ECIA - Presentation by Edgar Garcia Casellas (Barcelona 6 juny 2013)

1
DESENVOLUPAMENT
EMPRESARIAL
ICEC
This initiative is financed under the Competitiveness and
Innovation Framework Programme (CIP) which aims to
encourage the competitiveness of European enterprises.
ECIA Policy Learning Platform
Barcelona, 6th of June 2013
Edgar Garcia,
ECIA coordinator of the WP on Access to Finance
Catalan Institute for the Cultural Companies (ICEC)

2
DESENVOLUPAMENT
EMPRESARIAL
ICEC
First results from ECIA’s WG on
Access to Finance thematic paper

3
DESENVOLUPAMENT
EMPRESARIAL
ICEC
ECIA’s WG on Access to Finance members
Edgar Garcia Casellas – Coordinator of the WG (ICEC)
Michela Michilli – Concrete Action FAME (FILAS)
Marija Popovic - Concrete Action CI-Factor (EDC)
Miguel Rivas – CLAND, Audiovisual and Digital Cluster Andalucía
Jenny Kornmacher - Hamburg Kreativ Gesellschaft Gmbh
Ragnar Siil –Estonia Ministry of Culture
Henri Monceau – Cabinet of the Minister for Economy, Wallonia
Thierry Baujard – Media Deals
Johanna Bolhoven – Creative England

4
DESENVOLUPAMENT
EMPRESARIAL
ICEC
Current framework
• The on-going financial and economic crisis has an important impact on the
adoption of public funding initiatives for the CCIs .
• Growing acknowledgement of the economic performance of the cultural and
creative sectors.
• The cultural and creative sector can become the basis for economic recovery
and potential growth in Europe.
• The sector’s role as an upcoming attraction for private funding should be
equally supported and enforced.
• The digital shift places the creative sector in the need to reassess business
models.

5
DESENVOLUPAMENT
EMPRESARIAL
ICEC
Key issues and challenges on Access to Finance
Creative sector’s main challenge
• To find innovative business models, which would allow them
to achieve investment readiness within the new digital
environment.

6
DESENVOLUPAMENT
EMPRESARIAL
ICEC
• There is a need of a new understanding of the creative sector itself.
• NOT a separate entity from other business sectors!
• Existing financial tools for SMEs can and should come into use for the
support of creative industries.
• And tailor-made solutions should come up only if inadequacy of existing
schemes is diagnosed!

7
DESENVOLUPAMENT
EMPRESARIAL
ICEC
• There is a a need for private initiatives offering a better access to finance to
the sector.
• Investments in the CCIs should be encouraged in a three-fold way:
– to train CCIs to be more investment-ready
– to raise awareness on the profits of intangible assets among investors
– to improve IP valuation

8
DESENVOLUPAMENT
EMPRESARIAL
ICEC
• There is a a need to integrate innovation and multiply the impact of a
relatively low public funding.
• Public sector should take into consideration new emerging trends of financing
small creative industries, especially at an early stage.
– microcredit instruments
– P2P (peer to peer) lending
– crowdfunding
• Cooperation of public bodies with crowdfunding platforms could be achieved
through a regulatory framework promoting such initiatives from short-term
project-based to long-term business-based.
• Introduction of financial engineering instruments: matching public grants
with privately raised funds in order to ensure the financial sustainability of
CCIs.

9
DESENVOLUPAMENT
EMPRESARIAL
ICEC
• There is a a need for internationalization of the creative sector.
• Although many SMEs are already international, the lack and difficulty of
accessing international investors limit success of cross border strategies.
• Investment models involving neighboring countries should be developed.
CA FAME is doing a technical analysis on the viability of a Pan-European VC fund.

10
DESENVOLUPAMENT
EMPRESARIAL
ICEC
Assessment of current policies and policy initiatives
Examples of policies and initiatives
Cross-
sectoral
Invest.
Awareness
Alternative
financing
Leverage
Cross-
border Level
Score
(1-5)
MEDIA Production Guarantee Fund
Pan European Guarantee for film production
x x
x
EU 4*
Belgian Tax shelter for films
Key finance instrument for film finance
x x
x
Nat. 4*
OSEO Guarantee
Offer risk mitigation to innovative SME
x x Nat. 3
Film London PFM (Production Finance Market) http://
filmlondon.org.uk/PFM
Key finance market supported by MEDIA
x x
x
EU 4*
EASY Early stage investors
www.earlystageinvestors.org/
Pilot project for cross border investment
x x x
x
EU 2
FILAS VC Fund http://www.filasinternational.eu/
Regional fund for CI
x X Reg. 3

11
DESENVOLUPAMENT
EMPRESARIAL
ICEC
CIM Venture
Pan European CI Investment Fund
x x
x
EU 1
Caisse des Depots VC fund „Heritage and Creation“
Development fund for established CI
x Nat. 3
VC Fonds Kreativwirtschaft Berlin
http://www.ibb-bet.de/vc_fonds_kreativ.0.html?&L=1
Public private fund focussing on CI
x x Reg. 4*
European Regional Development Fund (ERDF)
Key regional fund
x x EU 3
How to grow platform
CI Online platform
x x
x
EU 3
European Angels Fund (EAF)
http://www.eif.org/what_we_do/equity/eaf/index.ht
m
EIF co angel fund
x x x EU 1
Enterprise Investment Scheme (EIS
http://www.hmrc.gov.uk/eis/
Key UK scheme to support innovation
x x x Nat. 4*
Seed4Start www.seed4start.org
Pilot project on cross border investment
x x x
x
EU 2

12
DESENVOLUPAMENT
EMPRESARIAL
ICEC
Nordic Game Program
http://nordicgameprogram.org/
Key programme for Video Game
x
x
Nat. 4*
INTERREG
Key interregional funding
x x x EU 3
JEREMIE
http://www.eif.org/what_we_do/jeremie/index.htm
Co investment scheme
x x x EU 2
European Progress Microfinance Facility
http://ec.europa.eu/social/main.jsp?
catId=836&langId=en
Pan European Micro loan
x x x x x EU 2
CIP Microcredit Guarantee Window
http://www.eif.org/what_we_do/microfinance/microc
redit_guarantees/index.htm
Pan European Micro credit guarantee
x x x x x EU 2
Entrepreneurship and Innovation Programme (EIP)
http://ec.europa.eu/cip/eip/index_en.htm
Support programme for innovative SME
x x x EU 2
SME Guarantee Facility
http://ec.europa.eu/enterprise/policies/finance/cip-
financial-instruments/index_en.htm
x x Nat 2

13
DESENVOLUPAMENT
EMPRESARIAL
ICEC
First steps towards a benchmarking: the best rated practices
and policy initiatives
Detection of already undertaken policies and upcoming policy initiatives in the field
of access to finance for CCIs, which have been be reviewed according to their
effectiveness in replying to one or more of the key issues identified.
To explore and analyze key schemes through:
their goals, results and context
the role of the private and public sector
their cross sector/spill over character
their replication potential
the success or failure factors

14
DESENVOLUPAMENT
EMPRESARIAL
ICEC
First steps towards a benchmarking: the best rated practices
and policy initiatives
draft list of policy examples
MEDIA Production Guarantee Fund (EU)
OSEO Guarantee (FR)
Cultur-Ondernemen Guarantee Fund (NL)
FILAS VC Fund (IT)
Caisse des Depots VC Fund “Heritage and Creation” (FR)
VC Fonds Kreativwirtschaft (Berlin)
Nordic Game programme (Nordic countries)
Production Finance market (London Film Festival / UK)
Belgian Tax shelter for audiovisual production (BE)
Nordstarter – Hamburg Kreativ Gesellschaft (GE)
Repayable Grants – ICEC (CAT)
CIM Venture (FI)

15
DESENVOLUPAMENT
EMPRESARIAL
ICEC
Case study 1: VC KreativWirtschaft Berlin Fund
 For Berlin based creative industries companies
 Investments areas: film, radio, TV, publishing, music, entertainment, advertising,
fashion, design, architecture, multimedia, games, software, art and culture.
 Fund volume: 30M EUR
 50% of the funds by the Investitionsbank Berlin, and 50% by the EU Regional
Development Fund (ERDF)
 The VC fund only provides co-financing if private investors cover at least 50% of
the respective financing round.
 Amount invested per round: average 1.5M EUR
 Maximum of 3M EUR per company over multiple rounds
 The VC fund only holds minority shares in the portfolio companies
 Particularly supporting start-ups
 Deal flow in arts and culture identified as lower than in multimedia, games, software,
music and TV

16
DESENVOLUPAMENT
EMPRESARIAL
ICEC
Case study 2: Production Finance market (London)
 two-day annual event at the BFI London Film Festival
 connects international producers and financiers to encourage new film financing
relationships
 Financiers: mature and leading financiers (UK and internat.) and public funding bodies
 Producers: producers (UK and international) with a significant production track
record or with a highly promising project aimed at the international theatrical market,
with a budget above €1M (not a ‘micro-budget’ film market)
 The uniqueness of the PFM lies in the focus on the financing and not the co-
production part, involving real financiers.
 The 2012 market attracted almost €305M of production value, and leading equity,
hedge fund, tax, banking, and public and broadcaster financiers
 To date, some 50 or more films and companies have benefited directly from the PFM
 The 2013 edition will bring more than 100 producers, financiers and new forms of
investment together

17
DESENVOLUPAMENT
EMPRESARIAL
ICEC
 Following study on role of banks in the film industry
 Once film projects are financed, there is a need to cash flow the pre sales and subsidies
contracts (bridge financing)
 2 specialized public film guarantors (France and Spain) have been awarded 8M EUR for a
pilot project till end 2013
 Results till now: 28 bank loans have benefited from this guarantee, representing a total
loan amount of over EUR 38 M, for the production of 21 films in 9 different countries.
 The MPGF has provided guarantees and therefore facilitated loans in many European
countries that until now could not access bridge financing.
 The difficulties encountered are:
Lack of expertise from banks in the sector of film finance
Banks are very local and do not look at projects outside region or country
Size of loans is often too small making the deal commercially not interesting for banks
leading to a limited investment of resource in the sector
Project lending VS company lending makes it difficult for credit committee to assess risk.
Case study 3: MEDIA Production Guarantee Fund (MPGF)

18
DESENVOLUPAMENT
EMPRESARIAL
ICEC
First steps towards a benchmarking: a methodology
Impact Assessment – starting 3 June
Online survey + telephone follow up
Two target groups:
The Initiator of each funding scheme
At least two beneficiaries of each funding scheme

19
DESENVOLUPAMENT
EMPRESARIAL
ICEC
Impact Assessment
Quantitative survey: estimation of number of projects supported, amounts invested
Qualitative:
 Sector transversality
Aim > assess the support of creative industries in generic schemes
 Key success factors
Aim > compare the perception of “success” and “fail” for initiators and beneficiaries and suggest
areas of improvement
 Replication potential
Aim > distinguish the geographical/ sectorial specificities from the factors allowing to multiply
the scheme in other regions/ creative sectors
Other areas of assessment:
• Improvement of public policy;
• Mobilization of private finance;
• Long term impact;
• Social or environmental impact

20
DESENVOLUPAMENT
EMPRESARIAL
ICEC
Conclusions of the assessment
• A fragmentation between initiatives specialised in CCIs and policies with a
larger scope is observed.
• Many of the not sector-specific existing tools have proven very effective in
all fields of application, and CCI stakeholders should be encouraged to make
good use of them.
• Investment readiness and awareness-raising schemes, as well as financial
leverage instruments to support risk mitigation and exchange of expertise,
have been already largely implemented in all levels (EU, national and regional).
• However, policy-makers are aware of the need to introduce and further
support such initiatives.
• In the context of such existing initiatives, the spotlight should be henceforth put
on IP assets valuation.

21
DESENVOLUPAMENT
EMPRESARIAL
ICEC
Other relevant conclusions related to Access to Finance
• Despite the fact that the creative sector brings together a wide variety of different
sub-sectors, the sector faces common needs… and common solutions are as
much required as sector-specific solutions.
• The most needed generic solutions to be undertaken for all creative sub-sectors
are:
– the shifting from project to business finance
– and the shifting from grants/subsidies/(credit) to equity finance
• There is a special need for cross-sectoral networking.
• Clustering and network activities are expected to bring specific expertise by
building bridges between various stakeholders: related industries, CCIs, public
bodies, investors, producers, services providers, educational and research
institutions, financial institutions and other private and government institutions.

22
DESENVOLUPAMENT
EMPRESARIAL
ICEC
• There is a need to identify the creative sub-sectors that actually dispose the
most or least advanced market intelligence and that consequently are the most
or least attractive for investors.
• A crucial point is the bond between new CCI business models and an
innovative use of ICT services.

23
DESENVOLUPAMENT
EMPRESARIAL
ICEC
Conclusions of the “Investor’s Survey” (Taking the Pulse of Investors, traditional
and alternative Finance Sources in Financing the CI) resulting from the CI-Factor
work ended in February 2013.
• 82% of the investors invest in ICT-based companies
• Thus, a thorough ICT understanding across the creative sector, is expected to
attract more investors to all creative sub-sectors.
• A challenge: to transfer knowledge through synergies between highly
innovative and less ICT-aware creative industries.
• The creative-sectors the least targeted for finance are: the performing
arts, architecture and crafts.
• Thus, its professionalization by the involvement of experienced and specialized
M&A consultants is crucial in order for cultural organizations to emerge with
new competitive and innovative business models .

24
DESENVOLUPAMENT
EMPRESARIAL
ICEC
Conclusions of the “Investor’s Survey” (Taking the Pulse of Investors, traditional
and alternative Finance Sources in Financing the CI) resulting from the CI-Factor
work ended in February 2013.
• Investors show special interest for the following sub-sectors: Software,
Games, Advertising, Film/TV programming and Publishing.
• Investors find more interest in investing in start-ups.
• Conclusion: there is a particular need to encourage these companies to
become investment-ready from an early-stage.

25
DESENVOLUPAMENT
EMPRESARIAL
ICEC
Briefing on key issues and challenges on Access to Finance
• Opening generic financial schemes to Creative Industries SME and...
• More private initiatives offering a better access to finance to the
sector (awareness and training)
• Integrate innovation and multiply the impact of a relatively low
public funding (leverage effect)
• Internationalization of the creative sector (increase revenues
potential)

26
DESENVOLUPAMENT
EMPRESARIAL
ICEC
More information about ECIA’s WG on A2F:
Edgar Garcia (WP A2F Coordinator)
edgarcia@gencat.cat
Laia Sanahuja (Project Coordinator)
lsanahuja@gencat.cat
Àlex Pi (ICEC’s Finance expert)
apih@gencat.cat

ECIA - Presentation by Edgar Garcia Casellas (Barcelona 6 juny 2013)

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to ECIA - Presentation by Edgar Garcia Casellas (Barcelona 6 juny 2013)

Similar to ECIA - Presentation by Edgar Garcia Casellas (Barcelona 6 juny 2013) (20)

More from ECIAonline

More from ECIAonline (20)

Recently uploaded

Recently uploaded (20)

ECIA - Presentation by Edgar Garcia Casellas (Barcelona 6 juny 2013)