Venture Capital funding of public spin-offs OECD workshop on high-technology  spin-offs from public sector research Paris,...
Sitra’s structure: principals and functions   Finnish Parliament Supervisory Board Board of  Directors Management <ul><li>...
Sitra’s Operational Sectors <ul><li>Corporate finance   </li></ul><ul><li>Seed finance and commersialisation  of technolog...
Seed and start-up Growth stage Strategic investments Sitra Venture Capital 60  (148 Mmk) 42  (227 Mmk) Privatised part of ...
Clear tendency from public to private investments as the VC business matures Source: FVCA
Motives for VC investment;  public investments shift to the early stages Source: FVCA
Sitra focuses on seed & start-up financing  Domestic venture  capital companies Sitra Sitra 2nd round (Sitra) (3rd round) ...
Breakdown of Sitra's funding in 1998
Business maturity  within Sitra’s portfolio companies in 1998 TOTAL 102 companies EUR 63 million 24 companies EUR 17.8 mil...
Industrial distribution  within Sitra’s   portfolio companies in 1998   <ul><li>Biotechnology (11 co.) </li></ul>TOTAL 102...
Management network of the regional funds <ul><li>Tekno Advisors Oy,  Oulu (100%) </li></ul>Sentio Invest Oy,  Tampere (100...
Network of regional funds <ul><li>Teknoventure Oy,  Oulu </li></ul>Pikespo Invest Oy Ltd,  Tampere Spinno-seed Oy,  Espoo ...
Network for technology transfer Oulutech Oy Oulu Tamlink Oy Tampere Oy Aboatech Ab Turku Helsinki University Licensing Ltd...
Public sector activities for R&D in Finland P A R L I A M E N T G O V E R N M E N T Other ministries and their institutes ...
Universities and technology transfer <ul><li>Universities and Sitra co-own 6 technology   transfer companies in 4 universi...
Future Development <ul><li>Harmonized practices to commercialise university IPRs </li></ul><ul><li>Advanced Technology Tra...
Three approaches to the  commercial utilisation of innovations Innovation Growth company Acquisition vehicle Sale/License ...
VC criteria -  special concerns with spin-off firms  <ul><li>Early stage </li></ul><ul><li>Professional management  </li>...
Licensing is also a viable option  for the commercialisation of IPRs  <ul><li>Scientist and entrepreneurship - a rare comb...
Thank you! [email_address]
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Funding sources and strategies

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Funding sources and strategies

  1. 1. Venture Capital funding of public spin-offs OECD workshop on high-technology spin-offs from public sector research Paris, December 8th, 1999 Risto Kalske Director, Technology Transfer [email_address] SITRA, Finnish National Fund for Research and Development
  2. 2. Sitra’s structure: principals and functions Finnish Parliament Supervisory Board Board of Directors Management <ul><li>Research </li></ul><ul><li>Training </li></ul><ul><li>Innovative </li></ul><ul><li>operations </li></ul><ul><li>Financing of </li></ul><ul><li>technology </li></ul><ul><li>companies </li></ul><ul><li>International </li></ul><ul><li>funds </li></ul><ul><li>Regional funds </li></ul><ul><li>Commercialisation of technologies </li></ul>
  3. 3. Sitra’s Operational Sectors <ul><li>Corporate finance </li></ul><ul><li>Seed finance and commersialisation of technologies </li></ul><ul><li>Investments in venture capital funds </li></ul><ul><li>Research and innovative operations </li></ul><ul><li>Training </li></ul>
  4. 4. Seed and start-up Growth stage Strategic investments Sitra Venture Capital 60 (148 Mmk) 42 (227 Mmk) Privatised part of Sitra Bio Fund Management Oy Eqvitec Partners Oy Sitra Fenno Management Oy Sitra Bioventures Ky Eqvitec Tech Fund I Ky Fenno Program (Sitra 30%, man. 70 %), 0,5 Mmk (Sitra 31%, managers 69%), 0,3 Mmk Investments in funds Direct investments 74 Mmk 74,5 Mmk 16 (40 Mmk) 102 (375 Mmk) 25 (145 Mmk) 48 (201 Mmk) 5 (150 Mmk) Regional funds (Sitra 40%, managers 60%), 0,8 Mmk 155 pcs (726 Mmk, ECU 121 million) Tech.transfer 7 (16 Mmk) Inv. in technology transfer Sitra's Venture Capital Activities
  5. 5. Clear tendency from public to private investments as the VC business matures Source: FVCA
  6. 6. Motives for VC investment; public investments shift to the early stages Source: FVCA
  7. 7. Sitra focuses on seed & start-up financing Domestic venture capital companies Sitra Sitra 2nd round (Sitra) (3rd round) International financing Tekes
  8. 8. Breakdown of Sitra's funding in 1998
  9. 9. Business maturity within Sitra’s portfolio companies in 1998 TOTAL 102 companies EUR 63 million 24 companies EUR 17.8 million 27 % 13 % 10 % 27 % 23 % 23 companies EUR 14.2 million 36 companies, EUR 6.9 million 5 companies, EUR 7.8 million 14 companies EUR 16.1 million
  10. 10. Industrial distribution within Sitra’s portfolio companies in 1998 <ul><li>Biotechnology (11 co.) </li></ul>TOTAL 102 companies EUR 63 million Chemical industry (7 co.) Transportations (3 co.) Medical companies (22 companies) Other electronics (17 co.) Other manufacturing (2 co.) Control and monitoring (7 co.) Industrial production (13 co.) Information technology (9 co.) Communication (5 co.) 5.2 m 4.7 m 1.4 m 2.7 m 18.8 m 7.5 m 1.3 m 1.7 m. 10.4 m 6.0 m 3.2 m Consumer goods (5 co.) Travelling (1 co.) 159 000
  11. 11. Management network of the regional funds <ul><li>Tekno Advisors Oy, Oulu (100%) </li></ul>Sentio Invest Oy, Tampere (100%) Aboa Venture Management Oy Turku 25,2% Savon Invest Management Oy Kuopio (100 %) Indekon Management Oy Lappeenranta (100%)
  12. 12. Network of regional funds <ul><li>Teknoventure Oy, Oulu </li></ul>Pikespo Invest Oy Ltd, Tampere Spinno-seed Oy, Espoo Indekon Oy, Lappeenranta Midinvest Oy, Jyväskylä Karinvest Oy, Joensuu Savon Teknia Oy, Kuopio Innoventure Oy, Helsinki
  13. 13. Network for technology transfer Oulutech Oy Oulu Tamlink Oy Tampere Oy Aboatech Ab Turku Helsinki University Licensing Ltd. Oy Helsinki Finntech Finnish Technology Ltd Oy Espoo
  14. 14. Public sector activities for R&D in Finland P A R L I A M E N T G O V E R N M E N T Other ministries and their institutes <ul><li>Funds like: </li></ul><ul><li>SITRA </li></ul><ul><li>Kera Oy </li></ul>Ministry of Trade and Industry Ministry of Education Academy of Finland Universities Technical Research Centre of Finland Science and Technology Policy Council 12/95-06 National Technology Agency Tekes
  15. 15. Universities and technology transfer <ul><li>Universities and Sitra co-own 6 technology transfer companies in 4 university towns </li></ul><ul><li>The technology transfer companies </li></ul><ul><ul><li>identify ideas with commercial potential </li></ul></ul><ul><ul><li>evaluate technologies </li></ul></ul><ul><ul><li>serve researchers in commercialising their idea (on a royalty sharing basis) </li></ul></ul>
  16. 16. Future Development <ul><li>Harmonized practices to commercialise university IPRs </li></ul><ul><li>Advanced Technology Transfer Network to </li></ul><ul><ul><li>offer professional licencing services </li></ul></ul><ul><ul><li>enhance the birth of spin-off companies </li></ul></ul><ul><ul><li>offer international Technology Brokearage services </li></ul></ul><ul><ul><li>link the financing institutions to the spin-offs </li></ul></ul><ul><ul><li>advice on suitable options to utilize the IPRs </li></ul></ul>
  17. 17. Three approaches to the commercial utilisation of innovations Innovation Growth company Acquisition vehicle Sale/License of IPRs • true entrepreneurship • technology brokerage • exit means
  18. 18. VC criteria - special concerns with spin-off firms <ul><li>Early stage </li></ul><ul><li>Professional management  </li></ul><ul><li>Level of commitment  </li></ul><ul><li>Business plan  </li></ul><ul><li>Novelty value </li></ul><ul><li>Identified customer need  </li></ul><ul><li>Ownership of the IPRs  </li></ul><ul><li>Growth potential </li></ul><ul><li>Total financial plan  </li></ul><ul><li>Terms of partnership </li></ul><ul><li>Exit plan </li></ul>Spin-offs
  19. 19. Licensing is also a viable option for the commercialisation of IPRs <ul><li>Scientist and entrepreneurship - a rare combination </li></ul><ul><li>The promotion of spin-off activities attracts top-notch researchers </li></ul><ul><li>Financial benefits tend to supersede scientific calling </li></ul><ul><li>Brain drain affects the quality of university research </li></ul><ul><li>Professionally organised licensing may offer a balanced win-win solution in many cases </li></ul>
  20. 20. Thank you! [email_address]

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