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MTB Italy Tour 2012

Aug 31, 2014

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  • MtB Italy Tour 2012 Introduction to EntrepreneurshipFrom Startups to Venture Financing ALBERTO ONETTI Chairman, Mind the Bridge Foundation MARCO MARINUCCI Executive Director, Mind the Bridge Foundation
  • AGENDAEntrepreneurship in Italy: key issues & opportunities The Startup world Business Planning The Venture Capital Market The Silicon Valley Mind the Bridge 2
  • AGENDAEntrepreneurship in Italy: key issues & opportunities The Startup world Business Planning The Venture Capital Market The Silicon Valley Mind the Bridge 3
  • The Problem we have (1) Italy has grown slowly during the past decade slower than Germany, France or the UK (0.27%/yr. since 2001) Its competitiveness its rising unit labor costs has slipped, as wages rose but productivity stagnated Source: Italy. Europes Investment Opportunity, White Paper by Vietor, Onetti & Napolitano, New York, 2011 5.0 Real GDP growth (Percent) 4.0 3.0 2.0 1.0 0.0 ITA 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 -1.0 EEA -2.0 -3.0 -4.0 -5.0 4 -6.0 Source: OECD Economic Outlook 88 database
  • The Problem we have (2) Unemployment is lower than the German/French experience BUT Participation rate (58%) is the second lowest in Europe Worst employment problem pertains to youth (28% unemployment for people between 15-24) Source: Italy. Europes Investment Opportunity, White Paper by Vietor, Onetti & Napolitano, New York, 2011 1.5 Average TFP growth (Percent) 1 0.5 1980-1995 1995-2005 0 ESP ITA GBR DEU EEA FRA US -0.5 -1 Source: EU KLEMS database 5
  • State of Entrepreneurship in Italy Lack of large companies In Italy SMEs are 98% of the total Mostly mature business Primarily Services (66% of GDP) Manufacturing is only 17% (it was 21% in 2000) Innovative industries play a minor role (2-6%) Strong family business vocation Food Textile Wood Metals Plastic&Rubber Automotive Industrial Machinery Chemical Electronics Pharma Biotech Software ITALY: INDUSTRY CONTRIBUTION TO GDP (2009) Source: CrESIT 2011
  • State of Venture Finance in Italy Annual VC Investments in Billion US $ US 28.425 Silico 11.63 2011 Europe 5.69 Italy 0.108 Lack of an established venture capital community Of the 3.66B invested yearly (avg. 2007-2011), approximately 90M went to early-stage investments, AIFI & PricewaterhouseCoopers 2007- 2011 356 startups were able to get funded in the last five years In 2011: 106 early stage deals despite the financial crisis (+34% compared to 2009) with 82M invested (-16% compared to 2009), AIFI & PricewaterhouseCoopers 2011 Small size of the stock market The stock market capitalization to GDP ratio is lower than 60%, versus 140% in the US and 170% in the UK (IMF & World Federation of Exchange) 7
  • Italian active VCs invested over ~ 450M in ~ 120 deals Active Venture Capital firms Not exhaustive selected Invested Capital - M examples# of Firms in Portfolio Venture capital created following 2008 Source: Booz & Company Analysis 8
  • State of Italian R&D Quality basic research 74k scientific publications in the period 1996-2010 ranking 8th in the global classification (SCImago Journal & Counrty Rank, 2010) Italy is in the top 10 countries (4th position) for number of publications (2001-2011) in comparison to R&D expenditure in 2011 (Italian International Growth agenda, Booz&Co analysis) Biotech: 660 clinical trials in progress during 2010, 15.7% of the overall number in Europe (Osservatorio Nazionale Sperimentazione Clinica 2011) Issues in turning research into business Lack of efficient technology transfer offices Universities do not offer incentives for lecturers to spin-off business initiatives Scarcity of skilled executives with strong entrepreneurial skills Italian scientists do not think business 9
  • Italy: Key Issues A few startups often lacking high-quality business plans (deal trickle) Legal barriers to entry and exit (Italy is not a corporate haven) Reduce labor market rigidities Obstacles in bridging research into business Lack of managerial skills High mortality (crisi del primo miglio) and Dwarfism Change the mindset Lack of seed funds Exit on the domestic market High Tech Leviathans are not here Small size of the stock market and lack of large corporations doesnt help Language barriers 10
  • AGENDAEntrepreneurship in Italy: key issues & opportunities The Startup world Business Planning The Venture Capital Market The Silicon Valley Mind the Bridge 11
  • Ingredients for a Start-up 12
  • What is an Entrepreneur 13
  • Average Entrepreneurs Profile AGE 41 year old 68.8% between 35-43 SEX 79.7% men 20.3% women STUDIES 64% University student MARITAL STATUS 60% marriedFAMILY BUSINESS 60.3%COMPANY ORIGIN 76% Creation 20% Inheritance 4% Purchase FINANCE Own/Family/VC EMPLOYMENT IN 5 5 YEARS 14
  • MtB Entrepreneurs Profile He/She is 32 87% is male, only 13% is female 49% has a scientific/technological background, while 51% has a business/humanistic education 25% holds a Ph.D. or MBA and the 20% got it abroad Only 10% does not hold a university degree 21% has prior entrepreneurial experience Source: CrESIT/Mind the Bridge 2011 15
  • What makes a successful entrepreneur?Education matters a lot 2.0 Startups are founded by highly educated peopleExperience matters as well Being a serial entrepreneur is a job The right startup is never the first one you foundWorking/Studying abroad does openyour mind It means more network, opportunities, ideas, experienceA successful startup is a team effort One-man bands do not go too far