06.10.2011 Seite 1

7th MERR International SMEs Conferencef

Workshop 4: New Instrument for Financing of Innovative SMEs

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

ACCESSProgramme for Private Sector Development in Serbia

Belgrade, 4th October, 2011

06.10.2011 Seite 2

Business Angel Networks

Status quo in Germany & Cooperation with the Serbian Business Angel Network (SBAN)

Jürgen KappenmannConsultant GIZ ACCESS

KARER CONSULTING AG

06.10.2011 Seite 3

Introduction GIZ ACCESS Status quo in Germany Role & Functions of Business Angels Figures & Trends - Business Angels in Germany Business Angel Networks in Germany

Cooperation with SBAN Capacity Building SBAN & Knowledge Transfer Model “Innovative Projects Cycle 2010”

Current Issues

Content

06.10.2011 Seite 4

ACCESS Structure

06.10.2011 Seite 5

Know-how

Economically independentprivate investors

Investment between50.000 and 500.000 EUR

Interested in Return on Investment

Knowledge

Experience

Network & Contacts

Coaching

Fun

Role & Function of Business Angels

Capital

Definition: Business Angels are high net worth individuals investing their own money and their management/entrepreneurial experience into

unquoted high growth potential start-ups and SMEs (= Smart Capital).

06.10.2011 Seite 6

Number of BAs:more than 5.000 (UK: 20K, USA: 230K)

Accumulated Average Investment per Business Angel:27.000 € in Q2 2011 (down from 100K € in 2008, in UK ~ 48K €)

Total Volume of Early Stage Investment Asset Class:over 400 Mio. € (~ 4 bill. € in Europe in 2010 from 1 bill. € in 2005)

Capital Ownership Percentage:15% are majority owners, 54% hold less than 10% (in Q2 2011)

Targeted Companies:Companies with high growth potential, excellent management & clear exit strategy

Preferred Industries (Q2 2011):Energy, E-business, Environmental Techn., Medical Equipment, New Materials

Number of Received Business Plans per BA:17 per Q2 (from 19,5 in Q1 2011)

Figures & Trends – BAs in Germany

06.10.2011 Seite 7

Founded in 1998, support the BA market and build up a “New Culture of Entrepreneurship”

Role, Function & Activities Umbrella organization of the informal venture capital market in Germany Representation of business angel networks towards public & public sector PR, awareness campaigns (Business Angel Year 2010), trainings etc. Quarterly Business Angel Panel

Annual Matchmaking Event German Business Angel Day

43 Regional and Local Networks (network types) Network as a Public Project (50%) Network as a (Business) Association (30%) Network as a private Club

BAND – Business Angel Network Germany

06.10.2011 Seite 8

Definition: Business Angel Networks are national or regional, local, commercial or industry sector organizations set up to promote means of introduction between young innovative SMEs and private investors with entrepreneurial experience (business angels).

Role & Services for SMEs and Start-ups: Service Provider: information, know-how, consulting, financing, networking,

planning

BA Networks provide certain standards and best practices

Active cooperation of many partners in the region guarantees target-oriented and precise support

Essential function: provision of networking through opening importantcontact and communication channels

Example: Netzwerk Nordbayern

06.10.2011 Seite 9

Example: Netzwerk Nordbayern (Partner Network)

NetworkNorthern Bavaria

Ministry ofEconomy

Uni-versities

Chamberof Comm-

erce

Innovation & Techno-

logyCentres

Jurors Business

Plan Contest

Public EntitiesSponsors

IndustryClusters

Business Asso-

ciations

Companies

Business Angels &

VCs

06.10.2011 Seite 10

Model Project Cycle 2010 - Overview

06.10.2011 Seite 11

Selection of 15 Ideas (out of 150+)

“One Pager”

Involvement of partner network

Ideas from different industries IT & SW Develop., E-business Energy & Environmental Technology Food Media & Entertainment

Model Project Cycle 2010 – Ideas & Selection

06.10.2011 Seite 12

6 Training & Coaching Sessions were held (5 + Legal) Based on the “Ready for Equity - Training for Business Angel and

Entrepreneurs” scheme

Model Project Cycle 2010 - Trainings & Coachings

No. Trainings

1 Business Angels and Equity Market

2 How to Prepare for Meetings with Investors (executive summary, team building, enterprise value)

3 The Perfect Presentation

4 Negotiations

5 Coaching Sessions

06.10.2011 Seite 13

Organization of Investment Conferences (“matchmaking”) Local Regional

Matchmaking according to a defined presentation procedure (“pitching”)

17 investors present during the first investment conference alone

Model Project Cycle 2010 – Matchmaking

Results: 15 companies trained for matchmaking with investors “quality deal flow” initiated first negotiations between companies on concrete investments SBAN established as a serious player in the field

06.10.2011 Seite 14

General Impact of the global financial crisis Enterprise Investment Scheme (EIS) (Organized) syndication Growing recognition of BAs´ in SME development

In Serbia (start-ups, SMEs, BAs) About 45% of start-up companies don’t survive first two years of operations Complex and expensive procedures and regulations in whole life cycle Access to financing is one of the key issues Taxation issues for investors Capacity building for SBAN: institutional and financial support

Current Issues

06.10.2011 Seite 15

Thank youfor your attention

ContactGIZ / ACCESSProgram LeaderTobias StolzMakenzijeva 24/511 000 Belgrade, SerbiaTel.: +381 11 240 03 71Tobias.Stolz@giz.dewww.giz.de