1. Martin Skoglund, Investment Manager, Wood & Hill Investment & Martin Lackéus, PhD Candidate, Chalmers University of Technology founders of the following companies Idea on seed capital

2. Background Gothenburg’s regional growth is lower than the Stockholm region – Stockholm is a larger region, and attracts many HQs – Large public sector, well developed financial sector Companies need capital to grow – Stockholm received 50% of the total amount of venture capital allocated in 2010 – Gothenburg received 5% of the total amount of venture capital allocated in 2010 The most obvious lack in Gothenburg is seed capital – Very few actors can and will invest in the seed phase We need to think anew!

3. Seed capital in Gothenburg region There is a total of around 50-100 MSEK available per year in seed & early – Traditional types of venture capital funds are difficult to set up in Gothenburg - it is difficult to achieve reasonable IRR in early stages – Chalmers, ALMI, VGR and Innovationsbron are examples of soft seed money, ~10-20 MSEK yearly – Almi Invest, Innovationsbron, Chalmers Innovation Seed Fund, Chalmersinvest, Startinvest are examples of slightly less soft seed / early stage money, ~40-50 MSEK yearly (a guess) – There are some business angels active in the Gothenburg region, often in syndication, ~10-20 MSEK The seed share of this is around 10-20% - 5-20 MSEK

4. The challenge The capital market doesn’t dare to invest in the seed phase – There is not a viable business case if calculating strictly by Return on Investment Some business angels still invest in the seed phase – This is often based on a personal interest or other non-economical reasons Business angels have today limited possibilities to build rational portfolios – Those that have invested have invested directly into the start-ups, with mixed to low success – Those that could be interested need a better opportunity to distribute risk

5. SeedEarly stageGrowth Institutional investors NO!Maybe…YES! Business angels Maybe…YES! Public support capital YES! Maybe… Investor’s rationale

6. SeedEarly stageGrowth Institutional investors NO!Maybe…YES! Business angels Maybe…YES! Public support capital YES! Maybe… Investor rationale

7. …to invest in… …start-ups in seed stage Investor’s rationale … Because it is fun and interesting Because you help your fellow citizens and maybe your own kids Because you want your own region to prosper Non-monetary returns, feels good Appealing to the heart, not so much to the wallet!

8. …to invest in… Because it is fun and interesting Because you help your fellow citizens and maybe your own kids Because you want your own region to prosper Non-monetary returns, feels good Appealing to the heart, not so much to the wallet! …start-ups in seed stage Investor’s rationale … Because it is fun and interesting Because you help your fellow citizens and most often your own kids Because you want your own region to prosper Non-monetary returns, feels good Appealing to the heart, not at all to the wallet! …non-profit societies (sport etc.)

9. How do non-profit societies finance their operations?

11. Let’s use the metaphor of lotteries for start-ups

12. E ENTREPRENÖRSVERKET

13. E Entreprenörsobligation Pris: 5.000 kr Let’s use the metaphor of lotteries for start-ups

14. Not a pure lottery, but emulating some of its mechanisms People and companies buy a lottery ticket / bond each year – 500 / 5.000 / 50.000 / 500.000 SEK The money is invested into regional start-ups in seed stage Exit money is used to give money back to ticket holders, in traditional lottery manner – 33% to all – 33% to a few selected winners, getting a substantial amount of money – 33% to one winner Managed in co-operation with the universities, tickets sold by students in entrepreneurship – Investment managers or managed through affiliates such as Chalmers Innovation – Students sell tickets to learn selling and to finance students’ study visits to entrepreneurial regions Let’s use the metaphor of lotteries for start-ups

15. Set-up 2012 year’s fund of 10-20 MSEK 2013 year’s fund of 10-20 MSEK 2014 year’s fund of 10-20 MSEK Management / administrative team Investments, 0,3-0,5 MSEK per case Customers – companies and people with a heart Students selling each year Investment committee Investments, 0,3-0,5 MSEK per case Web-TV for follow-up & reporting, student led

16. Deliverables Doubled amount of available seed funding in a region At least 25 investments every year Feeding more cases into early stage and growth capital markets Boosting a region’s entrepreneurial ecosystem with more seed capital – Incubators, entrepreneurship schools, innovators, etc Publicly promoting entrepreneurship and the start-up community – Could be an interesting partner to national media actors

17. Others do similar things…