1. Presentation by Dr. Andreas O. Tobler October 19, 2010 Tento projekt je spolufinancován Evropským sociálním fondem a státním rozpočtem České republiky

2. Private Equity is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange

3. Private Equity is generally used to ➤ develop new products and technologies ➤ to expand working capital ➤ to make acquisitions or to strengthen a company’s balance sheet. ➤ to resolve ownership and management issues or a succession in family-owned companies ➤ to buy out or buy into a business by experienced managers

4. Venture capital is, strictly speaking, a subset of private equity and refers to equity investments typically in less mature companies (i.e. start- ups) made for ➤ the launch ➤ early development or ➤ expansion of a business.

5. Venture Capital is raised primarily from ➤ Friends & Family ➤ Private Investors (also referred to as “Angel Investors” or “Business Angels”) ➤ Institutional Investors

6. The term “ Friends & Family” investors is self-explanatory; they typically invest less than $100,000 in a start-up as a 1 st round financing Jokingly, they are sometimes referred to as “FFF”, which stands for "friends, family and fools"

7. Private or Angel Investors are typically affluent individuals who provide capital for a business start-up Private or Angel Investors typically invest between $100k to $2 million in a 1 st or 2 nd round financing An increasing number of angel investors organize themselves into angel groups or angel networks to share research and pool their investment capital

8. Institutional Investors are organizations which pool large sums of money and invest those in different asset classes, including Venture Capital Institutional Investors typically invest $2+ million in 2 nd and follow-up rounds of financing

9. Types of typical Institutional Investors include:  banks  insurance companies  retirement or pension funds  hedge funds  investment advisors  mutual funds

10. BioStartUp Co. Year 1Year 2Year 3 Business Plan €20,000

11. €200,000 30% of Capital BioStartUp Co.

12. Equity 70% Equity 30% Cash €20k 9% Cash €200,000 91%

13. Internet - the source: http://www.vfinance.com http://angelsoft.net/startup-tools/investor- searchhttp://angelsoft.net/startup-tools/investor- search http://www.startangels.ch/ …however, there are many thousand options!

14. “…finding venture capital in what one expert calls "the worst country" in Europe for startups” (The Prague Post, March 3, 2010) http://www.thebusinessplace.com/vent ure-capital-in-Czech%20Republic

15. Private equity news resources: http://www.altassets.net/private- equity-news/by-region/europe/central- eastern-europe/czech-republic.html

16. Go to the source: http://www.genesis.cz/index_en.html

17. Network! Network! Network!

18. Go abroad! Set up a subsidiary in a “venture friendly” country with good venture capital infrastructure, e.g. USA, UK etc.

19. Build your business creatively with other funding/revenue sources first: ➤ Grants ➤ Strategic alliances ➤ Revenues

20. 1. What is “private equity” 2. What is “venture capital” 3. Name three categories of investors 4. How much does each category typically invest? 5. If you can’t find venture capital, name an alternative source of funding 6. Name a country with a good venture capital infrastructure