venture capital and the finance of innovation in the...
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2012/CTI2/CON/008
Venture Capital and the Finance of Innovation in the Global Context
Submitted by: Austral Capital
Conference on Innovation and Trade: Policy Considerations Related to
Generating and Absorbing InnovationSingapore
4-5 April 2012
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VENTURE CAPITAL AND THE
FINANCE OF INNOVATION IN THE GLOBAL CONTEXT
www.australcap.com
Singapore – April 4, 2012
Fi f I ti
Entrepreneurs
Austral Capital Model
Finance of Innovation
Importance of Ecosystem
Closing Remarks
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Closing Remarks
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EntrepreneursInnovation = f (Entrepreneurs)
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ENTREPRENEURS BARRIERS TO GROW
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SOURCE: Endeavor Global Impact Report 2011
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EXAMPLE:: ENDEAVOR
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Finance of Innovation
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FINANCE OF INNOVATION
20 – 100 MM
Venture Capital
Private Equity
0 ‐ 50 k
50 ‐ 500 k
500k – 20 MM
20 100 MMmore risk –
less risk
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Seed Capital
Angel Investment
Numbers in US$
Start up Early Stage GrowthMaturity
Start‐up Early Stage Growth Maturity
VENTURE CAPITAL IMPACT IN THE US ECONOMY
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SOURCE: Venture Impact: The Economic Importance of Venture Capital-Backed Companies to the U.S. Economy - 2011
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2.43%2.38%
1.38% 1.32%
1.28%1.26%
1.24%0.83% 0.16%
Software
Biotechnology
Industrial/Energy
VENTURE CAPITAL INVESTMENTS IN THE US ‐ 2011
23.62%
16.65%
8.15%
4.38%
4.14%
/ gy
Medical Devices and Equipment
IT Services
Media and Entertainment
Consumer Products and Services
Semiconductors
Electronics/Instrumentation
Telecommunications
Financial Services
Networking and Equipment
www.australcap.comFuente: MoneyTree Report by Thompson Reuters, PriceWaterhouseCoopers and National Venture Capital Association, 2011.
16.65%
12.37%9.87%
8.52%Networking and Equipment
Computers and Peripherals
Retailing/Distribution
Healthcare Services
Business Products and Services
Other
Austral Capital Model
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Performance Reach
• US$45 MM under management
• 12 Investments in Latam in last 4 years
• Chile• Brazil• Uruguay
AUSTRAL CAPITAL PARTNERS
Industry Investors Expertise
years
• 10 years of experience in high growth co.• Proven track record of investments
Uruguay• Argentina• US
offices
www.australcap.com
• High quality investors• Presence in Chile and California• MBA, MSc, engineering, entrepreneurship and business backgrounds in US and Latam.
Connecting entrepreneurs, technologies and business opportunitiesbetween Latin America and the US.
AUSTRAL CAPITAL MODEL
Company Austral Capital Management Partners
Biofuels company focused on applying synthetic biology to convert macroalgae sugars into fuel
Operations and development in Berkeley, California, Santiago and Puerto Montt, Chile
Leading IT services company originally based in Montevideo, Uruguay, focused on servicing and connecting CPGs with small‐size supermarkets in the region.
www.australcap.com
Nimbic is the leading provider of Maxwell‐accurate, 3D Full‐Wave EM Integrity solutions. Nimbic’s nWave 3D field solver enables signal integrity, power integrity and EMI analysis for chip‐package‐system design. Nimbic’s customers include Texas Instruments, Renesas, Toshiba, Qualcomm & Panasonic
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INFORMATION TECHNOLOGY
CONSUMER SERVICES LIFE SCIENCES ; CLEANTECH
Nimbic (Physware) Scanntech Andes Bioscience
SECTORS OF INTEREST
( y )
Scopix Solutions Multicaja Bio Architectural Lab
Paperless Producto Protegido Green Pacific Biologicals
Junar Atakama Labs Indef
NATURAL RESOURCES ENERGY FOOD
Forrestry; Mining Waste to Energy; Solar Seafood; Ovine
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Forrestry; Mining Waste to Energy; Solar Seafood; Ovine
Importance of Ecosystem
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IMPORTANCE OF ECOSYSTEM
Laws on PE/VC fund formation and operation Tax treatment of PE/VC funds and investments Protection of minority shareholder rights Restrictions on local institutional investors investing in PE/VC Restrictions on local institutional investors investing in PE/VC Protection of intellectual property rights Bankruptcy regulation (encompassing bankruptcy procedures/creditor rights/partner liability in cases of bankruptcy) Capital market development and feasibility of local exits Registration/reserve requirements on inward investments Corporate governance requirements Strength of the judicial system
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Perceived corruption Use of international accounting standards and quality of the local accounting industry Entrepreneurship
SOURCE: LAVCA Scorecard Report 2011 - The Private Equity and Venture Capital Environment in Latin America
IMPORTANCE OF ECOSYSTEM
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SOURCE: LAVCA Scorecard Report 2011 - The Private Equity and Venture Capital Environment in Latin America
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GOVERNMENT & AGENCIES ROLE
Regional Role (Latin America) Local Role (Chile)
FOMIN entered the industry in 1996: Investment in local VC funds TA projects Providing advice to investors new to LAC and to other industry players.
Chile’s Development Agency Financed more than 22 incubators Provided Seed Capital grants Invested in 28 local VC funds Disbursed $268 M as loans/equity to VC
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FOMIN invested in 46 VC funds, representing a $208.9M commitment. Disbursed $136.9M 36 funds are currently active, representing a $183.5M commitment.
funds over a total commitment of $362 M Start‐Up Chile Program for entrepreneurs
NEED OF VENTURE EDUCATION
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Closing Remarks
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connecting
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entrepreneurs
expertise
venture capitalists
connectingtechnologies
p
innovations
governments
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markets
investors
entrepreneurs
expertise
venture capitalists
connectingtechnologies
p
innovations
governmentsa global business
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markets
investors
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Think Big!Think Big!
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G l Mi d
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Gonzalo Miranda
Managing Partner