SME finance workshop: step one in commercialising research
The first small to medium-sized enterprise (SME) financing workshop, focused on bringing successful research results into the market, was held in Brussels on 10 March. The event not only offered practical advice to SMEs but also gave them the opportunity to meet representatives from the European Commission, venture capital firms, the European Enterprise Network and other SME-focused organisations. The day emphasised the Commission’s commitment to devising policies that create a more effective environment to foster the commercialisation of SME research.
Patric Gresko, European Investment Fund (EIF)
EIF is Europe’s leading developer of risk financing for entrepreneurship and innovation. It is owned by the European Investment Bank (EIB) (62%) and the European Community through the European Commission (29%).
The EIF has a EUR 1 billion mandate to provide hybrid debt or equity finance to European SMEs. It focuses its efforts on SMEs and aims to become the 'cornerstone' investor that supports SMEs from the early stages of a project right through to mid-market level.
Web Site: http://www.eif.org
Bart Diels, European Venture Capital Association (EVCA)
Mr Diels made it clear that although the global financial crisis had deterred some venture capitals from investing in high-risk projects, 90% of the EVCA’s venture capital goes directly to SMEs. He explains: 'We look for seeds that will grow into Sequoia (world’s largest trees), not Bonsais. Bonsais are relatively expensive, need a lot of care and attention, but do not amount to much.'
Mr Diels noted that access to venture capital can be quick – three to four months on average, and he offered some practical advice on creating proposals and business plans:
- 20 pages of PowerPoint is better than 60 pages of text;
- do not worry about technical or financial details – just stick to the headline information;
- do not put a valuation down on paper – only mention this if asked;
- provide multiple exit strategies for the investor;
- be transparent;
- provide a team profile and basic company information;
- do not give up; it can take two or three tries before being accepted.
Web Site: http://www.gimv.com
Claire Munck, EBAN - Business Angels
EBAN provides another 'door to knock on' for SME financing. Within the association is the aptly named Business Angels organisation, which operates more than 100 offices in 27 countries.
Business Angels introduce SMEs to private investors who have a vested interest in the sector most relevant to the SME’s research project. Should they be interested, the private individual can offer not only investment but also experience and advice, often acting as a mentor to the project to assist its development. Such investments usually range up to EUR 1 million per year and are generally committed during the early stages of a project.
Claire passed on practical advice for approaching a 'Business Angel', suggesting SMEs focus on the commitment and ambition of the entrepreneurs and management team as much as on the project itself.
Web Site: http://www.eban.org
Beatriz Yordi, Competition and Innovation Programme (CIP)
The CIP has a major focus on eco-friendly research and its Eco-Innovation programme has one of the highest approval rates of all SME financing options, at 25%. The programme will launch its latest call for proposals on 13 April 2010, closing in September 2010.
Ms Yordi offered her advice for delivering a successful proposal:
- keep it short and simple, and cut out the jargon;
- do not refer to EU policies to justify your project – the CIP already know;
- provide information on the market demand;
- discuss the European added value your research will bring;
- mention some long-term benefits;
- include a business plan.
Web Site: http://ec.europa.eu/ecoinnovation