Investeren in radicale innovatie: rol voor private sector en voor de overheid Alex Brabers Executive Vice-President Gimv 19 April 2010

Presentation Main Titlep. 2 Venture capital as driver for Growth and Employment Josh Lerner, Professor Harvard: only 15% of economic growth stems from increased input. 85% is due to productivity increases, i.e. innovation. New ventures play a key role in innovation, more than innovation at established corporates. Venture capital is a more efficient screening process of innovation, more than corporate research and government. Venture backed companies perform better than other similar companies. EVCA: “Studies show that between 2000 and 2004 European private equity and venture capital financed companies created 1 million new jobs, which translates to a compound annual growth rate of 5.4% per year (eight times the EU25 total employment rate of 0.7%). Between 1997 and 2004, the average employment growth in buyout-financed companies was 2.4%, compared to 30.5% for venture-backed companies.”

Presentation Main Titlep. 3 Key success factor for VC-centra in the US: a buoyant ecosystem in Boston and the Valley Venture capitalists Supply of money Support the development Role models VC backed companies Successful entrepreneurs CTO’s, developpers Stock options Knowledge of the VC model Service providers Headhunters Auditors Lawyers Presence of Corporates Suppliers Customers Acquirers

Presentation Main Titlep. 4 Houston, we have a problem

Presentation Main Titlep. 5 Houston, we have a problem Hofstede: cultural dimensions

Presentation Main Titlep. 6 VC in Europe: shortage of money or rather shortage of return ? European Venture 3-,5-,10-Year Rolling IRRs

Presentation Main Titlep. 7 Government policy can make a difference Israel Technology driven growth Incubators Yozma (1992): a 100 mio USD fund-of-fund International funding The Chief Scientist Tax policy Singapore (versus Jamaica) Same GDP in 1965 Infrastructure, education, corruption-free, open economy Encourage entrepreneurship in targeted sectors Awards for failed entrepreneurs The origin of US venture capital Government contracts University funding Small business investment companies: SBIC’s

Presentation Main Titlep. 8 Government policy can make a difference Flanders Technology Micro-electronics: IMEC Biotech: VIB Biotech fonds Vlaanderen PGS, Innogenetics, Ablynx, Cropdesign, Devgen,… (New materials) Telenet Breaking into the Belgacom monopoly Leveraging European liberalisation Stimulating the private sector Creating one of the highest broadband penetrations in the OECD

Presentation Main Titlep. 9 Key success factors for VC in Flanders Reputable R&D centers Internationally compatible legal system Tax efficient incentives Sustained, matching government funds Critical mass / government choices Innovative government procurement From research to spin-out Access to international entrepreneurs

Presentation Main Titlep. 10 Suggestions Critical mass in the eco-system Define strategic axes, implicating some negative choices Healthcare Biotech Cleantech … Sustained efforts Finance incubation, private VC’s will not yet support this Transition from R&D to company Support existing tech transfer centers Vinnof-like approach