What

opportunities

does Europe

offer on Access

to Finance for

the cultural and

creative SMEs?

16:00h 17:00h

What   opportunities   does   Europe   offer   on   Access   to  Finance  for  the  cultural  and  creative  SMEs?    There  is  a  general  credit  crunch  in  Europe  refered  to  the  entrepreneurial  ecosystem,  but  when  refering  to  SMEs  and  more  specifically  CCI,  we  can  talk  about  a  BARRIER    on  access   to   finance.  What  does   this  barrier   consist  on  and  what  possibilities  have  SMEs  to  overcome  it?  How  does  a  small  company  from  UK,  Germany,  Holand  or  Italy,  devoted  to  content  production,  get  finance  for  their  projects?  How  do  governments  react  and  which  initiatives  are  being  launched  from  the  EC?  We  will  try  to  overview  at   a   regional   level   the   issues   and   challenges   for   small   and   medium   companies  through  different  examples  based  on  the  creative  industries.   Moderador:  Edgar  Garcia  Casellas,  Director  of  the  Business  Development  Area,  ICEC  -­‐  Catalan  Institute  for  the  Cultural  Companies    

 

Born in Barcelona, Edgar Garcia obtained his BA in 1994 after a final year at the University of Southampton (UK).

His professional career in the CCIs began on a free-lance basis performing a wide range of tasks, such as manager of an independent theatre company; press assistant for a dance company and a theatre festival; and PR and translator for Catalan film distributing companies. Afterwards he moved on to work for the Sitges International Film Festival of Catalonia. From 1999 until 2002, he lived and worked in Berlin promoting Catalan culture on behalf of the Catalan Autonomous Government (Generalitat de Catalunya).

He returned to Barcelona in 2002 to join the brand new Catalan Institute for Cultural Companies (ICEC), a governmental agency for the promotion of local cultural enterprises, where he is currently director of the Business Development Area. Amongst his duties are different financing programmes, as well as a consultancy service and the organization of professional training seminars and workshops for the Catalan CCI through the so-called SDE (Business Development Service).

For the last years he has given master classes in several Cultural Management postdegree courses in Catalonia, and has spoken as a panelist in different seminars and international meetings (Belfast; Brussels; London; Río de Janeiro; Edinburgh; Casablanca).

 Speakers:      Carsten  Schierenbeck,  Policy  Officer,  DG  Entreprise  and  Industry,    European  Commission      

   Carsten  Schierenbeck  is  a  Policy  Officer  working  in  the  area  of  cluster  policy  aiming  at  facilitating   industrial   change   through   service   innovation   and   creativity   and   the  development  of  emerging  industries  such  as  creative  industries  or  mobile  and  mobility  industries.  Based   in   the  active   ‘Clusters  and  Support   for  SMEs’  Unit   in   the  Enterprise  and   Industry   Directorate-­‐General   of   the   European   Commission,   he   is   managing   a  number  of  projects  under  the  European  Creative  Industries  Alliance,  which  is  a  cross-­‐sectoral   policy   initiative   to   foster   the   further   development   of   this   industry   and  spillovers  with   other   industries.   Previously,   Carsten   has   undertaken   research   for   the  University  in  Birmingham  in  the  UK,  worked  for  the  West  Midlands  in  Europe  regional  office  in  Brussels  as  well  as  for  an  SME  in  property  management  in  Germany.  He  holds  a  PhD,  an  MBA  in  International  Business  Administration,  a  Bachelor  of  Commerce  and  a  Professional  Qualification  in  Property  Management.    Rasmus  Windstedt  Tscherning,  Chairman,  European  Creative  Industries  Alliance  (ECIA)    

     Managing  Director  of  CKO  –  Center   for  Cultural  and  Experience  Economy,  an  agency  established   by   the   Danish   Ministry   of   Culture   and   the   Ministry   of   Economy   and  Business.   Chairman   of   the   European   Creative   Industries   Alliance,   appointed   by   the  

European   Commission   DG   Enterprise.   In   addition   to   CKO’s   responsibility   to  promoteentrepreneurship   and   growth   in   the   creative   industries   and   cross   sector  innovation,  Rasmus   is  also  responsible   for  several   initiatives  by  the  Nordic  Council  of  Minister   on   policy   development   and   financing   opportunities   for   creative   businesses.  Rasmus  has  launched  Creative  Business  Cup,  a  global  competition  of  creative  business  ideas.He   is   an   external   lecturer   on   the   subject“Creative   Industries:   Business,  Innovation   and   Politics”   and   lectures   internationally   in   French,   English,   German   and  Swedish.  Rasmus  has  19  years  of  experience  related  to  the  creative  industries.      Thierry  Baujard,  President  of  Media  Deals  and  member  of  ECIA  WG  Access  to  Finance  

   Dorota  Nigge,  Policy  Officer,  DG  Culture  and  Education,  European  Commission    Dorota   Nigge   works   in   the   European   Commission   as   a   policy   officer   responsible   for  cultural   and   creative   sectors   (Directorate   General   Education   and   Culture,   the   policy  development   for   culture).     Previously   she  was   in   charge  of   the  negotiations   and   the  implementation   of   the   EU   Regulation   establishing   a   financing   programme   for   the  integrated  Maritime  Policy.  Before  joining  the  EU  institutions  in  2005,  Dorota  worked  at   the   Jean  Monnet   Chair   for   Political   Science   of   Prof.  Wessels     at   the  University   of  Cologne,  the  Trans  European  Policy  Studies  Association,  the  Institute  of  Public  Affairs  in   Warsaw   and   the   Polish   Ministry   of   Culture,   dealing   with   EU   affairs.   She   holds   a  Master  degree  in  European  Studies  from  the  College  of  Europeand  the  Europa-­‐Kolleg  Hamburg.   She   has   published   several   articleson   Poland’s   accession   to   the   EU   and   EU  institutional  issues.      Joost  Heinsius,  Manager  of  Knowledge  &  Innovation,  Cultuur-­‐Ondernemen        

   Joost   Heinsius   is   responsible   for   Knowledge   and   Innovation   at   Cultuur-­‐Ondernemen/Culture-­‐Entrepreneurship.   This   Dutch   foundation   provides   training   and  

coaching   on   entrepreneurship   for   the   cultural   and   creative   sector,   develops   artistic  interventions  in  non-­‐arts  sectors  and  provides  financial  facilities  (loans  and  guarantees)  for  the  cultural  and  creative  sector.    He  has  been  responsible  for  many  European  projects.  He  is  involved  in  CI-­‐Factor  on  the  theme   Acces2Finance   within   the   European   Creative   Industries   Alliance,   is   leading  Training   Artists   For   Innovation   (www.trainingartistsforinnovation.eu)   and   is   starting  the   EU-­‐policy   analysis   project   Connecting   Arts&Business   in  May   2013.     He   has   been  developing  numerous  new  products  and  services  for  Cultuur-­‐Ondernemen.    He  has  degrees  in  Political  Science  (University  of  Amsterdam)  and  in  Journalism  (New  York  University).      Michela  Michili,  Head  of  EU  programmes  and  International  Initiatives  Unit,  FILAS    

Michela  Michilli  is  the  Head  of  "EU  Programmes&  International  Initiatives"  Unit  in  Filas,  the   Financial  Development  Agency   for   the   economic   development   and   technological  innovation  of  Lazio  Region.  Expert   in   economics,   finance   and   international   markets,   she   has   acquired   a   long  experience   in  market   analysis   for   the   ICT  and  media,   the   creative   industries   and   the  cultural  heritage  sectors,  collaborating  to  or  leading  international  projects  since  1996.  At   the   moment   she   is   the   coordinator   of   the   European   project   FAME   (Facilitating  Access  and  Mobilisation  of  European   finance   for  growth  of   creative   industries),  a  EU  CIP   co-­‐funded   project   under   the   brand-­‐new   initiative   named   European   Creative  Industry  Alliance  in  support  of  the  creative  industries.  Within   FAME,   Mrs   Michilli   is   designing   and   implementing   innovative   consultancy,  coaching   and   business   services   to   support   European   companies   in   their   investment  readiness   and   access   to   finance.     Cross-­‐border   investments,equity   finance,   and  financial  leverage  are  also  main  topics  and  issues  to  be  addressed  within  FAME.    Ms.  Michilli   is  chairperson  of  the  Enterprise  Europe  Network  Creative   industry  Sector  Group  and  member  of  the  Think  Tank  for  Creative  industry  and  EBAN.      

Moderator: Edgar Garcia Casellas, Director of the Business Develpment Area, ICEC

Carsten Schierenbeck, Policy Officer, DG Enterprise and Industry, EC

Rasmus Windstedt Tscherning, ECIA - European Creative Industries Alliance Chairman

Thierry Baujard, President of Media Deals and member of ECIA WG Access to Finance

1

This initiative is financed under the Competitiveness and

Innovation Framework Programme (CIP) which aims to

encourage the competitiveness of European enterprises.

ECIA: European Creative Industries Alliance

Working progress on Access to Finance

Thierry Baujard

ECIA External Expert of the WP on Access to Finance

Media Deals

5 June 2013, Barcelona

2

This initiative is financed under the Competitiveness and

Innovation Framework Programme (CIP) which aims to

encourage the competitiveness of European enterprises.

1. First results from ECIA’s WG on Access to Finance thematic paper 2. Benchmark structure, cases exeamples and impact assessement survey 3. First conclusions of WP

3

This initiative is financed under the Competitiveness and

Innovation Framework Programme (CIP) which aims to

encourage the competitiveness of European enterprises.

What are the key issues and challenges on Access to Finance?

Current framework

• The on-going financial and economic crisis has an important impact on the

adoption of public funding initiatives for the CCIs .

• Growing acknowledgement of the economic performance of the cultural and

creative sectors.

• The cultural and creative sector can become the basis for economic recovery

and potential growth in Europe.

• The sector’s role as an upcoming attraction for private funding should be

equally supported and enforced.

• The digital shift places the creative sector in the need to reassess business

models.

4

This initiative is financed under the Competitiveness and

Innovation Framework Programme (CIP) which aims to

encourage the competitiveness of European enterprises.

What are the key issues and challenges on Access to Finance?

Key issues and challenges

• Opening generic financial schemes to Creative Industries SME and...

• More private initiatives offering a better access to finance to the

sector (awareness and training)

• Integrate innovation and multiply the impact of relative low public

funding (leverage effect)

• Internationalization of the creative sector (increase revenues

potential)

5

This initiative is financed under the Competitiveness and

Innovation Framework Programme (CIP) which aims to

encourage the competitiveness of European enterprises.

Benchmark structure To explore and analyze key schemes through:

their goals, results and context

the role of the private and public sector

their cross sector/spill over character

their replication potential

The success or failure factors

8 first cases to test structure and impact assessment:

1. Berlin VC Fund*

2. The Film London PFM*

3. The Media Production Guarantee Fund*

4. OSEO Guarantee Fund

5. Caisse des Depots „Heritage and Creation” VC fund

6. The Belgian Tax shelter

7. CIM Venture

8. The Nordic Game Program

6

This initiative is financed under the Competitiveness and

Innovation Framework Programme (CIP) which aims to

encourage the competitiveness of European enterprises.

Assessment of current policies and policy initiatives

Examples of policies and initiatives Cross-sectoral

Invest. Awareness

Alternative financing

Leverage Cross-border Level

Score (1-5)

MEDIA Production Guarantee Fund

Pan European Guarantee for film prod. x x

x EU 4*

Belgian Tax shelter for films

Key finance instrument for film finance x x

x Nat. 4*

OSEO Guarantee

Offer risk mitigation to innovative SME x x Nat. 3

Film London PFM (Production Finance Market)http://filmlondon.org.uk/PFM

Key finance market supported by MEDIA

x x

x

EU 4*

EASY Early stage investors www.earlystageinvestors.org/

Pilot project for cross border investment x x x

x

EU 2

FILAS VC Fund http://www.filasinternational.eu/

Regional fund for CI x X Reg. 3

7

This initiative is financed under the Competitiveness and

Innovation Framework Programme (CIP) which aims to

encourage the competitiveness of European enterprises.

CIM Venture

Pan European CI Investment Fund x x

x EU 1

Caisse des Depots VC fund „Heritage and Creation“

Development fund for established CI x Nat. 3

VC Fonds Kreativwirtschaft Berlinhttp://www.ibb-bet.de/vc_fonds_kreativ.0.html?&L=1

Public private fund focussing on CI x x Reg. 4*

European Regional Development Fund (ERDF)

Key regional fund x x EU 3

How to grow platform

CI Online platform x x

x EU 3

European Angels Fund (EAF)

http://www.eif.org/what_we_do/equity/eaf/index.htm

EIF co angel fund

x x x EU 1

Enterprise Investment Scheme (EIS http://www.hmrc.gov.uk/eis/

Key UK scheme to support innovation

x x x Nat. 4*

Seed4Start www.seed4start.org

Pilot project on cross border investment x x x

x EU 2

8

This initiative is financed under the Competitiveness and

Innovation Framework Programme (CIP) which aims to

encourage the competitiveness of European enterprises.

Nordic Game Program http://nordicgameprogram.org/

Key programme for Video Game x

x Nat. 4*

INTERREG

Key interregional funding x x x EU 3

JEREMIEhttp://www.eif.org/what_we_do/jeremie/index.htm

Co investment scheme

x x x EU 2

European Progress Microfinance Facilityhttp://ec.europa.eu/social/main.jsp?catId=836&langId=en

Pan European Micro loan

x x x x x EU 2

CIP Microcredit Guarantee Windowhttp://www.eif.org/what_we_do/microfinance/microcredit_guarantees/index.htm

Pan European Micro credit guarantee

x x x x x EU 2

Entrepreneurship and Innovation Programme (EIP) http://ec.europa.eu/cip/eip/index_en.htm

Support programme for innovative SME

x x x EU 2

SME Guarantee Facility

http://ec.europa.eu/enterprise/policies/finance/cip-financial-instruments/index_en.htm

x x Nat 2

9

This initiative is financed under the Competitiveness and

Innovation Framework Programme (CIP) which aims to

encourage the competitiveness of European enterprises.

Case study 1: VC KreativWirtschaft Berlin Fund

For Berlin based creative industries companies

Investments areas: film, radio, TV, publishing, music, entertainment, advertising,

fashion, design, architecture, multimedia, games, software, art and culture.

Fund volume: 30M EUR, 50% of the funds by the Berlin IBB , and 50% by ERDF

The VC fund only provides co-financing if private investors cover at least 50% of the

respective financing round.

Amount invested per round : average 1.5M EUR

Maximum of 3M EUR per company over multiple rounds

The VC fund only holds minority shares in the portfolio companies

Deal flow in arts and culture identified as lower than in multimedia, games, software,

music and TV

Catalyst to attract international investors to Berlin

Offer capacity building to companies during in vestment period.

10

This initiative is financed under the Competitiveness and

Innovation Framework Programme (CIP) which aims to

encourage the competitiveness of European enterprises.

Case study 2: Production Finance market (London)

two-day annual event at the BFI London Film Festival

connects international producers and financiers to encourage new film financing

relationships

Financiers: mature and leading financiers (UK and international) and public finding

bodies

Producers: producers (UK and international) with a significant production track record or

with a highly promising project aimed at the international theatrical market, with a

budget above €1m budgets

The uniqueness of the PFM lies in the focus on the financing and not the co-production

part, involving real financiers.

The 2012 market attracted almost €305m of production value, and leading equity, hedge

fund, tax, banking, and public and broadcaster financiers

To date, some 50 or more films and companies have benefited directly from the PFM

The 2013 edition will bring more than 100 producers, financiers and new forms of

investment together

11

This initiative is financed under the Competitiveness and

Innovation Framework Programme (CIP) which aims to

encourage the competitiveness of European enterprises.

Case study : Media Production Guarantee Fund Following study on role of banks in the film industry

Once film projects are financed, there is a need to cash flow the pre sales and subsidies

contracts (bridge financing)

2 specialized public film guarantors/ (France and Spain) have been awarded 8M euro for

a pilot project till end 2013

Results till now: 28 bank loans have benefited from this guarantee, representing a total loan amount

of over EUR 38 million, for the production of 21 films in 9 different countries.

The MPGF has provided guarantees and therefore facilitated loans in many European countries that

until now could not access bridge financing.

The difficulties encountered are:

Lack of expertise from banks in the sector of film finance

Banks are very local and do not look at projects outside region or country

Size of loans is often too small making the deal commercially not interesting for banks leading

to a limited investment of resource In the sector

Project lending VS company lending makes it difficult for credit committee to assess risk.

12

This initiative is financed under the Competitiveness and

Innovation Framework Programme (CIP) which aims to

encourage the competitiveness of European enterprises.

Impact Assessment – starting 3 June

Online survey + telephone follow up

Two target groups:

The Initiator of each funding scheme

At least two beneficiaries of each funding scheme

13

This initiative is financed under the Competitiveness and

Innovation Framework Programme (CIP) which aims to

encourage the competitiveness of European enterprises.

Impact Assessment

Quantitative survey: estimation of number of projects supported, amounts invested…

Qualitative:

Sector transversality

Aim > assess the support of creative industries in generic schemes

Key success factors

Aim > compare the perception of “success” and “fail” for initiators and beneficiaries and suggest

areas of improvement

Replication potential

Aim > distinguish the geographical/ sectorial specificities from the factors allowing to multiply

the scheme in other regions/ creative sectors

Other areas of assessment:

• Improvement of public policy;

• Mobilization of private finance;

• Long term, social or environmental impact

14

This initiative is financed under the Competitiveness and

Innovation Framework Programme (CIP) which aims to

encourage the competitiveness of European enterprises.

Conclusions of the assessment

• A fragmentation between initiatives specialised in CCIs and policies with a

larger scope is observed

• Many of the not sector-specific existing tools have proven very effective in

all fields of application, and CCI stakeholders should be encouraged to make

good use of them.

• Investment readiness and awareness-raising schemes, as well as financial

leverage instruments to support risk mitigation and exchange of expertise,

have been already largely implemented in all levels (EU, national and regional).

• However, policy-makers are aware of the need to introduce and further

support such initiatives.

• In the context of such existing initiatives, the spotlight should be henceforth put

on IP assets valuation.

15

This initiative is financed under the Competitiveness and

Innovation Framework Programme (CIP) which aims to

encourage the competitiveness of European enterprises.

Other relevant conclusions related to Access to Finance

• Despite the fact that the creative sector brings together a wide variety of different

sub-sectors, the sector faces common needs… and common solutions are as

much required as sector-specific solutions.

• The most needed generic solutions to be undertaken for all creative sub-sectors

are:

– the shifting from project to corporate finance

– and the shifting from grants/subsidies/(credit) to equity finance

• There is a special need for cross-sectoral networking.

• Clustering and network activities are expected to bring specific expertise by

building bridges between various stakeholders: related industries, CCIs, public

bodies, investors, producers, services providers, educational and research

institutions, financial institutions and other private and government institutions.

16

This initiative is financed under the Competitiveness and

Innovation Framework Programme (CIP) which aims to

encourage the competitiveness of European enterprises.

ECIA website:

www.eciaplatform.eu

More information about ECIA’s WG on Access to Finance:

Edgar Garcia, (WP A2F Coordinator)

edgarcia@gencat.cat

Thierry Baujard (external expert)

tbaujard@media-deals.org

Dorota Nigge, Policy Officer, DG Education and Culture, EC

ACCESS TO FINANCE FOR CCSs:

GUARANTEE FUND UNDER THE

CREATIVE EUROPE PROGRAMME

DG EDUCATION AND CULTURE

• DIGITAL SHIFT AND GLOBALISATION

• HIGH LEVEL OF MARKET FRAGMENTATION

• DIFFICULTY IN ACCESSING FINANCE TO ADAPT TO A CHANGING ENVIRONMENT

• INSUFFICIENT CONNECTIONS BETWEEN SECTORS

WHAT ARE THE CHALLENGES CULTURAL AND CREATIVE SECTORS FACE?

SOURCE: COMMUNICATION ON PROMOTING CULTURAL AND CREATIVE SECTORS FOR GROWTH AND JOBS IN THE EU COM(2012)537

• GENERAL OBJECTIVES

• FOSTER THE SAFEGUARDING AND PROMOTION OF THE EUROPEAN CULTURAL AND LINGUISTIC DIVERSITY

• STRENGTHEN THE COMPETITIVENESS OF THE CCS WITH A VIEW TO PROMOTING SMART, SUSTAINABLE AND INCLUSIVE GROWTH

SPECIFIC OBJECTIVES

• SUPPORT THE CAPACITY OF THE EUROPEAN CCS TO OPERATE TRANSNATIONALLY

• PROMOTE THE TRANSNATIONAL CIRCULATION OF CC WORKS AND OPERATORS AND REACH AUDIENCES IN EUROPE AND BEYOND

• STRENGTHEN THE FINANCIAL CAPACITY OF THE CCS (SMES)

• SUPPORT TRANSNATIONAL POLICY COOPERATION IN ORDER TO FOSTER POLICY DEVELOPMENT, INNOVATION, AUDIENCE BUILDING AND REVENUE STREAMS

CREATIVE EUROPE PROGRAMME (2014-2020)

MEDIA CULTURE

MARKET INTELLIGENCE, CULTURAL AND MEDIA LITERACY, ETC

CREATIVE EUROPE 2014-2020

CROSS-SECTORAL

FINANCIAL INSTRUMENT (CCS GUARANTEE FUND)

€ 1.8 BN

MUSIC, PUBLISHING,

HERITAGE, ETC..

COMMISSION PROPOSAL

CINEMA, TV, VIDEO

GAMES

55%

15%

30%

€ ???

ALLOCATED BUDGET

WHAT IS THE CULTURAL AND CREATIVE SECTORS GUARANTEE FACILITY?

• GUARANTEE FACILITY TO SHARE CREDIT RISK (70%)

• WITH BANKS INVESTING IN PORTFOLIOS OF LOANS

• LOANS TO ORGANISATIONS OPERATING IN THE CCS

• TRANSNATIONAL CAPACITY-BUILDING / EXPERTISE FOR BANKS: NON-FINANCIAL LEVERAGE

• MANAGED BY THE EUROPEAN INVESTMENT FUND

• € 211 MILLION FUND RAISING CREDITS FOR UP TO € 1 BILLION TO THE BENEFIT OF SMES IN CCS (AS PER COMMISSION PROPOSAL)

• LARGER SCOPE THAN CURRENT MPGF

• AV INDUSTRY: EXTENDED TO DISTRIBUTION, DEVELOPMENT, TV, GAMES

• EXTENDED TO ALL CCS AND TO A WIDER RANGE OF FINANCIAL PRODUCTS

CASE STUDY: THE MEDIA PRODUCTION GUARANTEE FUND

MPGF ACTIVITY SINCE MAY 2011:

• 30 GUARANTEES DELIVERED

• FOR 23 FILMS

• GUARANTEEING A TOTAL AMOUNT OF OVER € 10 MILLION

• ALLOWING TO RAISE €60 MILLION IN BANK CREDITS

• PRODUCERS IN 8 DIFFERENT COUNTRIES

• FR, BE, ES, IC, FI, IRL, LU, D

• 4 BANKS INVOLVED

CCS GUARANTEE FACILITY VS MPGF

1 LARGER SCOPE -> CRITICAL MASS

• SECTORS: AUDIOVISUAL, PUBLISHING, VIDEO GAMES, MUSIC, PERFORMING ARTS, MUSEUMS, FASHION, DESIGN…

• FINANCIAL PRODUCTS: PROJECT AND CORPORATE FINANCE

• PARTNERS

2 PORTFOLIO APPROACH

• DIVERSIFIED RISKS

• CRITICAL MASS

3 CAPACITY BUILDING

4 FREE GUARANTEE

5 EUROPEAN INVESTMENT FUND

Training

• Finance

• Management

• Investment readiness

Networking

• Access to market

• Co-production forums

CCS SMES AND

PROFESSIONALS

• Capacity building

• Networking

• Technical support

BANKS

Guarantee Facility

• Fund € 211 M

• Multiplier of 5,7

• Up to € 1 BN of

bank loans

• Capped guarantee

portfolios

MEDIA AND CULTURE

CAPACITY BUILDING

RISK SHARING

Dialogue

CREATIVE EUROPE 2014-2020

CCS GUARANTEE FACILITY

PROPOSED

CULTURAL AND CREATIVE SECTORS GUARANTEE FACILITY

• 70% GUARANTEE RATE PER LOAN UP TO A CAP RATE OF 25% ON EACH PORTFOLIO.

• REPRESENTS SUM OF ESTIMATED EXPECTED LOSS, AS WELL AS PART OF UNEXPECTED LOSS.

• EXPECTED LOSS CALCULATED ON BASIS OF EXISTING DEFAULT RATE IN THE SECTOR (IE. 10% IN THE CCS), UNEXPECTED LOSS IS MAXIMUM LOSS UNDER MORE EXTREME SCENARIOS.

• IFCIC / AUDIOVISUAL SGR LOSSES FOR DOMESTIC OPERATIONS WELL BELOW 5% FOR AUDIOVISUAL SECTORS

FUND MANAGER

European Investment Fund

Eu Level Funding

Eu Debt Platform

Debt Instrument

Financial Intermediaries

Final Beneficiaries

EUROPEAN COMMISSION

Creative Europe Programme

EUROPEAN INVESTMENT BANK

€ €

EU CULTURAL AND CREATIVE SECTORS LOAN GUARANTEE FACILITY

Bank 1 Bank 2 Bank 3 Bank n

CCS SME

CCS SME

CCS SME

CCS SME

CCS SME

CCS SME

CCS SME

CCS SME

Capacity

building programme

CAPACITY BUILDING

PROVIDERS

Risk sharing through loan

guarantee

SET UP OF THE EU CCS GUARANTEE FACILITY

€

ADDED VALUE OF THE GUARANTEE FACILITY:

MARKET TEST

• CARRIED OUT BY THE EIF OVER 2011 - 2012

• TO VERIFY THAT THE INSTRUMENT WOULD CONTRIBUTE TO

FILLING THE MARKET GAP IT WAS DESIGNED FOR

• GET A DEEPER UNDERSTANDING OF THE MARKET GAP

• VALIDATE THE DESIGN OF THE INSTRUMENT

• MEASURE WILLINGNESS OF THE STAKEHOLDERS TO

PARTICIPATE

• REACH NEW BANKS THANKS TO EIF'S NETWORK

• APPROXIMATELY 100 BANKS AND OTHER FINANCIAL

INSTITUTIONS

ADDED VALUE: MARKET TEST RESULTS

• CCS GF DOES RESPOND TO THE NEEDS OF THE BANKS IN TERMS

OF LENDING TO THE CULTURAL AND CREATIVE SECTORS

• SPECIALIST BANKS: GREAT INTEREST IN EXPANDING THEIR

ACTIVITIES TO OTHER CCS AND BRINGING AN SME ANGLE

• NON-SPECIALIST BANKS: GROWING INTEREST IN CCS THANKS TO

THE COMBINATION OF "PROJECT-FINANCING" AND SME ANGLE

• FLEXIBILITY AND SCOPE, DIVERSIFICATION APPRECIATED

• DIFFICULTIES EXPECTED: COLLATERALIZATION OF IPRS AND NO

RECOURSE TO PERSONAL ASSETS

• ADAPTATION TO SECTOR SPECIFICITIES (COMPLETION BONDS,

SPVS)

THANK YOU!

DOROTA NIGGE

dorota.nigge@ec.europea.eu

EUROPEAN COMMISSION DG EAC,CULTURE UNIT

ec.europa.eu/culture

Joost Heinsius, Manager Knowledge & Innovation, Cuultur – Ondernemen

Guarantee Fund a successful finance tool

Joost Heinsius, 05-06-2013 Barcelona

4 Examples of loans and

guarantees

Investing in product development

and audience/client development

• 4 different cultural and creative businesses

• 4 different business models

• 4 different financial mixes (income, grants, loans, bonds,

investments, …)

Financing diversity

• CCS is a large sector with mostly small businesses, a missing middle and a few big businesses

• CCS spans a wide range between content driven and growth-driven business • CCS has a large variety in places within the value chain

(creation → reception), forms of innovation (product,

services, process, transaction) and (new) business models

▶We need a wide range of financing possibilities to fine

tune the right financing mix for this diversity such as investments, crowdfunding, loans, bonds, …

Why we need guarantees for loans?

• Banks do not see the sector as bankable, have no

sector expertise

• CCS have hardly any collateral to offer (buildings,

machines)

• Loans often too small (below 250.000€ banks do not

employ sectoral knowledge)

• IP generally not accepted by banks as collateral

• Often project based instead of business based

• Without guarantee most loans would not have been

possible or carry higher interest

Why we need capacity building?

• Banks lack knowledge of CCS and lack trust in CCS

profitability

• CCS has negative reputation in providing excellent

business plans and employing people with sufficient

entrepeneurial skills

• The majority in CCS is content driven, not growth

driven

• Since most businesses are small, there is hardly room

for separate entrepeneurial function

The NL Culture Loan and Guarantee

• Cultuur-Ondernemen/Culture-Entrepeneurship &

Triodos bank

• Micro credit (<€10.000) by Cultuur-Ondernemen

• Providing guarantees for loans >€10.000 by Triodos

bank

• Revolving Guarantee fund of €2 million

• Sliding degree of guarantee between 80-25%

• Default rate of loans < 5%

• Loans for working capital, investments and mortgages

How much?

At the end of 2012:

• 236 running micro credit loans for approx €1,1 million

• 87 guarantees running for €21 million in loans, running

guarantee €2,2 million

Total 2007 – 2012:

• 413 micro credit loans for approx €1,5 million

• 114 guarantees for approx €29 million in loans by

Triodos bank

Succes factors for Guarantee system

• Training and coaching, business plan support, business

modelling, business plan competitions are necessary

ingredients for CCS

• Sector specific knowledge is required for lending

institutions

• New: Amsterdam Culture Loan for the City of

Amsterdam, where 20% of budget is allocated to

coaching and training of loan applicants and receivers

CI-Factor support for Creative Guarantee facility

• Building case for support Guarantee facility by

providing cases of successful guarantee financing

• Hold workshops with banks on the possible use of the

Guarantee facility

• Develop a network of banks interested in Guarantee

facility

• Hold workshops with regions and clusters on use of

Guarantee facility (f.e. as counter guarantee for

regional funds)

Conclusions

• There is no simple or uniform solution for

acces2finance: financing diversity means developing a

diversity of finance instruments

• Capacity building is key: both financial sector

(knowledge of CCS) and CCS (entrepeneurial skills)

• A revolving guarantee fund can have a large multiplier

effect (NL: €2 million guarantee → €29 million in loans

in 6 years)

jheinsius@cultuur-ondernemen.nl 0031623926441

Michela Michilli, Head of EU programmes and International Initiatives, FILAS

1

What Public should do with Private institutions to foster the CIs ecosystem

FAME Facilitating Access & Mobilisation of European financefor Creative industrie

FAME objectives

FAME: What For!

To support: internationalization of CI high growth companiesthe level of investment readiness of innovating CI businesses

To achieve a new connected cross-boarder financial framework for CI business across Europe

boarder To connect and integrate funding sources

To set-up the ideal ecosystem for creative industries companies

FAME : with whom

ROME (IT) - Financial Agency of Lazio Region Facilitator between the industry and finance, Filas manages all financial schemes from spin-off, start-up till 2nd round investement

COPENHAGHEN (DK) - Private Science ParkCAT Science Park is a unique combination of government-backed pre-seed capital, science park and venture company.

COPENHAGHEN (DK) - Facilitator for Nordic Countries Policies ImplementationCenter for Cultural and Experience Economy works to strengthen collaboration and skill exchange between the creative sector and the business community at large

BADEN WURTTEMBERG (D) - Private networkBwcon is the largest technology networks in Europe with more than 600 businesses and research institutions. It provides advice and assistance to both new and expanding companies. 

FAME works to set up a common program between different stakeholders in different countries

FAME :actions

Specialised Coaching

and

in-kind support

I Leverage strategy

Co-investment models

Matchmaking and elevator

pitch sessions between

entrepreneurs and investors FAME Pan-EU fund

for creative industries

II

III IV

FAME 4 CIs : coaching, matchmaking, pitching at Copenaghen

13 participating companies

5 personal coaches

6 private and public investors

4 minutes pitch

20 minutes 1:1 coaching THE COMMENTS

“1:1 coaching sessions is very valuable for companies”.

Copenaghen, November 2012

Start-up companies, researchers and developers presented up to 20 business ideas and close-to-market research findings focusing on mobile services including:

Focus on the Mobile ecosystem

Heidelberg, March 2013

20 participating companies

4 personal coaches

22 private and public investors

6 minutes pitch

30 minutes 1:1 coaching

1 Test pitching battle

FAME 4 CIs at

Mobile Learning

Mobile Content

Mobile Social Interaction

Mobile E-Health

Mobile Gaming

Mobile Advertising

Heidelberg Agenda

18th March 2013

CREATIVE VISITS

Call for

Proposals

Selection by

an

International

Jury

14.30 – 18.00

VISIT

Creative Heidelberg

& Mannheim

19th March 2013

COACHING DAY20th March 2013

PITCHING DAY

09:00 – 18:00

FAMECoaching Day

9.00 – 11.45CONFERENCE

Commercialization of RDI

Creative

evening event

11.45 – 13.30Welcome, Key notes & Battles

13.30 – 14.30

2 Parallel pitching panels

14.30 – 15.30

Coffee break/meet the pan

elists

15.30 – 16.30

2 Parallel pitching ba

ttles

15.30 – 18.00Investor workshop

15.30 – 18.00KARIM workshop

18.00 – 18.45

WRAP-UP Workshop

19.30 – 23.00

AWARD

the best innovative id

ea@ dinner

“ Money is out there, spread and not targeted to Creative Industries in most cases”

Lorenzo De Fabio, Filas

“ Cross Financing is possible but Investors need trust and better knowledge of foreign markets “

Laura Kilcrease, Triton Venture

“ Before conceiving cross-boarder investments it is necessary to cross-link services “

Andrea D’Anselmo, Zernike Group

Heidelberg first Cross-Boarders Investment Café

FAME MAPPING

THE CHALLENGE Filling the gap between young talents and finance Boosting the creative-based products/services

 THE CONSTRAINTS

Very few dynamic European “Hot-Spots” supporting emerging sectors High fragmentation of private/public funding financing emerging sectors

OUR PROPOSITION: the Multi-regional Hot-Spot MISSION

Creating a Multi-Regional Hot-Spot in the corridor linking the Nordic countries, Germany and Italy

Joining together key financial organisations to create a dynamic and rich financial and services eco-system for startups

Involving and mutual reinforce the Regional creative ecosystems, aggregating together money and competencies in key promising areas

FAME MULTI-REGIONAL HUB

THE

HOTTEST

EU SPOT

LONDON

The London start-up scene is

amongst the most vibrant

,

active and successful

in

Europe and beyond with more

than 2,000 active sta

rt-ups

BERLIN

A huge start-up community

have emerged with more than

1,300 start-ups create

d since

2008, according to Wired and

rivaling with London’s

BARCELLONA

Barcelona is the capi

tal city of

Catalonia, which is renowned

worldwide for its design flair,

R&D and engineering, due in

large part to its drive to

innovate and advance.

OUR

ANSWER

THE

MULTI-REGIONAL

CORRIDOR

Denmark –

Germany –

Italy

The servicesscouting talents/ideascoaching/investor readiness/ investee readinesscross-linking among start-ups from different regionsconsulting key legal/finance aspectsfund raisingfinancing (semi-equity + equity) Soft landing

Fame Multi-Regional Hub proposal

The ideal environment should be formed by

Public/Private VC FundPublic Investor Biz AngelsAccelerators/Incubators

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86&.7&+(9*%+,( :0,),,.(( 9,,.( 9*%0*;$( <"6&.(=(

<"6&.(>(?,%1(97@,( ;$(*"(ABBC( ABBCD

EBBC(EBBC(DF5G(

FDH5G( ADE5G(

Rome investment ecosystem

INNOVACTIONLABhttp://www.innovactionlab.org/

MISSIONInnovActionLab is a no-profit association born in 2011 that offers inter-university course that teach to young entrepreneurs how to bring their ideas in front of an investor.

BENEFICIARIESStudents

INVESTMENT PROGRAMS% of start-up equity for a fully free course (all costs are covered by sponsors)

Private actors of Rome Regional Hub

LUISS/ENLABShttp://www.enlabs.it/

MISSIONENLABS is an open incubator and accelerator which also supports co-working.

BENEFICIARIESEntrepreneurial teams , Start ups

INVESTMENT PROGRAMSThe Program is valued at Euro 60k and lasts 6 months.It includes: Working space - Entrepreneurship course – Mentor & Advisor support - Business networking - Investor relationships - Euro 30k in CashIn exchange for all this EnLabs acquires equity in the start up

Codemotion connects developers, aggregators and App Store.Events: Italy in March ( Rome), Germany in May ( Berlin) Spain in October ( Madrid). Sessions: Hackaton workshops technical labs job recruiting

Global Game Jam  is the world's largest game jam event addressed to game developersEvents: Italy in January 2013 (Rome)(FILAS co-organiser)Latest event March 28th 2013 319 jamsites located in 63 countries (included Rome) Session: Hackaton

Cleanweb : Hackathon addressed to developers, designers and business professionals  to optimizing resource use and accelerating cleantech developmentEvents: Berkely S. Francisco Los Angeles France Italy (Rome) ( FILAS silver sponsor) UK Session: Hackaton

Growing attention to CI by the

public sector

Important instruments in support

of start-ups

Public involvement in support and

in co-organization of CI events

match making events/year

Private actions with public support towards CI policies

Next steps and major appointments

ROME25 June 2013Fame 4 Creative Industries

ROMEOctober 2013Leverage Workshop

Other actors involved

Creative England (www.creativeengland.co.uk) is a National Agency with strong local and regional linksTheir mission is to generate jobs, drive innovationThe sectors covered are creative ideas, talent and businesses in film, TV, games and digital media

AppCampus (www.appcampus.fi/ ) is a mobile application accelerator program managed by Aalto University in Espoo, Finland. This is an 18 million euro joint investment between Microsoft and Nokia to foster mobile application development on Windows Phone and any other Nokia platform.

creativ wirtschaft austria (www.creativwirtschaft.at) holds as its remit the interests of the Austrian creative industries, both at a national, European and international level. cwa is committed to developing the creative industries in Austria and creating linkages with other sectors.

Sunstone Capital (www.sunstone.eu) Sunstone Technology Ventures is a European early stage technology investor based in Copenhagen.

Accelerace (www.Symbion.dk) Symbion is Denmark’s leading innovation environment, where office communities, meeting facilities, conference facilities, business developement and capital for the most promising and ambitious start up companies are offered.

Shareplay (www.shareplay.dk) Shareplay is an ambitious transmedia venture launched by the Central Denmark Region and the North Denmark Region. Their mission is to take part in the development of the future media sector. They spot the opportunities in working across different media and diverse industries.

Neogames (www.neogames.it) Neogames is the hub of the Finnish Game Industry and is a member-based non-profit game industry organization located in Helsinki. Their mission is to accelerate, coordinate, and support the development of the Finnish game cluster. They connect the industry players and serve their shared interests.

If you want to join us contact Michela Michilli

michilli@filas.it

+39 06 32885725

michelamichilli

Thank you