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Technology and business innovation V enture Backed Spin-Offs

Technology and business innovation V enture Backed Spin-Offs. 7 th Venture Capital Forum Athens June 28, 2006 Spyros Trachanis NBGI Ventures. NBGI Ventures. VC Manager, investing in early-stage technology ventures in Europe and Greece since 2001 Member of NBG Group

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Technology and business innovation V enture Backed Spin-Offs

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  1. Technology and business innovation Venture Backed Spin-Offs 7th Venture Capital Forum Athens June 28, 2006 Spyros Trachanis NBGI Ventures

  2. NBGI Ventures • VC Manager, investing in early-stage technology ventures in Europe and Greece since 2001 • Member of NBG Group • Offices in London and Athens • 7 portfolio companies in 4 countries, 3 Greek related, 4 academic spin-offs • Almost all deals syndicated, ca. 20 VC and strategic investment partners

  3. Many paths to leveragingAcademic Research • License technology to industry • Offer as service • Build Spin-Off company • Raise VC funding • Researcher engagement

  4. Key factors for profitable spin-offs Technology relevant to the industry • Clear differentiation • Globally competitive • Strong Intellectual Property position • Simple, practical and scalable solution

  5. Magnitude of Opportunity • Definition of addressable market • Size of addressable market (TAM) • Potential market share as justified by competitive differentiation (SAM) • Gross Profit margin potential • Size matters: • Potential for return on VC investment • Attract follow-on capital • Enable exit

  6. Execution Capability • Research team engagement • Management identification & attraction • Industry strategic relations • Flexibility and adaptability • Stamina and perseverance

  7. University spin-offs in the US • Since 1980, 4,543 spin-off companies have been formed from US academic institutions – 462 in 2004 • Venture Capital firms funded 20% of new start-up companies in 2004 • The US Patent Office in 2004 issued more that 3,800 patents to universities • It usually takes 7 to 10 years for a spin-off company to reach the state of an IPO • AUTM – Association of University Technology Managers

  8. The UK status of spin-off companies • 431 spin-off companies in the UK until mid 2005 • 46% life sciences, 39% ITC • Only 25% of spin-off companies currently profitable • The hits: • Wolfson Microelectronics (Edinburgh U.) floated on LSE for £214 mil. • Renovo (Manchester U.) floated on LSE for £154 mil. • Cambridge Display Technology (Cambridge U.) floated on NASDAQ for $255 mil. • Unico – University Companies Association

  9. Policies: UK Government Initiatives • Science Enterprise Challenge – Launched in 1999 and earmarked £28.9 million to set up entrepreneurship centers by mean of competition in the UK. Lead to the establishment of 12 Science Enterprise Centers in Universities • University Challenge – Launched in 2000. Aim to enable universities to establish seed funds. Total funding available £45 million. Created 15 seed funds • Higher Education Innovation Fund – On going • White Paper: Excellence and Opportunity- a science and innovation policy for the 21th century including records, roadmaps, targets etc. • Tax incentives for IP commercialization

  10. Greek academic spin-off and VC backed community 1999-2006 Greek academic spin-offs 16 6 VC backed spin-offs €25 million total funding to-date

  11. From IP to IPO Universities Research Institutes VCs Capital Markets PRAXI Incubators PRAXE

  12. Case study • RF semiconductor company established in 2001 • HQ in Silicon Valley, Operations in Athens • More than $10m invested to date from NBGI Ventures and six other VC’s from the US and SE Asia • Break-even in 2005, profitable in 2006 • Contracts with significant global companies

  13. Conclusions and Key Points • First wave of Greek spin-offs under way since the late ’90s, results start to appear • Greek ventures underfunded • Attraction of international venture capital is critical • More syndication among local VC’s • Large scale initiatives (Digital Leap) • Leverage EU programs to forge strategic relations with international industry • Availability of management talent a key issue • Design for success!

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