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EIF Support of Tech Transfer and Intellectual Property - And how we want to do more


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Presentation by Graham Cope, European Investment Fund (EIF) held at the Nordic Seed Capital Summit in Stockholm, 16 May 2011.

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EIF Support of Tech Transfer and Intellectual Property - And how we want to do more

  1. 1. Graham Cope European InvestmentEuropean Investment Fund Fund EIF support of Tech Transfer and Intellectual Property And how we want to do more This presentation was prepared by EIF. Any estimates and projections contained herein involve significant elements of subjective judgment and analysis, which may or may not be correct.
  2. 2. €5.4bn Net Equity Commitments Venture & Growth Capital Portfolio across Europe at 31.12.2010 EUR m Lithuania 40 Austria 54 Luxembourg 21 Belgium 82 Malta 8 Bulgaria 13 Netherlands 109 Cyprus 7 Norway 25 Czech Republic 28 Poland 92 Denmark 95 Portugal 155 Estonia 7 Romania 36 Finland 115 Slovakia 4 France 768 Spain 423 Germany 558 Sweden 280 Greece 15 Switzerland 81 Hungary 16 Turkey 274 Ireland 89 United Kingdom 1306 Italy 267 Other & Non EU 396 Latvia 36 Nordic Region (total):EUR 515m EU 27 EU Candidate Countries1 EFTA/EEA
  3. 3. Technology Transfer - Converting Research into Products for the Market R&D Technology Transfer Marketable Product “technology IP” “prototype IP” University / Market Research Spin-out Organisation Licensing IP / Idea Collaboration (contract research,…) Technology Transfer is the process which uses these 3 channels to convert scientific findings from research organisations into commercial products2
  4. 4. ElFs Tech Transfer Experience  Since 2005, EIF has been able to invest more and more resources to understand Tech Transfer, to create awareness and to develop new TT initiatives with leading research universities  Focus is on research organisations which are leaders in their respective fields and act in an entrepreneurial environment  Accelerated process through framework agreements (covering issues such as company valuations, shareholder structure,…)  Several transactions already, in which EIF played a key role  Eager to do more…3
  5. 5. EIF Tech Transfer Transactions Karolinska Development Chalmers Innovation • EUR 26.7 m • SEK 170 m • Signed Nov 2009 • Signed July 2008 • Co-investment fund, investing • Investing in start-up companies alongside Karolinksa originating from Chalmers Development in life science University and incubated by the spin-outs throughout Chalmers Innovation incubator Scandinavia in GothenburgUMIP Premier Fund Imprimatur (JEREMIE: development• GBP 32m fund objective)• Signed April 2008 ongoing transaction• Fund, managed by MTI, invests • EUR 20,4m in university spin-outs • Expected Signature 2010 originating from the University of • Seed & Start-Ups / Tech Transfer Manchester in Latvia • Fund to be managed by theIP venture fund UK local Imprimatur team in Riga• GBP 31m fund• Signed September 2006• Fund invests 25% of all financing rounds of IP group Leuven CD3 (Centre for spinouts, originating from more Drug Design and Discovery) than 10 UK universities • EUR 24m fund • Signed Mid 2006 • Financing early stage drug development projects originating from Leuven and 4 elsewhere in EU
  6. 6. Manchester the Largest UK University Research BudgetManchester University / UMIP Premier Fund ■ 10 year Limited Partnership. ■ Managed by VC firm: MTI partners ■ GBP 32 m raised. 18 months between first pitch to EIF and first closing in 4/20085
  7. 7. IP Group: Bringing together 10 Universities - 74 Spin-outs in 3 years IP Venture Fund UK ■ Co-investment fund (seed, post-seed financing ■ Critical mass reached through a network of universities ■ Liquidity vs listing Deal flow and critical mass6
  8. 8. Case Study: Chalmers Innovation Starting point: a proven tech transfer and incubation process, creating approx. 10 start-ups per year Process steps Pre-Incubation Incubation “Alumni” Start-up companies projects ~6m 24-36m Milestone Entrepreneurial mind Formed company Repetitive business / Deliverable Large potential Validated business Developed organisation Unique idea CEO Board of directors Control of IPR Business plan Secured longer term Technology based Financial plan finance7
  9. 9. Case Study: Chalmers Innovation The fund, managed by an enlarged incubator team, invests in all steps of the process EIF Co-investors “Fund” Seed Investors Management team •Investments at commercial terms Federal funds •Incubator professionals •Investments in existing TTO start-ups Regional funds (industrial background) and new start-ups (both university IP Other public/private funds •Investment professionals based spin-outs as well as start-ups attracted and grown by the BAs, VCs, … •Maximum autonomy incubator) “Pre-seed funding” “Seed funding” “Post-seed funding” Pre-Incubation Incubation Alumni companies Tech Transfer process Indicative EUR ~50k EUR 200-500k EUR 1-3m amounts8
  10. 10. Case Study: Chalmers Innovation Investment case for EIF  Size and quality of deal flow  The university generates an important flow of innovations  The region is a well functioning entrepreneurial ecosystem  The TTO delivers  Breadth and depth of team  Track-record in developing start-ups  Invests before and at company creation  Potential to have a significant impact  Develop start-ups better and faster  Capture a larger share of the value created9
  11. 11. Lessons Learnt 5 Years on  Clear funding gap persists  Tech Transfer is different to VC and has its own set of rules  Not just spin-outs in the story but also licensing  Long-term partnerships with research centres: build trust, no individual entry valuations, ex ante agreements, no dilution -- Privileged access to deal flow and “Bears’ hug”  Increasing interest from private co-investors but still room for improvement  Longer time-horizon for business development and lead- time  Growing policy-maker focus10
  12. 12. Knowledge Transfer Strategic Partnership  First initiative to address challenges and widen the reach and scopePartners  Signed in Rome - 16 June 2010  Creation of joint Working Group between EIF/EIB, CDC (France), (CDP – Italy), (CDTI - Spain), Innovationsbron (Sweden), KfW- Bankengruppe (Germany) & Veraventures (Finland)  Aim of like-minded Partners is to:  Support the emergence of European and national Knowledge Transfer Infrastructures  Accelerate transfer of European research and technology to the market  Facilitate a well functioning Knowledge Transfer and Intellectual Property economy  Encourage more open and transparent marketplaces for Intellectual Property  Exchange best practices and potentially to analyse investment opportunities jointly11
  13. 13. The Growing Importance of Fund-of-Funds management (selected examples)  ERP (launched in 2004) Co-investment 50/50: EIF/ERP (administered by German Ministry BMWi)  Size: € 1bn - € 642m committed in 20 funds Copyright ERP  NEOTEC: Spanish Technology Fund-of-Funds (launched in 2006) Tech fund in partnership with CDTI (TMT, ICT, cleantech, biotech and LS)  Size: € 183m - € 117m in 11 Funds and Co-investment Agreements  Istanbul Venture Capital Initiative (launched in 2007) Turkish generalist VC investment vehicle for institutional investors  Size: € 160m - 2 funds signed for a total of € 21m  Portuguese Venture Capital Initiative (launched in 2008) Generalists funds, ICT, Life Sciences, Healthcare, Environmental & Energy Technology  Size: € 111m – 2 transactions signed for a total of € 30m  UKFTF: UK technology Fund-of-Funds (launched in 2010) Launched by the UK government and advised by EIF  Size: £200m at first closing to be invested in Funds targeting UK start-ups and growth businesses in the high tech sector – 3 investments signed for £28m12 Public Private Leveraging of EIF Capacity and Experience
  14. 14. How do we see the Nordic market? Many strengths Worrying weaknesses  High Quality University &  Difficult market conditions Research Institutions to attract private investors  Mature Market with  Withdrawal of certain experienced investment professionals fund managers  Track records and  Withdrawal of certain Success stories Pension Funds  High cross-border  Global competition for collaborations levels investment flows  Strong entrepreneurial  Talent loss environment  Missed opportunities  Many investment opportunities13
  15. 15. Contacts European Investment Fund 96 boulevard Konrad Adenauer L-2968 Luxembourg Tel.: (+352) 42 66 881 Fax: (+352) 42 66 88 200 Jacques Darcy, Head of Technology Transfer & Intellectual Property – Graham Cope, Head of Region, Northern Europe Business Development – g.cope@eif.org14