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High-Tech Gründerfonds – seed investor in high-tech start-ups Success factors of a public-private partnership Knowledge Economy Forum 2010 Diversification.

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Presentation on theme: "High-Tech Gründerfonds – seed investor in high-tech start-ups Success factors of a public-private partnership Knowledge Economy Forum 2010 Diversification."— Presentation transcript:

1 High-Tech Gründerfonds – seed investor in high-tech start-ups Success factors of a public-private partnership Knowledge Economy Forum 2010 Diversification through Innovation: Prospects for Growth May 5, 2010 Dr. Alex v. Frankenberg High-Tech Gründerfonds Management GmbH

2 German economy generates huge trade surplus with high-tech products German industries are leading in the world economy (machine tools, automotive, medicine, chemicals, …) Long and successful tradition of small and medium sized companies (Mittelstand) On one hand …… on the other hand Start-up industry under-developed in Germany: 16 seed investments 2004 and 2005 by members of the German VC association Venture Capital industry rapidly declining / escaping to later stages No start-up in DAX 30 since SAP But: Billions of government money spent on technology development The challenge in 2004: Vastly underutilized potential

3 | Seite 3 Founded: 2005 Volume:272 Mio. EUR Investors: German Government, KfW, BASF, Dt. Telekom, Siemens, Daimler, Robert Bosch, Carl Zeiss Planned duration: 6 years investment plus 7 years disinvestment period Focus:Innovative high-tech companies in the seed phase (start of operations < 12 months) Investment: – equity per company lead investor Support:Support through local coaches value add by High-Tech Gründerfonds team High-Tech Gründerfonds: Key facts

4 | Seite 4 Venture Capital model: HTGF-business model is based on appreciation of shares, exit Duration limited to 12 years, investors expect return Focus on high-tech and growth companies Long-term incentive based on returns to investors venture capital High number of investments (40-50 p.a.); in total Standardized, attractive conditions: 1. round: 500 k for 15% of the shares plus convertible loan as anti-dilution Acceptance of higher risks Focus: German high-tech companies younger than 1 year public support program Identity: Venture capitalist or public support program?

5 | Seite 5 Selection process: 4 steps to the investment IIIIIIIV reference by coach, business angel, VC or other network partner founder submission of exec. summary & business plan due diligence meetings with management ext. experts investment committee presentation review by X weeks (depending on founders)1 week4-6 weeks~ every 2 months

6 | Seite 6 Closing of 186 investments 1) / 226 commitments Closing of 138 follow-on investments by third parties 2) External capital raised: >209 million Euro Thereof: 71% private capital Eight exits, five profitable Operations Set-up of a high-number of working partnerships Impact on the early stage market on several levels (market share of 50% in the Germany seed market) Number of produced paper millionaires: 89 Set-up of high performance organization Fun Other results Main results 1) 4 in 2005, 52 in 2006, 40 in 2007, 42 in 2008, 34 in 2009, 14 in ) Various public and private investors

7 | Seite 7 Involvement of government representatives, experts with background of public financing and private investors Private contribution to the fund (17m, 6,3%) Strong understanding of the venture capital business model Systematic inclusion of relevant know-how (e.g. mistakes from the past) Independent management company that can focus on goals (no political influence) Right timing at the bottom of the market Success factors – strategic and conceptual

8 | Seite 8 Freedom to set up management company with few restrictions (no strings to an existing organization) Set-up of a high-performance organization: - Consistent breakdown of company goals and variable pay on individual level - High recruiting standards - Fluctuation consistent with performance Significant freedom for investment managers - Laptops, mobile phone and mobile for everyone (2005) - no forms to allow job related travel - Very flexible work hours, no time sheet recording Strong effort to build a positive performance culture Success factors – operational

9 | Seite 9 … looking forward to a fruitful cooperation! High-Tech Gründerfonds Ludwig-Erhard-Allee Bonn Dr. Matthias Dill Benjamin Erhart 0228 / Klaus Lehmann 0228 / Dr. Andreas Olmes 0228 / Andreas Quauke 0228 / Kay G. Balster 0228 / Clemens von Bergmann 0228 / Dr. Caroline Fichtner 0228 / Dr. Bernd Goergen 0228 / Dr. Michael Nettersheim 0228 / Dr. Mehran Rafigh 0228 / Marco Winzer 0228 / Holger Heinen 0228 / Markus Kreßmann 0228 / Dr. Björn Momsen 0228 / Simon Schneider 0228 / Romy Schnelle 0228 / Dr. Michael Brandkamp 0228 / Dr. Alex von Frankenberg 0228 / Curtis MacDonald 0228 /


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