1. Interviews with potential financial operators for early stage investments in Latvia Objectives  Identification of potential investors  Evaluation of their perceptions and investment needs in particular – identification and assessment of effective and convincing incentive schemes for facilitation of early stage investment

2. Interviews with potential financial operators for early stage investments in Latvia Investors into the funds Fund Management Companies Banks Local 033 Foreign 440

3. Interviews with potential financial operators for early stage investments in Latvia Results:  There are no legal, formal or technical barriers for early stage investments in Latvia  Limited interest of foreign financial operators towards investing in Latvia through VC instruments  No specific perception of high-tech potential of Latvia both in the eyes of foreign and also local financiers; no sectoral advantages are perceived;

4. Interviews with potential financial operators for early stage investments in Latvia Results:  coverage of management expenses of the fund over its starting period is a very convincing incentive for private investors  ‘upside’ incentives, which lead to apportioning of profits favouring private investors are another strong motivator, however this should be coupled with minority share of private co-financing and strict passivity of public body in the fund’s investment process (i.e. very much the Yozma-alike approach)

5. Interviews with potential financial operators for early stage investments in Latvia Results:  Most foreign operators perceive Baltics as one market  At the current level of development of the innovation support system, the positive impact of fostering of Venture Capital funding will be very limited towards the high-tech and innovative companies

6. Interviews with potential financial operators for early stage investments in Latvia Recommendations:  An effective mean of overcoming the small market disadvantage would be joint actions of Baltic countries in applying the incentive schemes facilitating early stage investment  In order for Venture Capital funding to become effective it should be preceded by developing principles of financial and non- financial support at earlier stages of company lifecycle (seeding and start-up).