An overview of the vc market and v kstfonden
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An overview of the VC market and Vækstfonden. 12 March 2010 Uffe Arlø Theilade, Investment Director, Vækstfonden. Agenda. The idea and rationale for VC An introduction to Vækstfonden VC in Denmark Market developments and challenges. Why do we need venture capital?.

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An overview of the vc market and v kstfonden

An overview of the VC market and Vækstfonden

12 March 2010

Uffe Arlø Theilade, Investment Director, Vækstfonden


Agenda

Agenda

  • The idea and rationale for VC

  • An introduction to Vækstfonden

  • VC in Denmark

  • Market developments and challenges


An overview of the vc market and v kstfonden

Why do we need venture capital?


An overview of the vc market and v kstfonden

Types of finance (risk profiles)

Traditional companies

Technology companies

Debt

Quasi-equity

Equity

Debt

Equity


An overview of the vc market and v kstfonden

VC Funded Companies in Denmark

  • 20% growth in employment

  • 40% export growth

  • 50% growth in R&D

  • R&D expected to account for 1.5% of GDP in 2010


An overview of the vc market and v kstfonden

VC-backed companies in the US

  • $ 1,800 billion revenue

  • 16% of GDP

  • 10 mil jobs

  • 40% of all IPOs

  • 3 x R&D activity

  • 3 x tax payment

  • 2 x export


An overview of the vc market and v kstfonden

Venture boosts the economy


An overview of the vc market and v kstfonden

What is Vækstfonden?


Who we are

Who We Are

  • Vækstfonden is a government backed investment fund

  • Investment focus on Danish early stage companies - both through direct investments and fund-of-funds

  • Total asset base around EUR 350 million

  • 85 % committed to early stage companies and venture capital funds

  • Largest Danish investor within the ICT and life science spaces


Funding activity

Funding Activity

  • Annual investments of DKK 500 million in 25-30 companies – direct as well as through VC funds

  • Loan guarantees on the rise

  • Co-funded more than 3,500 companies to the tune of DKK 6.5 billion


Targeted financing

Targeted Financing

Funding Need

Million Euro

Fund of Funds

Growth Capital

Business Angel Matching

Loan Guarantees

Global Growth

Companies

15

International

Growth Companies

5

Regional Growth

Companies

1

Local Growth

Companies

Potential Revenue

Million Euro

5

15

70+


An overview of the vc market and v kstfonden

Vækstfonden’s leverage effect

Vækstvirksomheder - 50 mia. kr.

10 mia. kr.

40 mia. kr.

Private

ventureselskaber

Andre private finansieringskilder

6 mia. kr.

4 mia. kr.

Private investorer

Vækstfonden


An overview of the vc market and v kstfonden

VC in Denmark


Main attractors in the danish market

Main Attractors in the Danish Market

  • Strong Research Base

  • Entrepreneurial Culture

  • Flexible Labour Market

  • Dynamic Technology Clusters


An overview of the vc market and v kstfonden

0,25%

0,20%

0,15%

0,10%

0,05%

0,00%

DK

S

FIN

UK

IRL

NL

NO

CH

E

B

F

P

D

A

I

EL

Nationale investorer

Udenlandske investorer

VC-backed companies’ attraction of foreign capital (relative to GDP; 2007)


Key venture capital players

Key Venture Capital Players


An overview of the vc market and v kstfonden

Geographic Distribution of VC Investment

  • Large concentration around Greater Copenhagen

  • Generally centered around universities and research institutes


Top 3 industries in denmark

Top 3 Industries in Denmark

% of Total Amount Invested


An overview of the vc market and v kstfonden

Market developments and challenges


An overview of the vc market and v kstfonden

Challenge: Lack of funds, low new/early stage investment activity


Annual capital raisings by vc funds

Annual Capital Raisings By VC Funds

€ Million

Total Capital Under Management

DK: € 2,983 Million


An overview of the vc market and v kstfonden

Total VC Investment activity in Denmark


Due to follow on investments

..Due to Follow-On Investments

New Investments Under Pressure


An overview of the vc market and v kstfonden

Seed Investment at All Time Low


An overview of the vc market and v kstfonden

Challenge: Weak exit options, returns under pressure


The global financial crisis puts exit markets in reverse

The Global Financial Crisis Puts Exit Markets in Reverse

Source: VentureXpert

13. november 2014

26


Ipo valuations particularly hard hit

IPO Valuations Particularly Hard Hit

Source: VentureXpert

13. november 2014

27


Entry valuations falling

Entry Valuations Falling

Source: VentureXpert

13. november 2014

28


Holding periods rising steadily

Holding Periods Rising Steadily

Source: VentureXpert and Vækstfonden

13. november 2014

29


Key points

Key Points

  • Raising money for new ventures increasingly difficult

  • New venture capital funds need to be raised

  • Danish VCs under pressure to deliver attractive exits

  • Exit timing is crucial

30


Learn more at www vf dk

Learn More At www.vf.dk


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