1. Technology Transfer Accelerator Turkey (“TTA Turkey”) IP Conference Turkey
30 October 2014
Istanbul

2. Agenda About EIF About TTA Turkey
EIF Resources, Governance and Investments
Equity Highlights
EIF Technology Transfer: History and Characteristics
About TTA Turkey
Background, Structure and Objectives
TTA Turkey Fund
Targets, Investment Criteria, Investment Process and Structure
Main Terms & Conditions, Flow of Funding, Time Frame and Process
Investment Considerations and Assessment Criteria

3. What is the EIF? “
The leading developer of risk financing for entrepreneurship and innovation across the EU ”
Helping SMEs, micro-enterprises and European regions innovate and grow by making finance more accessible
Fulfilling our dual goal and pursuing EU policy objectives as well as financial sustainability
Addressing market needs by acting as a countercyclical investor in tough economic times
Working with financial intermediaries across the 27 EU countries, EFTA and all Accession countries

4. Involved throughout the Business Cycle
Technology Transfer Accelerator
Investing in VC funds
Investing in Growth Capital
Mezzanine
EIF Current Investment Focus
Technology Transfer
Proof of Concept
Business Angels
Seed Stage
Early Stage
Business Angels
Expansion/ Development Capital
Lower Mid-Market
Instruments to stimulate innovation, competitiveness and cross-border investment
Fill funding gap left by institutional investors
Support VC ecosystem and decrease dependency on public finance
Catalyse hybrid debt finance for growth
Strategic Challenges
European Commission Resources
EIB / EIF Resources
Member States / Private Sector Resources

5. European Investment Bank National & Regional Funds
EIF’s Resources “
EIF manages resources from different stakeholders ”
European Investment Bank
Risk Capital Mandate (RCR) EUR 5bn
Mezzanine Facility for Growth (MFG) EUR 1bn
European Commission
Competitiveness and Innovation Framework Progr. (CIP) EUR 1bn allocated to equity and guarantees
Risk-Sharing Instrument (RSI) EUR 120m
Progress Microfinance EUR 200m
National & Regional Funds
20 European and regional Funds-of-Funds including Germany, Portugal, Spain, Turkey, UK
14 Holding Funds supported by structural funds EUR 1.3bn

6. Equity Highlights 2013 2012 2011 2010 2009 2008 Equity Signatures
(EUR / m)
2013
2012
2011
2010
2009
2008
Equity Signatures
1 468
1 350
1 126
930
733
409
PE Assets under Management
7 904
6 952
5 919
5 367
4 103
3 535

7. EIF’s Governance “
Committed to the highest standards of governance and integrity ”
Board of Directors has a supervisory role and approves all EIF transactions
Chief Executive is responsible for the day-to-day management of the EIF
Audit Board and both in- and external auditors
oversee Chief Executive and Board of Directors
Risk Management, Legal
and compliance units

8. Marketable Product “Prototype IP” University / Research Organisation
EIF Technology Transfer Aims to Bridge the Gap between the Research and the Market
R&D
Technology Transfer
“Technology IP”
Marketable Product “Prototype IP”
University / Research Organisation
Spin-out
Market
Licensing
Collaboration
(Contract Research)
IP / Idea

9. EIF Technology Transfer History and Characteristics
History of EIF Technology Transfer Investments
Scale-up of activities since TTA study (2005)
No dedicated mandate
Investments so far with own resources, the European Commission and the EIB
33 operations in total
Characteristics of Technology Transfer Operations
Different shapes and sizes
Long lead times and low transformation ratio
Key point: Scale
Difficult fundraising periods

10. Long-term, Sustainable Vehicles
With Like-Minded Investors 
Close collaboration with TTOs 
Access to good scientific research 
IP adequately protected under relevant legislation 
No direct financing of research 
Governance - no investor involvement in investment decisions 
Independence and non-competition of Management Team 
Adequate incentives to Management Team 
Alignment of interests with long-term focus, up to years 
Minimum critical size ca. EUR 20-30m

11. EIF Technology Transfer Investments To Date

12. Agenda About EIF About TTA Turkey
EIF Resources, Governance and Investments
Equity Highlights
EIF Technology Transfer: History and Characteristics
About TTA Turkey
Background, Structure and Objectives
TTA Turkey Fund
Targets, Investment Criteria, Investment Process and Structure
Main Terms & Conditions, Flow of Funding, Time Frame and Process
Investment Considerations and Assessment Criteria

13. TTA Turkey
This project is co-financed by the European Union and the Republic of Turkey
This financing is provided from IPA funds allocated to Regional Competitiveness Operational Programme which is supported by EU and Republic of Turkey. The Contracting Authority of this Project is the Ministry of Science, Industry and Technology, DG for EU and Foreign Relations, IPA-PO, and final beneficiary is the Scientific and Technological Research Council of Turkey  

14. TTA Turkey – Project Level Background
Funded by IPA monies
Deadline for Project Implementation: 31 December 2017
End Beneficiary: The Scientific and Technological Research Council of Turkey (TÜBİTAK)
Project Amount: EUR 30.5 million
Project Components:
Cornerstone TTA Turkey Fund – EUR 26.3 million
Advisory Services and Networking for TTOs and TÜBİTAK – EUR 1.35 million
Visibility – EUR 200,000
Impact Evaluation – EUR 100,000
2012
2013
2014
Market Needs Assessment carried out
Business Plan for the Project submitted
Negotiations and Approval
Signature Date: July 2014
2015
2016
2017

15. TTA Turkey Project Structure and Main Objectives
IPA Resources
EIF as Advisor & Project Manager
IPA Commitment to
TTA Turkey Fund
Advisory Services and Networking
(Technical Assistance)
TTOs
TÜBİTAK
Visibility
Impact Evaluation
proceeds
TTA Turkey’s main purpose is to:
Establish an independently managed Technology Transfer Accelerator Fund that invests in commercialisation of technology intensive research coming out of universities and research centres
Increase the R&D commercialisation capacities of TTOs so that they can play a successful interface role between the industry and the university

16. TTA Turkey Fund Target Investments and Region
TTA Turkey to invest in:
proof of concept generation projects
university / research center spin-offs, start-ups
intellectual property (IP) assets / projects
return for equity into start-ups, spin-offs, and SMEs
100% of the investments to be made in Turkey
A minimum of 30 projects to be selected by the Fund Manager by 31 December 2017
At least 15 projects shall be identified and invested in the Target Region (12 NUTS II, 43 provinces)

17. TTA Turkey Fund Structure

18. Main Terms & Conditions
Target Fund Size
Indicative Maximum Amount of Funding
EUR 30 million
EUR 40 million
Maximum Contribution from IPA Funds
Minimum Third Party Capital (Private Investors)
Applicant’s Own Commitment in the Fund
EUR 26.3 million
EUR 2.8 million
1-5% of the total Fund size
Maximum Investment Amount to a Single Company/Project
EUR 2.5 million
Over 12 months
Maximum Duration of the Fund
10 years
Possibility of extension for 1+1 years  12 years
Deadline for the Fund’s Investment / Selection Period
Deadline for Disbursements by the Fund
31 December 2017
Portfolio Diversification
Minimum of 30 projects/companies
Target Industry Sectors
Generalist with preferred and excluded sectors as covered in details in the Call for EoI

19. Flow of Funding IPA Contracting Authority EIF Special Account TTA Fund
Co A
Co B
Co C
Co D
Start up 1 2 3 4 5 6
Monies to Special Account
Monies to Fund on Capital Calls from Fund Manager based on establishment of Companies once start up
invested
Monies to Companies once Projects identified – before 31 Dec 2017
Monies to projects on
milestone basis during
the Term of the Fund
Monies to Contracting
Authority from Special
Account – after 31 Dec 2017
Thereafter from whomever
transfer of holding has been
made to (if anybody)
on receipt from TTA Fund
Monies to Fund due to project spin-outs, licensing, contract research with consequent dividend payment
Monies to Companies from successful projects on spin-outs, licensing, contract research, other
Co D
Start up

20. Time Frame and Process Next Steps Deadline
Requests for Clarifications from Applicants Accepted
Friday, 15 August 2014
EIF to Reply to Clarification Requests
Friday, 22 August 2014
Call for EoI Open for Applications
Thursday, 11 September 2014
First Screenings
September 2014
Scoring and Second Screenings
October 2014
Due Diligence of Shortlisted Applicants
Legal Negotiation & Execution
December 2014

21. Assessment Criteria & Scoring
QUALITY ASSESSMENT CRITERIA
WEIGHTING 1
Project Relevance, Quality and Coherence
Evaluation of the Fund focus and proposed investment strategy, including viability of Fund’s size.
Evaluation of the Fund Manager’s team profile, including but not limited to:
Team stability and dynamics.
Its ability to implement the Financial Instrument
Operational, financial, technical and VC competences. Capabilities as members of Boards and/or committees of an investment and/or advisory nature.
Prior experience in technology transfer field, commercialisation of research and development, business development, IP law.
Evaluation of Applicant’s investment processes, including deal flow generation, ability to invest, ability to add value to companies and exit strategy.
40 points 2
Project Maturity, Investment Readiness
Demonstration of ability to raise at least EUR 2.8 million of the Fund from private investors.
Demonstration of ability to source deals in Turkey (SMEs/projects).
Investment readiness of the proposed structure like maturity of the proposed legal structure, including internationally proven best market practices; outline of any different legal entities required; planned establishment costs and details thereof; detailed term sheet; proposed law firm etc. in order to execute the closing of the fund timely and efficiently. 3
Institutional Capacity & Sustainability
Fund Manager organisation, structure and long-term viability.
Assessment of the corporate governance in place.
Assessment of legal structures and independence.
Terms and Conditions, including management fee and profit share arrangements.
Assessment of the alignment of interests between the Fund Manager and the Investors.
Assessment of Reporting and Control Procedures.
20 points

22. Investment Process and Indicative Timelines
First Screening
Second Screening
Due Diligence
Board Approval
12 months
Understand
concept
Based on preliminary questionnaire / concept note
Investment readiness
Physical meeting (typically in Luxembourg), opportunity to articulate investment opportunity, understand EIF
Stress testing and verification
EIF team conducts on site visits (min. 2 days). May, or may not lead to term sheet
Legal documentation
After EIF BoD approval, legal docs drafted on behalf of Manager. EIF reviews importance of legal counsel

23. Investment Considerations
First Screening
Second Screening
Due Diligence
Board Approval
Partner Institutions
Market
Investment Strategy
Deal flow
Potential Investors
Investment Process
Team
Track Record
Governance
Management Company
Economics
Remuneration / Incentives

24. Criteria (1/4) Partner Institutions Deal flow and pipeline
Investment strategy
Metrics: Research budget, peer group comparisons, invention disclosures, IP filed, IP awarded, growth rates, commercialisation income, encumbrances, 3rd party agreements
Structure: Organisation structure of TTO, roles, ownership of TTO
Policies: IP policy, rules, regulations, ownership rights
Activities: Industry co-operations, advisory services, contract research, etc.
Financials: For TTO; revenues, royalty income, grants, licenses, cost of sales, gross profit, operating costs, gift aid, dividends
Origination: Source of projects, networks (formal and informal), privileged / preferential access, rights of first refusal, option rights
Fees: Payments in lieu of access to pipeline
Historical Analysis: e.g. 3-5 years evolution of deal flow by source, sector, etc.
Selectivity Ratio: Historical examples / experience
Pipeline: Current and future opportunities
Licensing / Spin-outs: Proposed route for commercialisation
Strategy: Geographical focus, stage focus, sectors, investment sizes, follow- on and reserve policy, holding periods, role in financing rounds
Fund Size: Justification for size through bottom-up analysis, min / target / max size, modification to strategy according to size scenarios
Target Profiles: Criteria for investment targets (company profiles)
Co-investors: Envisaged co-investors at different stages of investments
Exits: Strategies based on previous examples 24

25. Criteria (2/4) Market / Competitors Potential Investors
Investment Process
Trends: Targeted sectors, challenges faced, evolution in previous years
Competitors: Financing, other sources of finance, private / public
Demand Side Economics: Analysis and evidence of demand for targeted projects
Sponsors: Main investors , anchor investors , special rights (e.g. fees, carry, information, co-investment, etc.)
Names / Profiles: Like-minded, long- term investors with soft and hard commitments
Team Investment: Investment to fund, e.g. 1%, 2%, 5%, absolute amount, split between team members (see also remuneration / incentives)
Fundraising Strategy: List of other potential / targeted investors, status of contacts, potential commitments
Process: Origination, screening, project / deal review, due diligence, deal approval, deal structuring, negotiation, deal completion, contracting third parties
Decision-making Bodies: Bodies, or individuals take final decisions at each stage, delegations foreseen

26. Criteria (3/4) Team Track Record Governance
Composition: Envisaged team responsible for managing fund, key individuals from TTO / other, secondees, new recruits (profiles)
Profiles / CVs: Full CVs of team members and key individuals, specific dates, positions held, achievements
Experience: Collective team experience in IP management, licensing, creation of companies, investing,, strategy, consulting, etc.
Team Collaboration: Years worked together, prior collective working relationships
Workload: Time commitment to fund vs. other activities, activity allocation, other board seats
Board Members: CVs
Previous funds: Metrics, vintage, total size, fund cash flows, net and gross IRR, LPs, amounts
Companies: Previous / current funds, dates of investment, investment at cost, FMV (EVCA), gross multiples, forecast exit dates, exit scenarios
Individuals: Track record of individuals, other investment / relevant activity (e.g. licensing deals)
Partner Institutions: Licensing and spin- out company creation, notable success stories (e.g. Nobel prizes), products developed
Structure: e.g. UK-LP, SCR, FCR, NV, SPRL, SICAR, KB, etc.
Relationships: Overall structure and relationships between governing and decision-making bodies. Role and function of each of the bodies. Specific individuals involved and respective voting powers and rights
CoI: Conflict of interest management, for example with (other) investors in fund, any investor (LP) involvement in decision-making
Advisory Board: Composition, largest investors, etc.

27. Remuneration / Incentives
Criteria (4/4)
Management Company
Economics
Remuneration / Incentives
History: Evolution, founders, key dates and events in development, significant changes in organisation, strategy, ownership
Legal Status: Capital structure, ownership
Regulation: How the management company shall be regulated, adherence to AML/KYC
Budget: Detailed forecast budget for Management Company over lifetime of the fund, under different scenarios, e.g. min / target / max size
Management Fee: Justification for level of management fee, use of fees, fee offsets
Alignment of Interests: Team investments to fund align with investors, long-term time horizon, team stability / instability
Remuneration: Detailed breakdown of remuneration for all team members including base salaries, bonuses
Evolution: Historical evolution of remuneration for individual team members in previous years
Incentives via Carry: Repartition of carry to individuals, unallocated carry if applicable, carry to partner institution(s)

28. Thank You! Jose Romano Head of Region j.romano@eif.org
European Investment Fund
37B, Avenue J. F. Kennedy
L-2968 Luxembourg
Tel.: (+352)
Fax: (+352)

29. Technology Transfer Accelerator Turkey (“TTA Turkey”) IP Conference Turkey
30 October 2014
Istanbul