From science to technology:Options for Funding high potencial new ventures in Portugal

ECS, University of Minho, 06.01.2015, Braga.

Gonçalo Amorim Program Director, MIT Portugal – Innovation & Entrepreneurship Initiative ISCTE-IUL Business School

Typical tech transfer challenges:

•  Can my “research” be turned into an (enabling) technology?

•  What problem can (I help) solve?

•  What industry(ies) may be interested in it?

•  How can I “package” it into a solution (offer)?

•  What prototypes do I need to design / test?

•  How can I fund these activities?

•  What is the size of the opportunity?

•  How do I protect the IP & my future business?

© Building Global Innovators, 2015.

Typical tech transfer challenges (II):•  When do I incept the company?

•  Who is the founding (dream) team? Skillset?•  How can I bring key advisors and KOLs?•  Can I validate the market?

•  How much further R&D do I need?•  How much funding?•  How much will I charge for my product?•  What (product) features are most important?•  How do I devise a (credible) Go to Market plan?•  …

© Building Global Innovators, 2015.

Great, but I do I get some funding?

To conduct basic activities to address those challenges you have several options:

1.  Non dilutive funding: •  Suitable for initial stages, i.e. validation, finding your market,

defining product etc.

2.  Dilutive: •  Requires company formation, full time team, should enable

faster growth.

NOTE: Investors do not fund “science” per say, nor product R&D. They fund companies, i.e. their business prospects.

© Building Global Innovators, 2015.

Typical funding sources in Portugal:DISCLAIMER: always think big, but make sure to start small (taking a baby step approach is always the best route).

1. Non dilutive: •  University funded projects•  P2020 grants (eg. Former QREN), •  H2020 SME instrument, “Compete” funded

programs (FP7 consortia etc)•  Other research / EU science grants•  Prize awards (R/D institutions & private corporates,

eg. Novo Banco inovação etc).•  Best option: paying clients (samples, trials, pilots,..)

© Building Global Innovators, 2015.

Typical funding sources in Portugal:

2. Dilutive (pre-seed, seed & early stage): •  Accelerators (BGI, Cohitec & Lisbon Challenge)

+ long tail of others (http://www.f6s.com/accelerators/portugal)

•  Up to 300k€/venture; typ. 5% - 12% dilution for 50 - 100k€

•  Business Angels:•  Typically 50k€ to 300k€ (above that, possible but rare)•  Sample: Dueto, Shilling Capital, Faber ventures…•  30+ entities (http://www.portugalventures.pt/en/contents.html?hrq=338)

•  Early stage VC’s (sample): •  Typically 200k€ to 500k€ •  Public: Portugal Ventures (Call for ignition)*, Caixa Capital•  Private/CVC: ES Ventures, EDP ventures, Novabase Cap.

* - For more information on Ignition partners: http://www.portugalventures.pt/en/contents-portfolio.html?hrq=148© Building Global Innovators, 2015.

Typical funding sources in Portugal:

Final comments on dilutive funding:•  Early stage risk capital invested in PT/ year:~€30 Million (growing fast)

majority of allocated € to early stage BA/VC is public•  Caveat: there is no later stage VC’s in Portugal, i.e. Rounds above

1 million are extremely rare (sub 5 per year)•  Truly Smart capital is seldom, but increasing•  Option: It is becoming more common to do early stage funding in PT

followed by international series A (syndicates) INRO USD$ 2 to 5M•  DO NOT go international before you get some home traction in

terms of critical milestones (product, BA/VC funding or other critical)•  Looking for funding is a FULL TIME activity, can take you up to 18

months or more to get funded, depending on stage of development•  Specialized accelerators are the gold standard to get you started in

the right path•  Good access to capital, especially human is absolutely critical in the

process of building your venture (in initial stages even more than $$).© Building Global Innovators, 2015.

Typical funding sources in Portugal:

Interesting sources on funding & portfolio Co’s:•  Portugal Ventures annual report (2013): •  http://www.portugalventures.pt/arq/fich/R_C_2013_PortugalVentures

_vb.pdf•  Caixa Capital Funds:

http://caixacapital.pt/caixacapital_PT/09_fundos.aspx#.VK5xH8YgxMI•  For list of investors and other in PT:

http://portugalinnovation.go4venture.com/investor/•  Portugal Ventures portfolio:

http://portugalinnovation.go4venture.com/company•  Building Global innovators alumni companies:

http://mitportugal-iei.org/index.php/2014-07-02-17-27-43/alumni/all

© Building Global Innovators, 2015.

Gonçalo Amorim Executive Director, BGI SA MIT Portugal – Innovation & Entrepreneurship Initiative ISCTE-IUL Business School

Building Global Innovators © Accelerator:

•  Entrepreneurs & Innovators (tech Start-up / Spin-out under 5y, <2.5M€ turnover/y)

•  Seed & early stage investors: Angel, VC & Corporates •  Stakeholders:

•  Universities (tech transfer, University’s 3rd mission, impact) •  Governments (jobs, growth, taxation) •  SMEs and Corporations (open innovation)

•  A deep innovation technology Accelerator for new ventures

Target audiences:

In a nutshell: - International accelerator, based in Lisbon & Cambridge (US) - Held once a year (6th ed. launched March 15th) - Over 1,150 hours of expert mentoring per startup / edition

- 4 Market-applications, B2B focused on verticals: 1. Medical Technologies & Health IT 2. Smart cities & Industrial Tech 3. Enterprise IT & Smart Data, and 4. Ocean (blue) Economy.

6th Edition Key Dates:

March 2nd Submissions open May 24th June 8th Deadline for submissions www.mitportugal-bgi.org July 16th Batch of 20 ventures announcement July 27-31st e-teams I bootcamp (Lisbon @ ISCTE-IUL) November 19th Demo Day I (Lisbon @ ISCTE-IUL) November 20-21st e-teams II bootcamp (Lisbon @ ISCTE-IUL) February, 2016 Demo Day II (Lisbon, venue TBD) Spring 2016 e-teams III bootcamp (Cambridge / US @ MIT)

BGI aims to help its startupers to: •  Identify from local to global value propositions and

accelerate business ventures leveraging on differentiated technologies

•  Facilitate scaling up via series A Venture financing & connecting global Innovators to global Investors.

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Copyright 2009-2010 Audax Center for Entrepreneurship ISCTE-IUL 1

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Mission statement:

BGI facilitates value creation & early stage launch of tech-based newCo's by helping Innovators focusing on market facilitation and development by bringing business acumen to entrepreneurs and connect entrepreneurs to the international venture finance community.

Mission:

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Building Global innovators© Where does BGI stand internationally?

Aprox. US$40 million raised

Source: Adapted from the Economist, Special Report “Tech Startups: A Cambrian moment”, Jan. 18th 2014.

Developed over a 5 year collaboration with MIT Portugal* in early stage deep innovation commercialization (* - inspired on Deshpande’s model).

›  BASF ›  Galp ›  Amorim ›  Nokia ›  Cisco ›  Efacec

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›  Sonae ›  PT ›  BRISA ›  Odebrecht ›  Google ›  ...

INPUT: Tech-based solutions aimed at Enduring global needs

OUTPUT: Successful Ventures that generate societal & economic value

CUSTOMER VALIDATIONS (B2B):

•  1.800+ Entrepreneurs •  500+

Applications •  101 selected (inc. Ed5 batch)

•  300+ globalpreneurs

•  68 active startups

•  >32M€ in venture financing.

BGI´s unique acceleration model:

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BGI Alumni (sample):

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Financing raised by BGI alumni:

Case studies: •  Veniam works (Smart cities): closed series A $US 4.9 million •  Movvo (Smart cities): closed series A $US 2 million

BGI Alumni (sample):

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Para informação e registo.