This pr

1. BioBusiness Summer School 2015
Venture Capital
Michel Briejer
1

2. BioBusiness Summer School 2015
What is venture capital?
Venture
• High risk enterprise
• Technology based
• Relatively lengthy development trajectory
• Much money needed (millions of Euros)
• No short-term profitability or positive cash flow
Capital
• Financing in return for an equity stake (shares: co-ownership)
Sub-category of private equity
• Investments in private (non-public) companies
2

3. BioBusiness Summer School 2015
Why venture capital
3
Life of company (years)
Capitalneed(mioEuro)
University Late stage VCs
Informal investors Revenues from sales and partnering
Subsidies, “soft loans”
Early stage VCs
Bank loans

4. BioBusiness Summer School 2015
Venture capital and innovative companies
• Venture capital is an essential part of the innovation ecosystem
• Particularly important to enable transition of technological inventions
towards commercially viable products
• Almost all successful high-growth technology companies have had venture
capital at their basis to fund product development
4

5. BioBusiness Summer School 2015
VC as part of the innovation ecosystem
5

6. BioBusiness Summer School 2015
Types of VCs – by stage
Seed/early stage
• Fund size € 10-50 mio
• Limited geographical focus
• Hands-on, active, assistance in setting up and building company and further fund
raising
• Seed capital, series A-B funding
Mid/late stage
• Fund size € 50-250 mio and beyond
• Continental or even WW focus
• Mature companies, experienced management
• Supervision from a distance
• Series B-E funding
6

7. BioBusiness Summer School 2015
How a VC makes money (ROI)
Trade sale
• Sale of shares to an external buyer
• Sale of part of, or entire, company in return for cash
Initial Public Offering (IPO)
• Sale and trade of shares at a stock exchange (public trading)
• In recent years the IPO route has not been an option
Dividends (profit share)
• Do not provide the return on investment pursued, poorly compatible with pursued
financial dynamics
7

8. BioBusiness Summer School 2015
How a venture capital fund gets its money (1)
8

9. BioBusiness Summer School 2015
How a venture capital fund gets its money (2)
Party
Institutional investors (pension funds,
insurance companies, banks)
Family offices
high net worth individuals
Governments (RVO,
European Investment Fund)
Universities
Companies
9
Drivers
Return
Return, impact investment, philantropy
Stimulate innovation climate
Stimulate spin-offs, return, “valorization”
Strategic motive

10. BioBusiness Summer School 2015
How a venture capital fund works
10
Venture
capital fund
Portfolio
Value
creation
Exit
Return
Institutional
investors

11. BioBusiness Summer School 2015
The work of the VC
11
Venture
capital fund
Portfolio
Value
creation
Exit
Return
Institutional
investors
Fundraising Selection
Active support
Active support

12. BioBusiness Summer School 2015
Venture capital - fund structure
Most funds have a similar set-up, typically:
• Closed end: fund ends after 10 years (+2)
• Fund investors (limited partners) commit money, and money is called pro
rata for each investment/round
• Fund management co-invests in fund (1%) – and hence also benefits from a
good fund performance
12

13. BioBusiness Summer School 2015
VC money is difficult to obtain
13
150+ new business plans
5-10 selected
1-2 new
Investments
PER YEAR

14. BioBusiness Summer School 2015
The quest for return on investment
A VC fund is successful if it generates a good return on investment
• Quick exit generates better return than exit after long period (IRR)
• Overall fund money multiple of >3x (or better: IRR >30%)
• Per fund portfolio of 10-12 companies 3-4 companies need to be exited with
multiple of 5-10x
How to select high-potential propositions with a prospective for good return
on investment?
14

15. BioBusiness Summer School 2015
IRR and Money Multiple
15

16. BioBusiness Summer School 2015
A VC weighs the following characteristics
Proposition
• Fit to fund focus and strategy
• Feasibility
• Realistic plan, timelines, costs
• Commercial potential
• Risks
Team
• Experience, capability and credibility
• Chemistry, trust and added value between team – VC
ROI
• Pre-money valuation: number of shares obtained for investment
• Investment round size, use of proceeds, value creation
• Exit possibilities, exit horizon, capital need toward horizon
16

17. BioBusiness Summer School 2015
What to watch for in a VC
Fund focus
Fit of VC with proposition, in terms of experience, portfolio, but also company stage
Network
Does the VC have an interesting and relevant network?
Know how and experience
Are fund managers of potential value to the company?
Chemistry
Ability of building fruitful relationship during the long-term commitment
17

18. BioBusiness Summer School 2015
Investment process and support Thuja
18
Source
Closing
Selection Analysis
Active sourcing:
• Universities
• Network
• Field monitoring
• Meetings
Passive sourcing
• Focus funds
• Investment
criteria
• Presentation(s)
• SWOT
• Business plan
refinement
• Team
• Preliminary
Investment
Proposal
Negotiation
Termsheet
Value creationDue diligence
• In-depth due
diligence
• Structuring
• Legal
documentation
• Internal approval
process
• Terms
• Valuation
• Investment
• Business plan
• Structure
• Capital need
• Syndicate
Exit
• “Hands-on”
support and
guidance
• Leverage network
• Supervisory
Board
• Connect to VCs
and business
partners
• Support business
development
• Connect to exit
parties
• Active exit
management
Investment process Support

19. BioBusiness Summer School 2015
Thuja Capital
Management of five funds
• AlpInvest Life Sciences portfolio (completed)
• Thuja Capital Healthcare Fund I & II (divestment stage)
• Thuja Capital Healthcare Seed Fund I & II (investment stage)
Team
• Harrold van Barlingen – managing partner & founder
• Michel Briejer – managing partner
• Undisclosed – partner-to-be
• Martin Solleveld – financial controller
Office: Utrecht Science Park
19

20. BioBusiness Summer School 2015
Thuja Capital Healthcare (Seed) Fund - portfolio
20
Company (location) Product Class Status
ArGEN-X (NL/B) Therapeutics Participation since 2008, IPO 2014
Bioceros (NL) Therapeutics Sold in 2011
Cavadis (NL) Medical devices (diagnostics) Participation since 2010
Cristal Therapeutics (NL) Therapeutics Participation since 2012
DCPrime (NL) Therapeutics Participation since 2010
Fabpulous (NL) Medical devices (diagnostics) Participation since 2009
Hemics (NL) Medical devices (diagnostics) Participation since 2011
Mellon Medical (NL) Medical devices Participation since 2013
NightBalance (NL) Medical devices Participation since 2011
Okapi Sciences (B) Therapeutics Sold in 2014
TheraSolve (B) Medical devices Participation since 2011

21. BioBusiness Summer School 2015
Thuja Capital Healthcare (Seed) Fund II
Geography
• The Netherlands and Belgium (mainly Flanders)
Stage
• Early stage: Seed, Series A
Technology focus: medical products
• Novel therapeutics, new formulations, novel applications
• Medical devices, medical technology, diagnostics, biomarkers
• Cross-over products
• Medical foods
21

22. BioBusiness Summer School 2015
Fundraising trends
Difficult fundraising climate (still)
• Poor financial climate does not stimulate appetite and makes investors risk averse
• Banks are faced with Basle-3, insurance companies with Solvency-2 rules which
reduces their ability to invest
• Pension funds are rethinking their investment strategy
Upcoming importance of alternative money sources
• European Investment Fund and national fund-of-funds
• Family offices and private investors
• Strategic investors
22

23. BioBusiness Summer School 2015
Contact information
23
This document neither contains an invitation or offering of securities, nor should it be regarded as an investment advice. This document may not be
reproduced or (re)distributed in whole or in part in any form or by any means without the prior written consent of Thuja Capital. The information contained
in this document , including the additional oral and written information has been compiled from sources Thuja Capital believes to be reliable. Thuja Capital
will not assume nor accept any responsibility in relation thereto. This information may be changed or updated by Thuja Capital without notice.
Thuja Capital
Yalelaan 40
3584 CM Utrecht
Tel: 030 253 3849
Mobile: 06 2246 2927
Email: mb@thujacapital.com
Web: www.thujacapital.com
Twitter: @ThujaCapital