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Dilutive & non dilutive funding options in Portugal


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Dilutive funding and non dilutive funding options in Portugal for high growth/high risk startups in Portugal: the state of the art.

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Dilutive & non dilutive funding options in Portugal

  1. 1. From science to technology: Options for Funding high potencial new ventures in Portugal ECS, University of Minho, 06.01.2015, Braga. Gonçalo Amorim Program Director, MIT Portugal – Innovation & Entrepreneurship Initiative ISCTE-IUL Business School
  2. 2. Typical tech transfer challenges: •  Can my “research” be turned into an (enabling) techno logy? •  What problem can (I help) solve? •  What industry(ies) may be interested in it? •  How can I “package” it into a solution (offer)? •  What prototypes do I need to design / test? •  How can I fund these activities? •  What is the size of the opportunity? •  How do I protect the IP & my future business? © Building Global Innovators, 2015.
  3. 3. Typical tech transfer challenges (II): •  When do I incept the company? •  Who is the founding (dream) team? Skillset? •  How can I bring key advisors and KOLs? •  Can I validate the market? •  How much further R&D do I need? •  How much funding? •  How much will I charge for my product? •  What (product) features are most important? •  How do I devise a (credible) Go to Market plan? •  … © Building Global Innovators, 2015.
  4. 4. Great, but I do I get some funding? To conduct basic activities to address those challen ges you have several options: 1.  Non dilutive funding: •  Suitable for initial stages, i.e. validation, finding your market, defining product etc. 2.  Dilutive: •  Requires company formation, full time team, should enable faster growth. NOTE: Investors do not fund “science” per say, nor product R&D. They fund companies, i.e. their business prospects. © Building Global Innovators, 2015.
  5. 5. Typical funding sources in Portugal: DISCLAIMER: always think big, but make sure to start small (taking a baby step ap proach is always the best route). 1. Non dilutive: •  University funded projects •  P2020 grants (eg. Former QREN), •  H2020 SME instrument, “Compete” funded programs (FP7 consortia etc) •  Other research / EU science grants •  Prize awards (R/D institutions & private corporates, eg. Novo Banco inovação etc). •  Best option: paying clients (samples, trials, pilots,..) © Building Global Innovators, 2015.
  6. 6. Typical funding sources in Portugal: 2. Dilutive (pre-seed, seed & early stage): •  Accelerators (BGI, Cohitec & Lisbon Challenge) + long tail of others ( •  Up to 300k€/venture; typ. 5% - 12% dilution for 50 - 100k€ •  Business Angels: •  Typically 50k€ to 300k€ (above that, possible but rare) •  Sample: Dueto, Shilling Capital, Faber ventures… •  30+ entities ( •  Early stage VC’s (sample): •  Typically 200k€ to 500k€ •  Public: Portugal Ventures (Call for ignition)*, Caixa Capital •  Private/CVC: ES Ventures, EDP ventures, Novabase Cap. * - For more information on Ignition partners:© Building Global Innovators, 2015.
  7. 7. Typical funding sources in Portugal: Final comments on dilutive funding: •  Early stage risk capital invested in PT/ year:~€30 Million (growing fast) majority of allocated € to early stage BA/VC is public •  Caveat: there is no later stage VC’s in Portugal, i.e. Rounds above 1 million are extremely rare (sub 5 per year) •  Truly Smart capital is seldom, but increasing •  Option: It is becoming more common to do early stage funding in PT followed by international series A (syndicates) INRO USD$ 2 to 5M •  DO NOT go international before you get some home traction in terms of critical milestones (product, BA/VC funding or other critical) •  Looking for funding is a FULL TIME activity, can take you up to 18 months or more to get funded, depending on stage of development •  Specialized accelerators are the gold standard to get you started in the right path •  Good access to capital, especially human is absolutely critical in the process of building your venture (in initial stages even more than $$). © Building Global Innovators, 2015.
  8. 8. Typical funding sources in Portugal: Interesting sources on funding & portfolio Co’s: •  Portugal Ventures annual report (2013): • _vb.pdf •  Caixa Capital Funds: •  For list of investors and other in PT: •  Portugal Ventures portfolio: •  Building Global innovators alumni companies: © Building Global Innovators, 2015.
  9. 9. Gonçalo Amorim Executive Director, BGI SA MIT Portugal – Innovation & Entrepreneurship Initiative ISCTE-IUL Business School
  10. 10. Building Global Innovators © Accelerator: •  Entrepreneurs & Innovators (tech Start-up / Spin-out under 5y, <2.5M€ turnover/y) •  Seed & early stage investors: Angel, VC & Corporates •  Stakeholders: •  Universities (tech transfer, University’s 3rd mission, impact) •  Governments (jobs, growth, taxation) •  SMEs and Corporations (open innovation) •  A deep innovation technology Accelerator for new ventures Target audiences:
  11. 11. In a nutshell: - International accelerator, based in Lisbon & Cambridge (US) - Held once a year (6th ed. launched March 15th) - Over 1,150 hours of expert mentoring per startup / edition - 4 Market-applications, B2B focused on verticals: 1. Medical Technologies & Health IT 2. Smart cities & Industrial Tech 3. Enterprise IT & Smart Data, and 4. Ocean (blue) Economy.
  12. 12. 6th Edition Key Dates: March 2nd Submissions open May 24th June 8th Deadline for submissions July 16th Batch of 20 ventures announcement July 27-31st e-teams I bootcamp (Lisbon @ ISCTE-IUL) November 19th Demo Day I (Lisbon @ ISCTE-IUL) November 20-21st e-teams II bootcamp (Lisbon @ ISCTE-IUL) February, 2016 Demo Day II (Lisbon, venue TBD) Spring 2016 e-teams III bootcamp (Cambridge / US @ MIT)
  13. 13. BGI aims to help its startupers to: •  Identify from local to global value propositions and accelerate business ventures leveraging on differentiated technologies •  Facilitate scaling up via series A Venture financing & connecting global Innovators to global Investors. 13
  14. 14. 1 4 Copyright 2009-2010 Audax Center for Entrepreneurship ISCTE-IUL 1 4 Mission statement: BGI facilitates value creation & early stage launch of tech-based newCo's by helping Innovators focusing on market facilitation and development by bringing business acumen to entrepreneurs and connect entrepreneurs to the international venture finance community. Mission:
  15. 15. 5 Building Global innovators© Where does BGI stand internationally? Aprox. US$40 million raised Source: Adapted from the Economist, Special Report “Tech Startups: A Cambrian moment”, Jan. 18th 2014.
  16. 16. Developed over a 5 year collaboration with MIT Portugal* in early stage deep innovation commercialization (* - inspired on Deshpande’s model). ›  BASF ›  Galp ›  Amorim ›  Nokia ›  Cisco ›  Efacec + ›  Sonae ›  PT ›  BRISA ›  Odebrecht ›  Google ›  ... INPUT: Tech-based solutions aimed at Enduring global needs OUTPUT: Successful Ventures that generate societal & economic value CUSTOMER VALIDATIONS (B2B): •  1.800+ Entrepreneurs •  500+ Applications •  101 selected (inc. Ed5 batch) •  300+ globalpreneurs •  68 active startups •  >32M€ in venture financing. BGI´s unique acceleration model: + +
  17. 17. BGI Alumni (sample):
  18. 18. 6
  19. 19. Financing raised by BGI alumni: Case studies: •  Veniam works (Smart cities): closed series A $US 4.9 million •  Movvo (Smart cities): closed series A $US 2 million
  20. 20. BGI Alumni (sample): 10
  21. 21. Para informação e registo.