Klikk her for å laste ned presentasjonen til Bjørne


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  • Good morning everybody. First of all on behalf of Nordic Innovation Centre let me thank you for the invitation to present at EU Finance Day Sweden. I have been asked to tell you a bit about the efforts towards a common Nordic market for venture capital funds. My name is Hans Christian Bjorne and before I present an overview of the progress of our work on Venture Capital for the past couple of years, let me give you a brief introduction of the Nordic Innovation Centre – NICe - and the background of this effort.
  • As a logical consequence NICe is involved in a wide range of quite different areas, of which the promotion of a Nordic Venture Capital market has been an important one for the last two years
  • Out of 11 Nordic councils of ministers, NICe together with two other institutions belongs to the council of Business/Energy and regional affairs. The Ministers of trade & industry have their own committee of officials who NICe reports to and meet regularly. The Nordic area has co-operated for many years and NICe has a long experience in funding and supporting transnational networks between national innovation institutions, Nordic enterprises and research organizations.
  • Seeing private equity as an important part of the infrastructure of the innovation system, NICe has since 2004 invested in several initiatives trying to strengthen this infrastructure and remove barriers that weakens it.
  • The study of the Swedish market show how SMEs grow significantly faster (about 3 times the rate) in terms of sales and employment compared to listed companies. And this is why this segment is so important to focus on! We can assume a similar scenario for the other Nordic Countries.
  • We have a common agreement among Nordic policymakers that the PE industry plays a vital piece in the Nordic innovation system as an important contributor to new employment and new industries. The Nordic Council of Ministers has set a target on a well functioning true common Nordic venture capital market . Hopefully we will now for the next years see some concrete actions that will get us closer to that target.
  • Klikk her for å laste ned presentasjonen til Bjørne

    1. 2. Hans Christian Bjørne Innovation Advisor h.bjorne@nordicinnovation.net | www.nordicinnovation.net   Update on Nordic Risk Capital Market EU Finance Day 23/4 - Oslo
    2. 3. <ul><li>Innovation Policies </li></ul><ul><li>Venture Capital </li></ul><ul><li>Borderless region </li></ul><ul><li>Functional Food </li></ul><ul><li>Creative Industries </li></ul><ul><li>Commercial Networks </li></ul><ul><li>Innovative Tourism </li></ul><ul><li>Innovative Building </li></ul><ul><li>Micro- and Nano technology </li></ul><ul><li>Environmental Technology </li></ul><ul><li>Technology Foresight </li></ul><ul><li>Food Safety </li></ul>On-going Programmes Nordic Innovation Centres´ two main objectives: 1. Stimulate increased Nordic innovation 2. Promote a borderless Nordic region  “ a single, inner market”
    3. 4. The Nordic Council of Ministers Business, Energy and Regional affairs - Ministers of trade & industry Nordic Innovation Centre EK-NE/N + EK-NE/E - Committees of senior officials Nordic cooperation – Nordic Council of Ministers
    4. 5. NICe’s view on innovation <ul><li>Innovations are important in all sectors </li></ul><ul><li>Active participation from the entire innovation system necessary. </li></ul><ul><ul><li>(business sector, market, capital , knowledge communities, and public sector) </li></ul></ul>
    5. 6. Focus on Nordic Risk Capital NICes overall objectives: 1. To stimulate the creation of new jobs and industries in the Nordic region 2. To remove barriers and to strengthen the Nordic private equity market. >> Facilitating cross-border investments >> Attracting foreign capital >> Increasing level of Nordic cooperation >> Increasing level of Nordic experience sharing Why important?
    6. 7. Because: Private equity financed companies grow faster Source: SVCA Report ”Private equity backed portfolio companies’ development”
    7. 8. Relative Market Sizes (% of GDP) in 2007 VC investment per GDP in 2007 in Europe and selected other countries and regions (by country of portfolio company approach)
    8. 9. <ul><li>Nordic countries relatively well performing (VC per GDP) </li></ul><ul><ul><li>But far behind market leaders </li></ul></ul><ul><li>Foreign investments regulatory improvements in recent years </li></ul><ul><ul><li>Double taxation for direct investments mostly eliminated in Nordic countries </li></ul></ul><ul><ul><li>Still various legal obstacles to overcome, especially regarding cross-border investments in funds that invests in companies </li></ul></ul><ul><li>Different fund structures and regulatory frameworks </li></ul><ul><ul><li>cause legal uncertainty >> hamper foreign investments </li></ul></ul><ul><li>Still too fragmented (across borders, sectors, stages) </li></ul>The Nordic Risk Capital Market – room for improvement
    9. 10. <ul><li>Dialogue and willingness to cooperate between the countries </li></ul><ul><li>Political backing – well functioning venture market recognized as one of the cornerstones of the Nordic innovation system </li></ul><ul><li>National differences create opportunities to learn from each other </li></ul><ul><ul><li>Finland has taken many steps to remove legal obstacles and uncertainties </li></ul></ul><ul><ul><ul><li>Double taxation for foreign investments in Finnish funds mostly eliminated </li></ul></ul></ul><ul><ul><li>New fund of funds structure launched by FII which blends private and public capital (60/40) </li></ul></ul><ul><ul><ul><li>Governmental VC fund attracting private investor </li></ul></ul></ul>The Nordic Risk Capital Market – cooperation
    10. 11. NICe – a true Nordic catalyst <ul><li>Public initiatives are vital for the development of well functioning venture capital markets </li></ul><ul><li>NICe is a true Nordic institution without national agenda or considerations </li></ul><ul><ul><li>functions as a complement to the national public organizations and a facilitator for Nordic cooperation. </li></ul></ul><ul><ul><li>NICes initiatives involves private and public market players, Nordic ministries, legal experts and academia </li></ul></ul><ul><ul><li>Has engaged Nordic Investment Solutions, a Nordic advisory firm within private equity, as competence partner and coordinator </li></ul></ul>
    11. 12. Developing the food chain of capital <ul><li>For the development of a well functioning common Nordic venture </li></ul><ul><li>capital market it’s vital to focus on all stages of the so called food </li></ul><ul><li>chain of capital. </li></ul><ul><li>NICe therefore has and will execute initiatives within: </li></ul><ul><ul><li>Seed & Early Stage </li></ul></ul><ul><ul><li>Venture Capital (here defined as expansion) </li></ul></ul>
    12. 13. Downloads available at www.nordicinnovation.net Background: Performed studies since 2004 - >> >> NICe has executed a number of inititiaves within the expansion phase of venture capital.
    13. 14. The Nordic Venture Capital Forum A reference group with leading public and private market players was formed for the venture capital initiatives. Representatives from the private market: HealthCap (S) - Anki Forsberg, Partner and Chief Administrative Officer CapMan (FI) - Petri Niemi, Senior Partner and Head of Technology BaltCap (EST ) - Peeter Saks, Managing Partner Northzone Ventures (N) - Tellef Thorleifsson, General Partner Representatives from public market players: Sjätte AP-fonden (S) - Cecilia Gross Friberger, Portfolio Manager Venture Capital Vaekstfonden (DK) - Christian Motzfeldt, CEO Tredje AP-fonden (S) - Claes de Neergaard, CEO, Industrifonden, Chairman New Business Venture Fund (IS) - Jon Steindor Valdimarsson,  CEO,
    14. 15. <ul><li>Nordic best practice studies, 2006 & 2007: </li></ul><ul><li>Lacked structures to compete successfully with foreign funds. </li></ul><ul><li>Limited Partnership seen as the only appropriate vehicle for venture capital funds by international investors. </li></ul><ul><li>Lack of favorable tax treatment and trust </li></ul><ul><li>Investors expected full tax transparency </li></ul><ul><li>All the Nordic countries (except Denmark) had disfavourable legal and/or tax related issues </li></ul><ul><ul><li>creating obstacles for international investors. </li></ul></ul><ul><li>VAT on management services to the fund – non-recoverable </li></ul>Obstacles to Nordic Venture Capital Funds <ul><ul><li>Mannheimer Swartling </li></ul></ul><ul><ul><li>Borenius & Kemppinen </li></ul></ul><ul><ul><li>Wikborg, Rein & Co. </li></ul></ul><ul><ul><li>Plesner </li></ul></ul><ul><ul><li>Deloitte </li></ul></ul><ul><ul><li>Nordic Investment Solutions </li></ul></ul>
    15. 16. <ul><li>Nordic Council of Ministers > appointed Task Force to follow up on the recommendations of the NICe reports. </li></ul><ul><li>2008 study: </li></ul>THE NORDIC RISK CAPITAL MARKET A Review to Support Nordic Venture Capital Policy by Professor Markku Maula TKK Helsinki University A Review to Support Nordic Venture Capital Policy
    16. 17. <ul><li>Must work toward fully integrated market. </li></ul><ul><ul><li>Cross-border, -sector, -stage </li></ul></ul><ul><li>Need higher levels of investments in early growth stages. </li></ul>Problem: Institutional investors not investing in start-ups due to high risk and long-term yield expectations >> creating an equity gap Recommendations for further development
    17. 18. <ul><li>Work toward Mutual Recognition of fund structures by removing remaining legal barriers and uncertainty , and eliminate the need for permanent establishments. </li></ul><ul><ul><li>>> Attract foreign investments and facilitate cross-border investments </li></ul></ul><ul><li>Complimentary measures </li></ul><ul><ul><li>>> Nordic Venture Fund Program, Business Angels matching, etc. </li></ul></ul><ul><li>Problem: </li></ul><ul><li>Variations in national fund structures and regulatory environments cause uncertainty </li></ul><ul><ul><li>>> obstacle for cross-border fund of fund investments </li></ul></ul>Recommendations for further development
    18. 19. <ul><li>Feb 09: Nordic Council of Ministers: Committee of Senior Officials EK N/NE </li></ul><ul><ul><li>Asked Nordic Innovation Centre (NICe) and Finnish Ministry of Employment and Economy to gather public VC investors to discussion. </li></ul></ul><ul><ul><li>NICe to update status in each country </li></ul></ul>Recent developments
    19. 20. <ul><li>Seed & Early stage: </li></ul><ul><ul><li>Nordic Seed Capital Initiative 2009 now in execution </li></ul></ul><ul><ul><li>Formation of the Nordic Seed Capital Forum </li></ul></ul><ul><ul><li>Writing of “Challenges and Initiatives for the Nordic Seed Stage” </li></ul></ul><ul><ul><li>Nordic Seed Capital Summit, Stockholm, June 4 </li></ul></ul><ul><li>Venture Capital: </li></ul><ul><ul><li>Follow-ups now being planed: </li></ul></ul><ul><ul><li>Legal issues regarding the establishment of funds </li></ul></ul><ul><ul><li>Mandates for national investors – still an obstacle? </li></ul></ul><ul><ul><li>Funding for private venture capital firms – a potential Nordic program? </li></ul></ul><ul><ul><li>Nordic Public Investor Summit, Copenhagen (September?) </li></ul></ul>Going forward – NICe’s current and planed initiatives NICe will continue to focus on Venture Capital and on Seed & Early Stage
    20. 21. <ul><li>Could a Nordic inititive be created to facilitate increased Nordic cooperation, increased visiblity for the seed stage and and a joint Nordic voice towards political decsion makers? </li></ul>Can we establish a Nordic seed community that can interact efficiently with entrepreneurs, international players and the venture capital community?
    21. 22. Nordic Seed Capital Initiative Building blocks: Nordic Seed Capital Forum – a reference group for the initiative and for the Nordic seed segment towards decision makers with key organizations from each country as participants Challenges and Initiatives for the Nordic seed stage - a description of joint challenges and suggested solutions and initiatives Nordic Seed Capital Summit in Stockholm, June 4 Nordic Public Investor Summit in the planning Owner of the initiative Coordinator Nordic Seed Capital Forum
    22. 23. <ul><li>June 4 th , Stockholm </li></ul><ul><li>First gathering of Nordic public and private seed stage investors </li></ul><ul><li>Facilitate discussions among investors and among investors and policy makers </li></ul><ul><li>Nordic seed stage report: “Challenges and Initiatives for the Nordic Seed Stage” </li></ul><ul><li>www.nordicinnovation.net/seed </li></ul>Nordic Seed Capital Summit
    23. 24. <ul><li>Nordic legal project report (TBC) </li></ul><ul><li>Description of national regulatory changes since last report </li></ul><ul><li>Description of planned regulatory actions </li></ul><ul><li>Update on legal and taxation obstacles for foreign investments in nordic risk capital funds </li></ul><ul><li>Nordic and national recommendations </li></ul><ul><li>Description of mandates of national public funds </li></ul><ul><li>Changes in mandates from 2004 </li></ul><ul><li>Description of obstacles caused by mandates of public funds </li></ul>In the planning Update
    24. 25. In Summary <ul><li>Well functioning risk capital market essential for innovation and job creation </li></ul><ul><li>More integrated market (sector, border, stage) needed to foster high-growth Nordic companies </li></ul><ul><li>Removal of legal barriers and increased Nordic cooperation will stimulate cross-border investments and attract foreign competent capital </li></ul><ul><li>NICe’s focus is on the food chain of capital with initiatives within: </li></ul><ul><ul><li>Seed & Early Stage </li></ul></ul><ul><ul><li>Venture Capital </li></ul></ul><ul><li>>> NICe is a true Nordic facilitator developing Nordic markets </li></ul>
    25. 26. Thank you for your attention! Questions may be sent to: Hans Christian Bjørne [email_address] www.nordicinnovation.net