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EU financial instruments EIF InnovFin instruments for debt and private equity

Discover the InnovFin Equity Instruments provided by the European Investment Fund (EIF) to support SMEs in their development and growth stages. These instruments include venture capital, technology transfer, business angels, and fund of funds. Explore the benefits and eligibility criteria for each instrument.

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EU financial instruments EIF InnovFin instruments for debt and private equity

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  1. EU financial instruments EIF InnovFin instruments for debt and private equity 16th October 2018, Sofia (BG) Francesco Ferlaino

  2. InnovFin SME Support • Horizon 2020 and Financial Instruments • EIF Support • EIF Equity instruments • InnovFin Equity • Future of Financial instruments

  3. Horizon 2020 and Financial Instruments

  4. Horizon 2020 support SMEs -Development -Prototypes -Demonstration Fundamental research Applied research -Commercialization InnovFin Initiative Excellent Science – ERC, Marie Curie, FET, Infrastructures Societal Challenges – Health, Food, Energy, Transport, Climate, Societies and Security Industrial Leadership- ICT, Space, Biotechnology, Nanotechnology, SMEs, Access to Risk Finance

  5. InnovFin Implementation Equity Debt • InnovFin SME Guarantee • InnovFin Venture Capital • InnovFinTechnologyTransfer • InnovFin Business Angels • InnovFinFundofFunds • InnovFinLargeProjects • InnovFinMidCapGrowthFinance • InnovFinMidCapGuarantee • InnovFinScience • InnovFin EDP • InnovFin IDFF, etc Financial intermediaries (Banks, Guarantee Ass., etc) Financial intermediaries (VCs, BAs, FoF, etc ) Final recipients Final recipients Final recipients

  6. EIF Support

  7. EIF – European Investment Fund • Shareholders59.9% EIB • 28.1% EU/EC • 12.0% by public and private financial institutions (FIs) • Over €5bn Equity Investments in European Venture Capital funds • More than 170+ VC fund manager relationships • 20 years on European VC market

  8. EIF debt instruments • SME initiative • EASI -European Commission’s Programme for Employment and Social Innovation • Securization • etc

  9. InnovFin SME Guarantee • InnovativeSMEsaccording to InnovFin SMEG: • Invest in producing, developing or implementing new or substantially improved products, processes or services including business models that are innovative • “Fast-growing enterprise” - growth in employees or in turnover greater than 20% • R&I costs represent at least 5% of its total operating costs • The Beneficiary shall have a significant innovation potential or be an “R&I-intensive enterprise”

  10. InnovFin SMEG Financial Benefit With this facility SMEs have up to 50% of the guarantee covered by EIF, making the loan more attractive to the market.

  11. EIF EquityInstruments

  12. EIF support throught SME Development stages Public Stock Markets Portfolio Guarantees & Credit Enhancement VC Funds, Lower Mid-Market & Mezzanine Funds Microcredit VC Seed & Early Stage Social Impact Funds Business Angels,Technology Transfer PRE-SEED PHASE SEED PHASE START-UP PHASE EMERGING GROWTH DEVELOPMENT SME Development Stages HIGHER RISK LOWER RISK

  13. EIF Equity Instruments Single EU Equity Financial Instrument EIF is a one stop shop and all instruments are open on a First Come First served basis • EFSI– Junker Plan - EFSI Equity instrument • Can support InnovFin initiatives

  14. EFSI Equity • http://www.eif.org/what_we_do/equity/efsi/index.htm • Focus on expansion and growth stage • Deployment with InnovFin in multi-stage investments • New tools for impact investing • Investments in/alongside intermediaries linked to incubators/accelerators targeting social enterprises • Investments in business angels funds or co-investments alongside business angels targeting social enterprises • Payment by Results investment schemes targeting social sector organizations at large

  15. InnovFinEquity

  16. InnovFin Equity InnovFin Venture Capital InnovFin Technology Transfer InnovFin Business Angels InnovFin Fund of Funds • Pre-seed, seed, start up phases (seed & A rounds included) • Focus on Horizon 2020 objectives (e.g. ICT, life sciences, clean energy) • Investment size up to EUR 50m • Pari-passu, at least 30% investment from private investors • Up to 25/50% of total commitments

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

  18. InnovFin Technology transfer • Promotion of IP, licensing, spin offs, spin-outs • Pre-seed and seed funds, including affiliated with TTOs, ROs, HEIs • Open to Proof of Concept pockets • Investment size up to 50% of total commitments • TRL 3-8 • At least 30% of fund from private investors • Investment size up to EUR 50 million

  19. InnovFin Business Angels • Promotion of IP, licensing, spin offs, spin-outs • Pre-seed and seed funds, including affiliated with TTOs, ROs, HEIs • Open to Proof of Concept pockets • Investment size up to 50% of total commitments • TRL 3-8 • At least 30% of fund from private investors • Investment size up to EUR 50 million

  20. InnovFin Fund of Funds (FoF) and VentureEU Pan-European VC FoF InnovFin Fund of Funds • InnovFinFoF targets at least 4 countries (EU and/or H2020 Associated Countries) • Investment size up to EUR 50 million • (typically up to 25% of total FoF’s commitments) • Focus on H2020 sectors • At least 50% aggregate investee funds investable amounts to be placed in EU Pan-European VC Fund(s)-of-Funds Programme (2.100M€) • EIF can commit up to 25% of the aggregate commitment to any single FoF, but ≤ € 300M€ • Companies: ≥50% in EU and ≥ 30% early stage • One or more privately-managed pan-EU VC Fund(s)-of-Funds each with target fund size ≥€500m • With broad geographical scope • Mobilising majority of commitments from independent private investors IFE contribution / early stage/ €200 m EFSI contribution /later stage/ €100 m EFG contribution /later stage/ €100 m

  21. EIF’s investment process • UnderstandConcept - Based on preliminary questionnaire / pitch book • Investment readiness - Physical meeting (typically in Luxembourg); chance to articulate investment opportunity and understand EIF • Stress testing and verification - EIF team conducts on site visits (min. 2 days). May, or may not lead to term sheet • Legal documentation - After EIF BoD approval, legal negotiation; EIF review; Importance of legal counsel.

  22. InnovFin Equity – Key points to analyse Important Documents -Annex II and Annex III to the Open Call for Expression of Interest to select Financial Intermediaries under the Single EU Equity Financial Instrument

  23. Future of Financial instrumentsand Framework Programmes

  24. Future of Financial instruments for R&I • BlendedFinance • Systematic blending of grants and financial instruments using innovative business models - not only on best efforts basis. • Covering debt and equity funding needs for riskier SMEs (e.g. deep tech) with non-dilutive grant for high risk projects. • Involving all range of financial intermediaries (existing EIF intermediaries + new intermediary models such as • business angels, • family offices, • funds and other alternative investors

  25. Future of Financial instruments for R&I Horizon Europe – EIC Invest EU

  26. Useful links • www.eif.org • www.access2finance.eu • http://www.access4smes.eu/ • http://investhorizon.eu/ • www.eib.org • https://ec.europa.eu/programmes/horizon2020/en/h2020-section/access-risk-finance

  27. Where we are on ARF - 4 Promotional Guide on InnovFin products

  28. Promotional Guide to accessfinancialinstruments and tips to approachinvestors Access4SMES Training on InnovFinEquity 16 October 2018, Sofia Francesco Ferlaino

  29. A4SMEs Objectives • Improve NCP capacities • Identify and share key success factors for SMEs’ participation in H2020 • Assess the impact of the SME Instrument on beneficiaries • Spread knowledge and information on financial instruments • Enhance the outreach of the SME&ARF NCP Network and maximise the impact

  30. A4SMEs Promotional Guide to access financial instruments This Promotional Guide is the result of a joint exercise carried out by Horizon 2020 National Contact Points for access to risk finance and SMEs in cooperation with financial intermediaries accredited by the European Investment Bank and European Investment Fund (EIB-EIF) Based on: Mapping analysis of financial instruments (success stories and barriers to commercialization)

  31. Purpose and objectives of the Guide • This Promotional Guide is the result of a joint exercise carried out by Horizon 2020 National Contact Points for access to risk finance and SMEs in cooperation with financial intermediaries accredited by the European Investment Bank and European Investment Fund (EIB-EIF). • The main target of the guide are primarily Innovative SMEs, Horizon 2020 applicants and other R&I organizations interested in applying for InnovFin products and getting tips to approach financial intermediaries and investors.

  32. Contributors • APRE (ita) WP leader • BPIFRANCE (fra) • FCT (por) • CDTI (spa) • APRE (ita) WP leader • BPIFRANCE (fra) • FCT (por) • CDTI (spa)

  33. Methodology • Dedicated survey exercise, carried out in collaboration with financial intermediaries within the Access4SMEs project • Identification of strenghts and weaknesses • Detenction of the necessary actions in order to maximize the impact and the collaboration between access to finance communities for a more effective utilization of financial instruments and better access to related investor’s support facilities

  34. Contributors • Find out opportunities for Equity, SMEG • Developed the strategy on how to apply • Specific opportunities for SME Instrument • Contacted companies • Collectedbest practises • Developed success stories and Tips

  35. structural elements underpinning the effective deployment of financial instruments in EU Members States • Economic environment • Synergies • Communication • Criteria

  36. A4SMEs Promotional Guide to access financial instruments Focus on InnovFin products List of instruments How and when to apply Success stories Tips and tricks for the success

  37. Main features • Focus on InnovFin products17 InnovFin initiatives focused in different targets • List of instruments Access to Risk finance provides financial solutions to companies, research centers, universities and other entities engaged with research and innovation. • How and when to apply future beneficiaries of the national and European financial supports can submit their applications to the financial intermediaries who will study the evolution process of the project in order to identify the most convenient tool • Success stories based on the Interview of an SME beneficiary of an Innovation Loan granted by Bpifrance with InnovFin SMEG • Tips and tricks for the success

  38. Where???

  39. Where???????

  40. Francesco Ferlaino ferlaino@apre.it sme@apre.it

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