1. Introduction 2. Funding Instruments 3. Public Funding 4. Support from Banks 5. Private Equity Investment 6. Venture Capital 2

1. Introduction 3

Challenges in Successful Technology Commercialisation Legal Frameworks as Obstacles Missing Awareness and Sensitiveness (Entrepreneurship Education for Scientists) Missing Integrated Concepts Missing Integration of Engineering Competence with Business Competence (Teamrekruiting) Missing Sales Forces R&D Results aren‘t Products High Risks in Early Stages (Gap of (Pre)-Seed Investment) 4

OnlineTicket- Technology OnlineTicket- Technology Product Encryption of information by algorithms in a 2D-Barcode Ticket ID Key ID F5CC06F1 From Technology…

Product OnlineTicket Technology Cash desk Control center Statistics Ticketshop Online payment Online assistance User Manual Helpdesk … to Product

public research facilities Universities / patent commercialisation agencies medium-sized enterprises captive product development departments / supplier software developer marketing and sales of technological products Sales and licensing of technology Customer Partner public research facilities Screening/ purchase evaluation / choice after- sales- service marke- ting sales product- design product develop- ment information and communication technologies 7 Funding Requirements for Product Development

? InvestorInventor ? ? ? ? ? ? 8 Dilemma of Early Stage Financing

9 2. Funding Instruments

External Financing EquityLoans Equity Financing Mezzanine- Financing Loan Financing Private Equity Venture Capital IPO Loan Warranties Corporate Bonds Leasing Factoring Asset Backed Securities Internal Financing 10 Instruments for Financing

Risk Sales Company‘s Expansion Stock MarketVenture Capital Equity Gap Family, Fools, and Friends Business Angels Loan Financing 11 Phases of Financing

12 Angel Investor´s Motivation

Losses Profits Break Even Early Stage Phase Later Stage Phase Expansion Phase Seed Phase Start-up Phase Entrepreneur Grants Private Pers. Business Angels Incubators Business Angels Incubators Strategic Investors VC/CVC Private Equity Loans Grants Private Equity Investment Bank The Hockey Stick Effect

14 3. Public Funding

Sources of Public Funding K Free Consulting (Consulting Agencies) K Supplemental Funding K Equity/Shares K Warranties K Loans 15

HighTech Start-up Funds of KfW Coach Start-up Coaching ContractShareholder‘s Agreement ManagementsupportRisk Capital 16 Example: High Tech Start-up Funds

Capital required High Low High Business Risk Banks and venture capital firms Venture capital firms Financing gap which may be filled by the incubator Banks 17 Sources of Funding in Relation to Business Risk

18 4. Support from Banks

Companies Bank Investors Capital Market Capital Universities R&D Institutes Market Research Institutes Associations Networks Industry Information 19 The Role of the Banks

Potential Support offered by Banks Management Support and Consulting Information flow to Assess HighTech Start-up Local, Regional Networks Co-operation within an Innovation Team Organisation of and Participation in Fairs Loans But: Rating Requirements 20

21 5. Private Equity Investments

Equity Eq. Mezzanine Loan Mezzanine Loans Private Equity „Source of Equity Financing or similar Instruments without financing through the stock market“ 22 Private Equity

Institutional Investors (Banks, Insurance Companies, Private Investors etc.) Private Equity-Company/ Funds Portfolio Company Investment Investment + Management Consulting Return Return + Fee 23 Private Equity

Private Equity Investors are Co-Owners of the Company: They share Risks and Profits They target Investments in Companies that are not listet in Stock Markets Private Equity Investments target generally for both: Majority or Minority Participation Participation may be active or in-active as well 24 Private Equity

Private Equity Investor targets a Return of 20% to 25% Normally they do not look for Desinvestments They use to take Management Responsability They target an Exit after 4 – 7 Years 25 Private Equity

0 24  First Meeting  IPR Situation  Team Recruiting  Basic Business Plan  Milestones  Financial Planning  Draft Contratcs  LOI and Assessment  Term Sheet  Creation  Development  Progress in BP  Staffing  Enhancement of Management  Proof of Concept  Negotiation  Exec Summary  Business Plan  Presentationen  Iterationen  Syndification  LOI and Valuation  Investment  Regulations Months VC 26 How Investors Think

InvestorInventor ? ! ? Go for the Goal!

Thank you October 2011