FIFTH ANNUAL WIPO FORUM ON INTELLECTUAL PROPERTY AND SME

Intellectual Capital ReadinessOutreach and Support Programs on Intellectual property Financing

INNOVATION ON SME FINANCING The experience of the Portuguese SME and Innovation Agency (IAPMEI)

Jaime AndrezChairman of the Board of Directors of IAPMEI

Geneva, 13-14 September 2007

• Government Agency whose mission is to support economic policies

oriented to micro, small and mid-sized companies

• Services provided to companies by IAPMEI are divided into the

following major categories:

• Innovation and business environment

• Grants for investment;

• Technical Assistance; and

• Access to finance for SME’s.

IAPMEIPortuguese Agency for SME

Provides co-investment

and other risk-sharing

features to the venture

capital and private

equity industry

Provides guarantees to

credit enhance the cash-

conversion of bank

loans through

securitisation

Provides guarantees

to reduce the

exposure of mutual

guarantee societies

Public Instruments for Risk Sharing

MutualCounter- Guarantee

Fund

CreditSecuritisation

GuaranteeFund

VentureCapital

SyndicationFund

StateState

INOFINFinancial Innovation Framework

To promote efficiency in banking intermediation

to stimulate the enlargement of capital markets

To adjust existing instruments to the specific

profiles of SME needs along their life cycle

Main Objectives:

BankIntermediation

MutualGuarantee

Banks

LoanSecuritisation

EquityChain

OriginationPlatforms

VentureCapital Equity

Markets

Hands -- onProximityCapilarity

Hands- - offImmaterial

Scale

INOFINRisk Sharing with Market Players

SA

VIN

GSS

ME

The Rational: Incomplete Nature of the Financial Markets

Financial MarketsFinancial Markets

Supply(Operators)

Demand(SME)

MIS-MATCH

Business Profile• Stage position in “life curve”• Level of specialization• Critical size

Available Resources• Human Capital• Financial Structure

Entrepreneurial Culture• Entrepreneurial spirit• Market culture

Management Skills• Management Teams• Organization• Information Systems

MIS-MATCH

Determined byEnvironment• Regulatory issues• Regulation • Taxation• Contracting and Law

Transaction Costs• Scale of Operations• Geographical Dispersion• Appraisal / Evaluation

Risk-Reward Patterns • Asymmetric Information• Risk Perception• Risk Profile of operators

Liquidity • Nature of assets • Secondary / Exit Markets

Determined by

There’s a role for State under certain circumstances

Insufficient coverage for certain segments

Segments of limited attractiveness for financial operators

- Financial Gap -Demand and Supply

Constraints

INOFIN - Programs

along the business life cycle

FINICIA FINCRESCE FINTRANS

Co

mp

an

ies

life

cyc

le

time

FINICIA ProgrammeFinancing SME Early Stages

Facilitating

access to

finance for

Entrepreneurs

and Small

Companies at

the initial

phases of their

life cycle

HIGH INNOVATION PROJECTS

MICRO BUSINESS START-UPS

REGIONAL BUSINESS INITIATIVES

FINCRESCE ProgrammeFinancing SME Growth Strategies

Optimizing

company

financing

conditions

necessary to

promote growth

strategies and

strengthen their

competitiveness

Upgrading on Risk Profile

Promote Market Reputation

Customized Financial

Products and Services

FINTRANS ProgrammeFinancing Equity Transmission and

M&A

Encouraging

founders

succession

and/or

transfer of assets

into new value

chains, thus

inducing

regeneration of

the Economy

Company RestructuringMergers and Acquisitions

Management CapacityMBO-MBI

FINICIA Platforms“Eco-systems” for Start-Ups

VC Companies

SME

Local Network

Venture Capital

Syndication Fund

RiskSharing

Business Angels Corporate Ventures

ProcurementApproach

ProjectEvaluation

InvestmentForum

BusinessFollow Up

Incubators ResearchInstitutesBusiness

ChambersUniversities Development

Agencies

FINICIA Figures

Fund Raising

New Companies, Investment and Job Creation

10 million – New venture capital fund97 million Euros 75 million – New credit lines (for start ups) 12 million – New mezzanine regional funds

111 new companies – 10% of highly innovative projects17 million euros of total investment381 new jobs

Creation of 13 FINICIA Platforms near universities, with 85 partnersCreation of KIT FINICIA with standard documents such as shareholders’

agreements and companies bylaws

Favourable Environment

INOFIN

is a contribution to ending the waste of

ideas and entrepreneurs

in Portugal.

INVITATION TO WPSMEE DELEGATESFORTHCOMING EVENTS IN PORTUGAL

OCTOBER 8th – 9th 2007 EUROPEAN UNION PRESIDENCY FORUM ON FINANCING INNOVATIONBEST PRACTICES – From Ideas to Market

EUROPEAN COMMISSION + IAPMEI

OCTOBER 10th 2007MUTUAL GUARANTEE INTERNATIONAL SUMMIT

EUROPEAN ASSOCIATION (AECM) + SPGM + IAPMEI

DECEMBER 6th 2007 CONFERENCE ON SME’s

EUROPEAN COMMISSION + IAPMEI + DGE (Ministerial Dept.)

JANUARY 2008 (DATE TO BE DEFINED)CONFERENCE ON INTERNACIONALIZATION OF SMEs

OEDC-OCDE + IAPMEI + AICEP (Investment & Exports Agency)

YOU ARE WELLCOME

and

THANK YOU FOR YOUR ATTENTION!