1. TGFS- Venture Capital Fonds for Saxony
„2nd Brussels Workshop“ on the Future of the European Cohesion Policy“
Thursday, 12 November 2009
| 9. November | Helmut Stier

2. Economic and structural policy goals of the TGFS
Saxony: medium-sized industrial base with focus on technology; high level of qualifications; well established research infrastructure; lack of large enterprises with effective research departments
Growth through innovation comes primarily from company assets and new businesses
Market failure in the early stage of funding; this leads, amongst other things, to insufficient commercial exploitation of R&D potential and comparatively low number of innovative business formations (e.g. study by Centre for European Economic Research)
| 9. November | Helmut Stier

3. TGFS Holding GmbH & Co. KG EFRE: 35 Mio. EUR Land: 10 Mio. EUR
Structure and funds
TGFS makes available venture capital für young technological enterprises.
Investors:
TGFS Holding GmbH & Co. KG
45 Mio. EUR
Free State of Saxony
Silent participation
EFRE: 35 Mio. EUR Land: Mio. EUR
18 Mio. EUR
27 Mio. EUR
LBBW Sparkasse Chemnitz Sparkasse Leipzig Sparkasse Dresden
15 Mio. EUR
TGFS Seed
20 Mio. EUR
TGFS Start up
40 Mio. EUR
2 Mio. EUR
13 Mio. EUR
Start-up financing
Seed financing
| 9. November | Helmut Stier

4. Conditions for participation
Enterprise
phase
Seed and Start-up
Product (ideas) ready to be launched onto the market within 18 months
Young enterprises
Maximum 5 years old
Area of
technology
Information and telecommunication technology
Semiconductor and microsystems technology
Internet / New media
Innovative high tech sectors
Material sciences
Environmental and energy technology
Life Science / Medical technology
Funded by
Developing products close to the market
Funding requirements for the product
Product launches
If necessary establishment of production 4
| 9. November | Helmut Stier
| 9. November | Helmut Stier

5. How the TGFS works
Close to the market: as far as known first tendering procedure for funds management for a EFRE venture capital fund in Germany. For the fund management, raising additional funds was an award criterion in the tendering process. This meant that private investors could become involved in the fund and the fund management. Commitment from private investors used to be focused on company level, not on fund level.
Disproportional loss distribution through release from liability (50% for private investors) make participation in TGFS attractive for investors.
TGFS should achieve a financial return in line with the industry standard. Profit orientation of investment decision through incorporation of investors via an Investment Committee.
Investment period basically up to five years after start of the fund. Settlement on the basis of Structural Fund regulations until 31/12/2015.
| 9. November | Helmut Stier

6. Incorporation of the TGFS in regional networks
Typical of VC is the close support given to firms by the capital provider in all stages of participation
This essential support is guaranteed by TGFS through the presence on the spot of the savings bank partners and the pan-regional and international network provided by CFH (an associated subsidiary of Sachsen Bank/LBBW)
The TGFS pursues active networking and supports this through existing structures in Saxony
| 9. November | Helmut Stier

7. Interim evaluation of the TGFS model
The means and instruments for promotion are innovative, above all through the competitive tendering procedures for fund management
To date, 11 investments have been made, at a cost of 5.4 million euros (since April 2008)
Increased use of innovative financial instruments under Strucural Funds Programmes
Problems encountered when establishing the TGFS: High complexity of EU rules requires great efforts
Strengthening of the R&D potential through increasing the efficiency of economic performance of enterprises remains essential
"European added value" through the programming process/Lisbon strategy
| 9. November | Helmut Stier