Reporting on technology innovation in Central Europe
Gate2Start is a name of another Framework Programme project focused on the ICT sector and technology transfer. It is a part of the broader Europe Innova initiative addressing the exploitation of research-based innovation and bringing entrepreneurship and market expertise at the start of applied research.
Several coaching and networking events were run in several countries over last two years and there have been also developed some outputs the CITT and NowEurope community can benefit from.
This morning I browsed through Wired Magazine’s interview with “Ted,” the pseudonymous figure behind TheFunded.com. The site offers entrepreneurs unprecedented insight into the workings of the VC community, namely by offering entrepreneurs themselves the chance to swap their VC horror stories without revealing their identify. “Ted,” however, agreed to step out from behind the veil. He is Adeo Ressi, the founder of two successful startup companies.
Naturally we had to have a peek.
Continue reading ‘VCs don’t like TheFunded but entrepreneurs do’
According to Big Four accounting firm, Deloitte, European VCs are increasingly interested in investing in Central and Eastern European. While Western Europe remains the primary focus, 21% of European investors surveyed expressed an interest in Central European deals, while 14% were keen on investing in Eastern Europe.
Deloiitte’s Global Trends in Venture Capital 2006 survey queried 505 investors around the world on their attitudes and interests regarding specific geographic areas and industry sectors.
The top reasons European VCs favored Central Europe were ‘access to foreign markets’, ‘lower cost locations’ and ‘emergence of entrepreneur environment in non-traditional locations’.
A key roadblock for innovative new businesses in Hungary is the relative lack of capital for early stage startup companies. One way this gap is filled in other countries is the ‘business angel’ - a wealthy individual who brings not only his cash, but often his expertise, contacts and elbow grease.
Here in Hungary I know a handful of business angels, and I’ve met similar people in the Czech Republic. They seem to be few and far between - at least in comparison to places like the United States and Britain. Yesterday I came across this study which, for the first time, offers a formal snapshot of the angel phenomenon in Hungary.
So how many are there? The answer depends on how you define a business angel.
The Invest in France Agency (AFII) has recently published a report in Franceon Foreign Direct Investments (FDI) which reveals that foreign investors have much more confidence in France?s economic potential than French actors have themselves!
With FDI amounting to 40 billion euros in 2005, France ranks as the fourth most attractive country for foreign investments, behind Great Britain - which enjoyed an exceptional score thanks to an important merger in the energy sector (Shell) - China and the United States. Since 2002, France has positioned itself around the third rank after the United States and China. According to the AFII, completed inward investment projects in France have increased by 12.4 % over 2004 with a record 664 projects creating or safeguarding 33,296 jobs.
Continue reading ‘France remains one of the most attractive countries for foreign investments’
Scope for venture capital in financing SMEs has been, since the late nineties, subject of many discussions and debates. With regard to the flourishing literature and political support towards venture capital, this has appeared as a way to substantially improve SMEs’ access to finance. However, recent assessments have enlightened its decline.
Investment made possible through venture capital (VC) is commonly recognised as an important path to economic growth and innovation. The report Employment Contribution of Private equity and Venture Capital published by the European Private Equity and Venture Capital Association (http://www.evca.com/html/home.asp) identifies a growing role of VC in Europe, with a 40% increase in the number of companies supported since 1995. The positive impact in terms of employment is also generally agreed so as its contribution to R&D. But the same report also underlines difficulties faced by this sector since the burst of the Internet bubble in 2000-2001. For instance, amount of VC invested in 2000 was nearly 20 billion euros, compared to 10.3 billion euros invested in 2004. One of the major consequences of this decrease is a seed capital based investment decline in start-up companies. Thus, the number of companies in which VC was invested declined from 9,187 in 2000 to 5,557 in 2004.
Continue reading ‘SME access to finance in the EU-15: is venture capital so crucial?’
Scope for venture capital in financing SMEs has been, since the late nineties, subject of many discussions and debates. With regard to the flourishing literature and political support towards venture capital, this has appeared as a way to substantially improve SMEs’ access to finance. However, recent assessments have enlightened its decline.
Investment made possible through venture capital (VC) is commonly recognised as an important path to economic growth and innovation. The report Employment Contribution of Private equity and Venture Capital published by the European Private Equity and Venture Capital Association (EVCA) identifies a growing role of VC in Europe, with a 40% increase in the number of companies supported since 1995. The positive impact in terms of employment is also generally agreed so as its contribution to R&D. But the same report also underlines difficulties faced by this sector since the burst of the Internet bubble in 2000-2001. For instance, amount of VC invested in 2000 was nearly 20 billion euros, compared to 10.3 billion euros invested in 2004. One of the major consequences of this decrease is a seed capital based investment decline in start-up companies. Thus, the number of companies in which VC was invested declined from 9,187 in 2000 to 5,557 in 2004.
Continue reading ‘SME access to finance in the EU-15: is venture capital so crucial?’
It was in 1994 when Jeff Bezoz and his few employees created a web site and database in Bezos’ Bellevue, Washington garage. It was few months later when he approached local venture capital (VC) firms in search for valuable growth capital. None of the venture capitalists invested – they evaluated the idea good, but company not attractive enough for investment. Today, with about 45% stake in Amazon.com Bezoz’s share is worth at least an easy $2 billion, while initial investment he received from business angels totaled marginal $1.2 million.
Ironically, a year later angel and venture capital investments soared and investments were made into virtually everything that went on Internet. Total venture capital investments in the USA increased nearly 15 fold in six years, from a mere $6.3 billion in 1995, to an unworldly $90 billion in 2000. However, the feast did not last long. Everything came back to earth again in 2001, when dot com bubble eventually burst, and when forty-nine out of the Silicon Valley’s fastest 50 lost value, with the majority experiencing market capitalization declines of 80%.
Continue reading ‘National seed capital fund to be rolled out in Estonia in 2006?’
The 12th edition of the European Tech Investment Forum and the accompanying Venture Academy were organised by Europe Unlimited in the Hague in mid November. Meanwhile the European Commission published a report summarizing findings and recommendations from 430 European ICT companies seeking venture capital funding in the past 5 years.
The data presented is based on a number surveys that were performed immediately after each of the 10 events. The impact report includes the complete list of 430 companies from 29 countries and recommendations from investors, consultants and successful entrepreneurs.
It can be downloaded from our Virtual Innovation Park. Disclosure: Our company VIP park was involved in organizing five editions (2002-2004) and in coordinating the project activities in the Eastern and Central Europe.
The other day I was having lunch with my wife, an investment manager from one of few VC funds operating here in Slovakia. I brought her Steve’s article and asked for her comments.
Here are some points showing tech investment in Slovakia last year:
• All companies that received investment are considered rather high-tech and all investment occurred during the expansion phase of development. Interest in start-ups and seed capital is still limited (see Steve’s conclusion). Continue reading ‘Venture Capital is active’
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