Entrepreneurship & Venture Capital Entrepreneurship & Venture Capital for a Global Tech for a Global Tech - - based Economy based Economy Ordem dos Engenheiros | 25 November 2015 José Epifânio da Franca
Entrepreneurship & Venture Capital Entrepreneurship & Venture Capital for a Global Techfor a Global Tech--based Economybased Economy
Ordem dos Engenheiros | 25 November 2015
José Epifânio da Franca
1. To change the economic paradigm;
2. To drive economic competitiveness, globally;
3. To create well paid employment opportunities for relevant, highly qualified talent;
4. To combat the outbound flow of knowledge and talent.
It is a decisive imperative for PortugalIt is a decisive imperative for Portugal
Tech-based start-ups & Venture Capital investment
2Connect your Future | 05 November 2015
Why?
What?
How?
3Ordem dos Engenheiros | 25 November 2015
More than Money!
Why?
What?
How?
4Ordem dos Engenheiros | 25 November 2015
More than Money!
Why?
1% = 702 M€
2014
5
The Economy today
Ordem dos Engenheiros | 25 November 2015
Pace of exports is reaching normality
6Ordem dos Engenheiros | 25 November 2015
What we have is not enough
7
3% annual Exports growth in 10 years = 34%
1.5% annual GDP growth in 10 years = 16%
In 10 years, net additional contribution of exports to GDP would be less than 10%
Ordem dos Engenheiros | 25 November 2015
More is needed!
� Circa 2025:
• 100 new companies (start-ups at birth…), all global by design!
• 40,000 minds & souls behind them… fighting and winning in the world!
• Accelerated corporate development: 0 -> 40 M€ in 10 years!
• 4 billion euros of aggregated business volume (about 6% of present total exports; about 10% of present exports of goods)!
Investing for a knowledge economy
8Ordem dos Engenheiros | 25 November 2015
1% = 702 M€
2025
By 2025: economic transformation kicks-in
9Ordem dos Engenheiros | 25 November 2015
1% = 702 M€
2035
By 2035: a modern economy is established
10Ordem dos Engenheiros | 25 November 2015
Why?
What?
How?
11Ordem dos Engenheiros | 25 November 2015
More than Money!
• Technology (and scientific too…) foundations!
• Economically relevant, highly qualified talent!
• International recognition!
• Open to the World!
• Global operational and organizational networks!
• Strong partnerships of all regional and national stakeholders!
• Well defined, long-term goals (10+ years)!
• No change of course, whatever the powers of the day!
12
• Global economic relevance!
10 Key Attributes to make it happen
Ordem dos Engenheiros | 25 November 2015
•• Personal entrepreneurship Personal entrepreneurship
is critical!is critical!
•• Cultural revolution is Cultural revolution is
needed!needed!
•• World references are a World references are a
must!must!
13Ordem dos Engenheiros | 25 November 2015
10 Key Personal ingredients
Why?
What?
How?
14Ordem dos Engenheiros | 25 November 2015
More than Money!
10-100+ M€
And still more capital
Risk Value
0.5-1 M€ Capital
2-5 M€
More Capital
Capital, Risk, Value
1-2 years 2-5 years 5+ years Time
The 3 critical profiles of a technology-based start-up
Commercial-graded credit risk
Hands-off for commercial
debt
OK for commercial
debt
15Ordem dos Engenheiros | 25 November 2015
• Investing in a promise
• All is new: technology, industries, markets
• High-level of uncertainty
• Information gaps
• Market conditions
• Nature of assets
• Investment knowledge still very limited
• Not appropriate for banks or public markets to fund
The Equity Gap of tech-based start-ups
How to fund tech-based start-ups?
16Ordem dos Engenheiros | 25 November 2015
Number of companies Capital Needed
Early-stageEarly-stage 20 per year
2.5 M€ per company
50 M€/year500 M€ in10 years
(50% public)
SeedSeed 40 per year
0.5 M€ per company
20 M€/year200 M€ in10 years
(100% public)
In 10 years: 1.700 M€ Public?: 650 M€ National private?: 750 M€ International private?: 300 M€
It is the top that matters
17
Scale-upScale-up 10 per year
10 M€ per company
100 M€/year1.000 M€ in 10 years(20% public)
Ordem dos Engenheiros | 25 November 2015
2015 was a good year
18Ordem dos Engenheiros | 25 November 2015
Feedzai, raised about $17 million
Talkdesk, raised about $22 million
Uniplaces, raised about $24 million
This must be the norm, rather than the exception!
Veniam, Unbable, …
Why?
What?
How?
19Ordem dos Engenheiros | 25 November 2015
More than Money!
Economic
Success for Globalization
UniversityStudents, PhDsand post-docs
Serial Entrepreneurs
Veterans ofGlobal Companies
Culture ofInnovation &
Entrepreneurship
World-classAcademic
Institutions
CorporateSpin-offs
CorporateR&D
TechnologyIncubators
GlobalVC Community
GovernmentSupport
It is more than just MONEY!
20Ordem dos Engenheiros | 25 November 2015
More and better Deal Flow is needed
• Deal flow with quality and volume is essential to build-up a strong, sustainable ecosystem;
• Start-up projects spun-off from existing companies is very limited;
• The Scientific and Technology ecosystem remains the most important source of start-up projects. However…
o PhD participation is still very limited, albeit the increased number of PhDs being produced
o Young Professors are mostly absent from the start-up movement
o No incentives specifically designed to promote participation in the entrepreneurial ecosystem
21Ordem dos Engenheiros | 25 November 2015
A Decisive Imperativethat can not be missed!
A Decisive Imperativethat can not be missed!
Entrepreneurship for Entrepreneurship for
a Global Techa Global Tech--based based
EconomyEconomy