Early Stage Investment in Europe today &Hellenic Business Angels Network (HeBAN)

Baybars Altuntas, Vice PresidentThursday 14 July 2016, Thessaloniki

• The voice of Early StageInvestors in Europe

• Not for profit organization based in Brussels

• Created in 1999 by Eurada with the support of European Commission

• Members in 41 countries

• 126 members and growing!

Beyond Europe:

Australia Brazil

Canada Jordan

Kenya Malaysia

New Zealand Oman

Singapore USA

EBAN Members

Business Angel Networks (BANs)

Federations of Business Angel Networks

Early Stage Venture Capital Funds

Business Angels

Business Accelerators

E-funding & Crowdfunding Platforms

(non-investors)

Associate Members (Other entities involved in promoting the

early stage investment market in Europe)

Recognition by policy makers

«Business Angels have been playing an

important role in Europe’s recovery, by

financing start-ups that create jobs and

by bringing European innovation to

consumers and businesses worldwide.»

European Outlook

8,6b€ 6,1b€ 2,1b€ 0,4b€European Early

Stage Investment

Business Angels 1Early Stage VCs 2Equity

Crowdfunding

¹EVCA 2015²-EU Commission - CrowdSurfer Dashboard

Business Angel Networks

Angel activity

2013 2014 2015

Average Investment per company

165.787 174.071 184.271

Average Investment per BAN 1.184.378 1.232.601 1.291.468

Average Investment per BA 20.437 20.000 19.990

Market Growth By CountryVISIBLE MARKET

M€

Investment by Sector

investment amount # deals

Impact in the economy(year of investment, 2013)

Businesses Funded

33.430

Jobs Created

184.170

Fiscal Incentives for Early Stage InvestorsAs of 2014, available in 13 European countries:

• Belgium;

• Finland;

• France;

• Ireland;

• Italy;

• Germany

• Lithuania;

• Luxembourg;

• Portugal;

• Slovenia;

• Spain;

• Turkey;

• United Kingdom

Three Cases

Portugal (1/4)

The last few years has seen a strong evolution of the business angel market in Portugal.

While existing tax incentives should be raised to be more effective, angel activity seems to be growing at a sustainable pace.

The country boasts a strong entrepreneurial dynamic.

Portugal (2/4)

• Income tax rate:

• Individual: up to 48%

• Corporate: 21% for profit up to €15,000 + 1.5% municipal surtax

• Capital gain tax rate:

• Individual: 28%*

• Corporate: 21%*

• Dividend tax rate:

• Individual: 28%

• Corporate: 21%** With Exemptions

Portugal (3/4)

Tax incentives for Business Angels investments:

• 50% tax reduction for dividends and for sale of share participations owned for over two years.

• Tax deductions in case of profit being invested in a growing business

• Business Angels can claim a deduction on the individual income tax of 20% of an investment made in a(n) SME/startup that is less than 3 years old up to the limit of 15% of their individual income tax.

Portugal (4/4)

Co-investments and angel funds:

• COMPETE Business Angels Co-investment Fund extended to the New Platform of Financing Business Angels totaling EUR 15 million.

• FINICIA – Micro Venture Capital Fund – EUR 100,000 – EUR 250,000

• Business angels can invest a minimum of 20%, the rest is covered by the public venture capital fund (limit of public capital: EUR 100,000)

• FINICIA – Venture Capital Fund – EUR 250,000 – EUR 2,500,000

• Business angels can invest a minimum of 20%, the rest is covered by the public venture capital fund

Turkey (1/3)

There have been four major developments in the Turkish angel ecosystem:

1) A new Angel Investment Law

2) A fast-developing angel investment community

3) The Turkish Business Angel Association’s global performance

4) Attempts by Borsa Istanbul to create more liquidity for start-ups.

Turkey (2/3)

• Income tax rate:

• Individual: up to 35%

• Corporate: 20%

• Capital gain tax rate:

• Individual: up to 35%

• Corporate: subject to corporate income tax*

• Dividend tax rate:

• Individual: up to 35%

• Corporate: exempt* With Exemptions

Business Angels are main drivers of convertingpublic money to smart money

Government understood clearly that supportingsupporters of entrepreneurs and SMEs will easethe way to convert public money to smartmoney. And Business angels are the mainfinancial sources to secure this process.

So, Turkey released Angel Investment Law in2013

http://www.treasury.gov.tr/en-US/Pages/Business-Angel-Scheme?nm=1041

REGULATION ON BUSINESS ANGELS

PART ONE

Purpose, Scope, Legal Basis and Definitions

Purpose and scopeArticle 1–(1) The purpose of this regulation is to determine procedures and principles regarding the support for Business Angel Capital, a financial instrument for start-ups and early stage enterprises experiencing difficulties in access to finance due to the high risk they have; monitoring, supervision and termination of activities of Business Angels and individuals, institutions and organizations subjected to the Law on the Structures and Duties of the Undersecretariat of Treasury no. 4059 additional Clause 5, dated December 9, 1994.

Legal BasisArticle 2–(1) This regulation is prepared on the basis of Additional Clause 5 of the

Law on Structure and Duties of the Undersecretariat of Treasury.

Definitions and abbreviationsArticle 3–(1) In this Regulation, the following expressions have the below meanings:

Turkey (3/3)

Tax incentives for Business Angels:

• Licensed business angels can deduct 75% of the capital that they invest in unlisted SMEs from their annual income tax base.

• This deduction is increased to 100% for investments in SMEs whose projects are supported by relevant organizations.

There are also incentives designed for Technology Development Zones and other R&D initiatives.

What can we do in Greece to increase success rate of startups?• Coming soon

19:15 -19:40

• Moderator: Stavros Mantzanakis,

Co-Founder of the Hellenic Business

Angels Network (HeBAN) &

CEO of Emetris

– Baybars Altuntas

– Angelos Angelou

– Dimitris Tsingos

KEEP THE DATES

World Business Angels Investment Forum

13 – 14 February 2017, Istanbul

Contacts

EBAN Newsletter

EBAN

Baybars AltuntasScience 14 Atrium

Rue de la Science 14b

Brussels

+32 2 626 20 60

Baybars.altuntas@eban.org

www.eban.org