Objectives and Opportunities of the InnovFin Programme (Oct. 2017) - PowerPoint PPT Presentation

Objectives and Opportunities of the InnovFin Programme (Oct. 2017)

InnovFin: A Quantum Leap InnovFin builds on the success of RSFF but is much larger and broader EU Contribution (EURbn) 3,2 1,2 RSFF InnovFin 2

InnovFin Product Overview 3

InnovFin SME Guarantee – innovation logic INNOVATIVE PROJECT INNOVATION INNOVATIVE COMPANY of all types R&I cost intensive: > 5-10% of operating Use financing for costs or >20% of loan innovative products, amount processes, services, business models registered a technology right and wish to exploit it of high technological or industrial failure investing in new products / new geographical market For at least 80% of the innovative endeavor fast growing enterprises …..can happen in All SECTORS, enterprises of All SIZES… a VC fund or Business Angel investee companies ….. INCREMENTAL and recipients of R&I support DISRUPTIVE schemes: grants, loans, INNOVATION guarantees, tax credits, prizes 4

InnovFin Equity – innovation logic Inve vestmen ent focus cus of Techn hnology logy/kn knowle ledge dge finan nanci cial l inter termedia mediarie ries INNOVATION inten ensive H2020 020 sectors rs EARL RLY Y STAGE & socie ietal tal chall llen enge ges • Proof of concept • Technology transfer ICT/KE /KET • Pre seed Nanotech chnolo logie ies • Seed • startup Bio te tech ch FOCUS S ON THE FUND Clean an Tech ch STRATEG EGY Y ALL L FORM RMS: pre-corporate Med Tech ch and corporate Startups, spin-offs, spin- Resource ce effic icie iency In a VC portfolio all companies outs, joint ventures, projects, must be innov novativ ive e with th high gh technology rights, Food d securit ity / bio- growth th potent tential ial economy my Health lth and d demogr grap aphic ic Mostly tly Disrupt ruptiv ive e and nd new to to All l TYPES: the world rld innov novatio tions Clim imat ate chan ange ge COMMERICAL AS WELL AS SOCIAL ENTERPISES 5

InnovFin Product Overview 6

InnovFin Equity Basic features Stage coverage Focus on Pre-seed, Horizon seed, start 2020 Early Stage up phases objectives focus (seed & A (e.g. ICT, life rounds sciences, included) clean energy) Pari-passu , Up to Investment at least 30% 25/50% of size investment total up to EUR from private commitmen 50m investors ts x2 of EU + investment Horizon Call for 2020 ticket in Expression Associated of Interest eligible Countries investees PRE-SEED PHASE S TAR T-UP EMER GING PR E-S EED PHAS E START-UP EMERGING S EED PHAS E SEED PHASE DEVELOPMENT PROOF OF DEVELOPMENT PHAS E GR OWTH PHASE GROWTH PR OOF OF CONCEPT S ME Development S tages 7

InnovFin Technology Transfer Pre-seed and seed funds, including Promotion of IP, Open to Proof of affiliated with TTOs, licensing, spin offs, Concept pockets ROs, HEIs spin-outs Investment size up Investment size up to 50% of total to EUR 50 million commitments At least 50% of fund SMEs, JVs, projects TRL 3-8 size focused on TT 8

InnovFin Business Angels Open for Business Angel Investment size experienced managed funds business angels typically up to 50% and wishing to team up of total co-investment and set up their first commitments funds BA funds May invest >50% BA Funds are fund size if the co- expected to take investment ratio is investment not higher than decisions, rather 50% on deal by than passively co- deal basis invest Emphasis on seed Focus on ICT and Investment size up and start up stage, other H2020 sectors may include social to EUR 50 million enterprises 9

InnovFin Venture Capital Investment size Early stage focused Available also for typically up to 25%, Venture capital first-time or but not higher than funds and co- emerging 50% of total investment funds investment teams commitments Open to multi- stage strategies Focus on one or (combining other more H2020 sectors EIF’s managed resources) Seed stage and First closing series A rounds, Investment size up preferred, other to EUR 50 million series B on case by closings if catalytic case basis 10

InnovFin Fund-of-Funds Investment size up FoF targets at least to EUR 50 million 4 countries (EU Commitments to and/or H2020 venture fund-of- (typically up to 25% Associated funds of total FoF’s Countries) commitments) Investee FMs established or Investee funds operating in EU or should focus on H2020 Associated H2020 sectors Countries At least 50% Open to multi- aggregate Effective & stage strategies transparent FoF investee funds with significant governance (>30%) early stage investable amounts allocation to be placed in EU 11

EIF’s assessment Investment readiness Eligibility fit Team and Track Record (WHO) Adequate skill-set  Catalytic Track-record  role Cohesion /stability/succession Stage of  investments Policy Carry split  Fit Team commitment  Value Governance structure: independence/  Countries creation covered conflict of interests Market Reputation (referencing) developme  Market Opportunity (WHY) nt Sectors covered Deal flow/pipeline EU Value  Added Competition  Investment Strategy (HOW) Focus, deal flow and pipeline  Value creation / Unique Selling Point  Coherence with the market opportunity,  the team and the fund parameters Fund Parameters (WHAT) Eligibility Fund model: fund size / diversification /  reserve policy / investment pace Terms and Conditions  Management company budget  Legal structure / compliance  12

InnovFin Product Overview 13

InnovFin SME Guarantee This guarantee instrument covers the risk related to losses of a portfolio 14

SME Guarantee - Key Guarantee Terms Direct Guarantees Counter - Guarantees EU 28 & Amount: SMEs H2020 Maturity: up up to EUR Small Mid- Associated to 10 years 7.5m (EUR or caps Countries LCY) Tangible & Working Intangible Capital Loans, Assets Innovative credit lines, bonds, Business leases Transfers Transactions Final Beneficiaries Purpose (senior debt only) 15

SME Guarantee - Guarantee Fee Guarantee Fee Financial Intermediary Guarantee Fee: Guarantee Fee: Financial Guarantee SME Small Mid-Cap Intermediary from EIF 50% Guarantee 0.50% p.a. 0.80% p.a. Innovative SMEs / Small Mid-caps  Financial Intermediaries are required to transfer the Financial Benefit to SMEs & Small Mid-caps 16

SME Guarantee - Transfer of Benefit (Indicative example) Without InnovFin With InnovFin Financing at 4% Financing at 3.5% Total = 4% Total = 3% Indicative pricing model components Reduction of Cost of the Cost of Risk guarantee : 1.5% Cost of Risk with InnovFin 0.5% (or 0.8% 0.5% for small midcap) 1.5% 1.5% Margin 0.5% 0.5% Fixed Costs 0.5% 0.5% Funding Costs 50% of financing 50% of financing 17

InnovFin Product Overview 18

How does InnovFin Emerging Innovators work? EIF R&I Activities, R&I Direct Financing Infra, EUREKA, ERA > EUR 7.5m or financing Innovative midcaps Loans / Guarantees Innovative New Financial midcaps Intermediary Loans < 3,000 employees Direct and Indirect financing in Moderate and Modest Innovators (according to EU Innovation Scoreboard) & Associated Countries. Eligible innovative project or an Innovative Midcap required. EIB finances up to 50% of eligible investments in innovation. Comprehensive due diligence including project due diligence (technical, financial, economic). EIB standard documentation. 19

InnovFin Emerging Innovators – Geographical eligibility Iceland Are covered: EU Moderate and Modest Innovators Emerging Innovators’ product coverage Faroe Islands Finland per EU Scoreboard Other geographies covered by InnovFin Norway Sweden Estonia And Horizon 2020 Denmark Latvia Ireland Associated Countries Lithuania United Kingdom Netherlands Poland m Belgiu Germany Also covered: Overseas Ukraine Luxembourg Czech Rep. Slovakia Countries and Territories France Austria Switzerland Hungary Hungary Moldova Slovenia belonging to EU Member Romania Croatia Italy Georgia Bosniia & Herzegovina Monaco Serbia Portugal States but that are not Armen. Bulgaria Spain Montenegro Macedonia part of the EU Albania Turkey Greece Israel Tunisia Malta Cyprus 20

How does the MidCap Guarantee work? Innovative Financial EIF 50% New Midcaps Intermediary Guarantee Loans 3,000 employees EUR 25m  50% loss coverage for new midcap loans of up to EUR 50m not covered under InnovFin SME Guarantee  Pari-passu sharing of risk and pricing  Full delegation to financial intermediaries  Favourable capital treatment expected 21