An overview of the VC market and Vækstfonden 12 March 2010 Uffe Arlø Theilade, Investment Director, Vækstfonden
/ side Agenda 25. juni The idea and rationale for VC 2.An introduction to Vækstfonden 3.VC in Denmark 4.Market developments and challenges
/ side Why do we need venture capital? 25. juni
/ side4 Types of finance (risk profiles) Debt Quasi-equity Equity Traditional companiesTechnology companies Debt Equity
/ side25. juni VC Funded Companies in Denmark 20% growth in employment 40% export growth 50% growth in R&D R&D expected to account for 1.5% of GDP in 2010
/ side6 VC-backed companies in the US -$ 1,800 billion revenue -16% of GDP -10 mil jobs -40% of all IPOs -3 x R&D activity -3 x tax payment -2 x export
/ side7 Venture boosts the economy
/ side What is Vækstfonden? 25. juni
/ side25. juni Who We Are Vækstfonden is a government backed investment fund Investment focus on Danish early stage companies - both through direct investments and fund-of-funds Total asset base around EUR 350 million 85 % committed to early stage companies and venture capital funds Largest Danish investor within the ICT and life science spaces
/ side25. juni Annual investments of DKK 500 million in companies – direct as well as through VC funds Loan guarantees on the rise Co-funded more than 3,500 companies to the tune of DKK 6.5 billion Funding Activity
/ side25. juni Targeted Financing Global Growth Companies International Growth Companies Regional Growth Companies Local Growth Companies Fund of Funds Growth Capital Business Angel Matching Loan Guarantees Potential Revenue Million Euro Funding Need Million Euro
/ side12 Vækstvirksomheder - 50 mia. kr. Private ventureselskaber Andre private finansieringskilder Vækstfonden Private investorer 4 mia. kr. 6 mia. kr. 10 mia. kr. 40 mia. kr. V æ kstfonden’s leverage effect
/ side VC in Denmark 25. juni
/ side25. juni Main Attractors in the Danish Market Strong Research Base Entrepreneurial Culture Flexible Labour Market Dynamic Technology Clusters
/ side15 VC-backed companies’ attraction of foreign capital (relative to GDP; 2007) 0,00% 0,05% 0,10% 0,15% 0,20% 0,25% DKSFINUKIRLNLNOCHEBFPDAIEL Nationale investorerUdenlandske investorer
/ side25. juni Key Venture Capital Players
/ side25. juni Geographic Distribution of VC Investment Large concentration around Greater Copenhagen Generally centered around universities and research institutes
/ side25. juni Top 3 Industries in Denmark % of Total Amount Invested
/ side Market developments and challenges 25. juni
/ side Challenge: Lack of funds, low new/early stage investment activity 25. juni
/ side25. juni Annual Capital Raisings By VC Funds € Million Total Capital Under Management DK: € 2,983 Million
/ side25. juni Total VC Investment activity in Denmark
/ side25. juni Due to Follow-On Investments New Investments Under Pressure
/ side25. juni Seed Investment at All Time Low
/ side Challenge: Weak exit options, returns under pressure 25. juni
/ side25. juni juni The Global Financial Crisis Puts Exit Markets in Reverse Source: VentureXpert
/ side25. juni juni IPO Valuations Particularly Hard Hit Source: VentureXpert
/ side25. juni juni Entry Valuations Falling Source: VentureXpert
/ side25. juni juni Holding Periods Rising Steadily Source: VentureXpert and Vækstfonden
/ side25. juni Raising money for new ventures increasingly difficult New venture capital funds need to be raised Danish VCs under pressure to deliver attractive exits Exit timing is crucial Key Points
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