1. Venture Capital funding of public spin-offs
OECD workshop on high-technology spin-offs from public sector research
Paris, December 8th, 1999
Risto Kalske
Director, Technology Transfer
SITRA, Finnish National Fund for Research and Development

2. Sitra’s structure: principals and functions
Research
Training
Innovative
operations
Financing of
technology
companies
International
funds
Regional funds
Commercialisation of technologies
Finnish Parliament
Supervisory Board
Board of
Directors
Management

3. Sitra’s Operational Sectors
Corporate finance
Seed finance and commersialisation of technologies
Investments in venture capital funds
Research and innovative operations
Training

4. Sitra's Venture Capital Activities
155 pcs (726 Mmk, ECU 121 million)
Sitra Venture Capital
48 (201 Mmk)
102 (375 Mmk)
Direct investments
Inv. in technology transfer
Investments in funds
Tech.transfer
7 (16 Mmk)
Seed and start-up
Growth stage
Strategic investments
Regional funds
60 (148 Mmk)
42 (227 Mmk)
25 (145 Mmk)
16 (40 Mmk)
5 (150 Mmk)
Privatised part of Sitra
Bio Fund Management Oy
Eqvitec Partners Oy
Sitra Fenno Management Oy
(Sitra 31%, managers 69%), 0,3 Mmk
(Sitra 30%, man. 70 %), 0,5 Mmk
(Sitra 40%, managers 60%), 0,8 Mmk
Sitra Bioventures Ky
Eqvitec Tech Fund I Ky
Fenno Program
74,5 Mmk
74 Mmk

5. Clear tendency from public to private investments as the VC business matures
Source: FVCA

6. Motives for VC investment; public investments shift to the early stages
Source: FVCA

7. Sitra focuses on seed & start-up financing
International financing
Domestic venture
capital companies
Tekes
(Sitra)
(3rd round)
Sitra
2nd round
Sitra

8. Breakdown of Sitra's funding in 1998

9. Business maturity within Sitra’s portfolio companies in 1998
5 companies, EUR 7.8 million
36 companies, EUR 6.9 million
13 %
10 %
27 %
14 companies
EUR 16.1 million
27 %
24 companies
EUR 17.8 million
23 %
TOTAL
102 companies
EUR 63 million
23 companies EUR 14.2 million

10. Industrial distribution within Sitra’s portfolio companies in 1998
Medical companies (22 companies)
18.8 m
Industrial production (13 co.)
10.4 m
Other electronics (17 co.)
7.5 m
Biotechnology (11 co.)
6.0 m
Other manufacturing (2 co.)
5.2 m
Information technology (9 co.)
4.7 m
Chemical industry (7 co.)
3.2 m
Communication (5 co.)
2.7 m
TOTAL
102 companies
EUR 63 million
Consumer goods (5 co.)
1.7 m.
Transportations (3 co.)
1.4 m
Control and monitoring (7 co.)
1.3 m
Travelling (1 co.)

11. Management network of the regional funds
Tekno Advisors Oy, Oulu (100%)
Savon Invest Management Oy Kuopio (100 %)
Indekon Management Oy
Lappeenranta (100%)
Sentio Invest Oy, Tampere (100%)
Aboa Venture Management Oy Turku 25,2%

12. Network of regional funds
Teknoventure Oy, Oulu
Savon Teknia Oy, Kuopio
Karinvest Oy, Joensuu
Pikespo Invest Oy Ltd, Tampere
Midinvest Oy, Jyväskylä
Indekon Oy, Lappeenranta
Spinno-seed Oy, Espoo
Innoventure Oy, Helsinki

13. Network for technology transfer
Oulutech Oy
Oulu
Helsinki University Licensing Ltd. Oy
Helsinki
Tamlink Oy
Tampere
Oy Aboatech Ab
Turku
Finntech Finnish Technology Ltd Oy
Espoo

14. Public sector activities for R&D in Finland
P A R L I A M E N T
G O V E R N M E N T
Science and Technology Policy Council
Ministry of Trade and Industry
Other ministries and their institutes
Ministry of Education
National Technology Agency Tekes
Funds like:
SITRA
Kera Oy
Academy of Finland
Technical Research Centre of Finland
Universities
12/95-06

15. Universities and technology transfer
Universities and Sitra co-own 6 technology transfer companies in 4 university towns
The technology transfer companies
identify ideas with commercial potential
evaluate technologies
serve researchers in commercialising their idea (on a royalty sharing basis)

16. Future Development
Harmonized practices to commercialise university IPRs
Advanced Technology Transfer Network to
offer professional licencing services
enhance the birth of spin-off companies
offer international Technology Brokearage services
link the financing institutions to the spin-offs
advice on suitable options to utilize the IPRs

17. Three approaches to the commercial utilisation of innovations
Growth company
• true entrepreneurship
Innovation
Acquisition vehicle
• exit means
Sale/License of IPRs
• technology brokerage

18. VC criteria - special concerns with spin-off firms
Spin-offs
Early stage
Professional management 
Level of commitment 
Business plan 
Novelty value
Identified customer need 
Ownership of the IPRs 
Growth potential
Total financial plan 
Terms of partnership
Exit plan

19. Licensing is also a viable option for the commercialisation of IPRs
Scientist and entrepreneurship - a rare combination
The promotion of spin-off activities attracts top-notch researchers
Financial benefits tend to supersede scientific calling
Brain drain affects the quality of university research
Professionally organised licensing may offer a balanced win-win solution in many cases

20. Thank you!