Financing innovation in early stage

April, 2d 2012 Jacques MELER

2

Business Angels situation in France 2011

• 3950 Business Angels (+10% /2010)

• 76 Associations (+5%)

• 327 investments achieved (+9%)

• 44,5 M€ invested (for total fund raising of 111M°€)

• Average investment : 132 K€ for BA (195K€ in 2009)

(source France Angels as of December 31st 2011)

2010 INVESTMENTS

Breakdown by activity :

NTIC 45%

Energie / Cleantech

7%

Santé / Biotechnologie

14%

Bien de consommation /

distribution 8%

Services et transport

10%

Industrie / Chimie 7%

Autre secteur 9%

% EN 2010

R&D Take off Maturity

25 - 150 K€

REVENUE

TIME

START UP FINANCING CYCLE

Awards Government help / Incubators/seed capital

Birth Survive 1st Success

Business Angels

50 - 500 K€

Early stage

100 K€ à 3 M€

2 à 10 M€

Venture Capital

Capital Developpement

5 M€ - ….

Public Market

Idea/Concept

Prototype

Proof of concept

1st client

Product launch

Sales growth

Industrial growth

international

5

THE REAL CYCLE !.......

6

Mission of Seed capital and early stage financing

Finance the « go to Market »

• Prototypes or pre-series are achieved, validation is done or on

going

• Search for 1st reliable customers (≠ subsidized projects)

• Leverage to finance first equipment

• Finance BFR

FINANCE THE FUTURE not PURCHASE THE PAST

7

Current Situation of Early Stage + Venture Capital

• 1st Half 2011 vs 1st Half 2010 = - 69% of collected Funds : from 231M°€ to 72M°€ !

• Greater selection in projects by professional

investors

• Greater potential role for BAs

• New players :

- Web entrepreneurs (Isaï, Jaïna, Kima…)

- NTIC big groups (Orange, SFR…)

-Corporate Venture by Industrial groups

(Schneider, Alstom, Total, Veolia, Suez….)

8

Current Situation of Early Stage + Venture Capital

• As of today 5 Regions have created Co-Investment

Funds to finance Innovation and Development

• PACA Investment is among the first with 16M°€

• These funds rely on Private co-investors

• We have today in PACA a 3 « storey » system :

- Individual BAs up to 250/300K€

- SIBAs idem, additional to BAs

- PACA Investment from 150 to 750K€ as additional

co-investor

9

Conclusion

• BAs are committed to cooperate with new SATT :

- Select entrepreneurs

- Select and finance projects coming from

Academic and Public Research

• Opportunity to balance investment in NTIC with more

« industrial » projects