture Capital in Spain
      NicoGoulet
      Adara Venture Partners, Madrid, Spain
      March 1, 2010
      European Entrepreneurship &Innovation Program
      School of Engineering
    • Historical perspective on Venture activities in Spain
      Drivers of change: 2000-2010
      Current environment & implications
      Adara Ventures
      March 2010
      2
      OVERVIEW
    • The entrepreneurial eco-system
      3
      FRAMEWORK
      Entrepreneurs &
      Innovation
      Venture Funding
      & Support
      Success
      Stories
      March 2010
    • A HISTORICAL PERSPECTIVE
    • 5
      HISTORICAL PERSPECTIVE
      Barriers to entrepreneurship
      Recognition
      Culture of Risk & Reward
      Support
      Funding
      Opportunity Cost
      March 2010
    • 6
      HISTORICAL PERSPECTIVE
      Historical structure of private funding (pre-2000)
      • Almost all private funding focused on PE
      • Some public funding efforts
      • No major successes to point to
      • Practically no specialized venture funds
      • Very difficult for entrepreneurs to find financial support beyond the Friends and Family stage
      March 2010
    • 7
      HISTORICAL PERSPECTIVE
      Situation at the turn of the century
      M
      March 2010
    • DRIVERS OF CHANGE 2000-2010
    • 9
      DRIVERS OF CHANGE
      Skilled professional base
      March 2010
    • 10
      DRIVERS OF CHANGE
      Low cost base
      March 2010
    • 11
      DRIVERS OF CHANGE
      Infrastructure support
      March 2010
    • 12
      DRIVERS OF CHANGE
      Strong local base of corporate technology “consumers”
      March 2010
    • 13
      DRIVERS OF CHANGE
      Institutionalized support
      March 2010
    • 14
      DRIVERS OF CHANGE
      2000-2010: From a vicious cycle to a virtuous cycle
      Attractive factor conditions
      • Productivity of human assets
      • Lower infrastructure cost base
      • Commercial (and Exit) possibilities pan-European/Global
      • Strong government support
      Getting entrepreneurs what they need to thrive
      • Funding & Capital
      • Strategic support
      • Development support
      • Networking
      March 2010
    • 15
      DRIVERS OF CHANGE
      Spain has attractive factor conditions for company building
      • Productivity of human assets is very high
      • High quality professionals
      • Universities with good programs, including technological/technical
      • High patent productivity for Madrid, Barcelona and Basque regions
      • R&D: low cost and globally competitive
      • High quality of life makes it easier to attract outside talent
      • Excellence in software development processes
      • Lower infrastructure cost base
      • Regions are competing to attract investment and companies
      • Effective aid and subsidy programs to support growth and development (CDTI, SEPIDES, PROFIT, …)
      • Technology parks have grown from 6 to 17 over the past years, providing significant start-up support
      • Combined revenue for Spain’s tech parks stands at €5.5b
      • R&D employment at 9000
      • Commercial and Exit possibilities are now pan-European
      • Harmonization enhances the potential for acquisition of regional companies by major European players
      • The European market offers significant growth opportunities to Spain based companies
      • Strong political desire to support innovation and entrepreneurship
      • Strong fiscal incentives to develop
      • Many development and subsidy programs available to fund R&D programs
      March 2010
    • 16
      DRIVERS OF CHANGE
      Getting entrepreneurs what they need to thrive
      Capital
      Including follow-on support and commitment
      - Configuring subsequent funding rounds
      Investor management
      Strategic support
      Critical one time decisions
      - Product launch configurations
      - Strategic partnerships
      - Mergers & acquisitions
      Development support
      Commercial development
      - Finding and engaging blue chip customers
      Business development
      - Structuring product development deals
      - Distribution or project implementation agreements
      Team
      - Attracting and structuring the involvement of talented people
      Networking
      Relationships with larger VC’s (local and international)
      Links to blue chip companies in core and adjacent sectors
      Access to international peer companies
      March 2010
    • 17
      DRIVERS OF CHANGE
      Emergence of a SW development cluster
      March 2010
    • 18
      DRIVERS OF CHANGE
      Emergence of specialized Venture Capital fund managers
      March 2010
    • 19
      DRIVERS OF CHANGE
      Participation of foreign funds in local investments
      March 2010
    • 20
      DRIVERS OF CHANGE
      Emergence of significant success stories
      March 2010
    • CURRENT ENVIRONMENT AND IMPLICATIONS
    • 22
      CURRENT ENVIRONMENT AND IMPLICATIONS
      Context
      Recession, budget cuts, investment plans curtailed
      Credit crunch
      Difficulty in raising new funds
      Very difficult business environment, particularly for smaller, entrepreneurial companies
      March 2010
    • 23
      CURRENT ENVIRONMENT AND IMPLICATIONS
      Survive…. and build for the future
      “Manage what you can control…”
      • Focus on preserving cash and reaching break-even
      • Continue to pursue healthy growth targets, focusing on high growth and diversified markets
      • Cost control a top priority, constantly reviewing performance and risk/benefit
      • Pursue funding rounds wherever conditions are favorable, but minimize dependence on external sources
      • Adapt your strategy to potential exit scenarios
      March 2010
    • 24
      CURRENT ENVIRONMENT AND IMPLICATIONS
      VC’s perspective
      Focus on strong growth opportunities and diversified markets
      No debt, only equity: Manage funding and fundability
      (Even) longer exit horizon
      People, people, people…
      Cash, cash, cash…
      March 2010
    • ADARA VENTURES
    • 26
      ADARA VENTURES
      Apply traditional VC model to the Spanish eco-system
      $80Mn first time fund
      Institutional base of investors
      Focused on ICT
      Invest in Spain or Spain related companies, with global footprint
      Seek to leverage experience and networks to drive growth in portfolio companies
      13 investments in total:
      Software services and platforms: 5 investments
      Mobile and On-Line services: 3 investments
      Components and semi-conductors: 3 investments
      Telecoms equipment: 1 investment
      8 investments part of strong syndicates
      Amadeus (2x), Accel, TVM, GIMV, Active Capital Partners, Baytech, Caja Navarra, La Caixa
      March 2010
    • ADARA VENTURES
      Live Portfolio
      Exits
      Write-offs
      27
      As of February 2010
      March 2010
    • Growth track
      ADARA VENTURES
      Active portfolio revenue
      Portfolio revenue/employee
      28
      March 2010
    • 29
      ADARA VENTURES
      Our values
      Spirit of the Firm
      An entrepreneurial spirit underlies the philosophy of our firm. Creativity, boldness and commitment are critical to everything we do.
      Our investors’ interests always come first; then the interest of the entrepreneurs we support. By serving investors and entrepreneurs well, our own success will follow.
      We measure success through tangible results and performance.
      Integrity, honesty and fairness guide the way we do business.
      Our Work
      Our core activities are principal investing and company-building.
      We take pride in the professional quality and high standards of our work. We would rather be best than biggest.
      We manage our work and make decisions in an efficient and pragmatic manner.
      We strive to anticipate the changing industry environments in which we specialize. We seek to remain innovative and regularly challenge our assumptions.
      People
      The value of our firm lies in our people. Our main assets are our reputations, knowledge, and relationships.
      We believe that teamwork, supported by individual initiative, is the best way to obtain outstanding results.
      We strive to recognize and harness talent, with a preference for diversity in such talent.
      We look to develop long-term, win-win collaborative and trusting relationships with our stakeholders.
      March 2010
    • Thank You