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IGNITING INNOVATION! April 21 st 2010. VENTURE CAPITAL — CAPITAL EMPRENDADOR 2.
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Transcript of IGNITING INNOVATION! April 21 st 2010. VENTURE CAPITAL — CAPITAL EMPRENDADOR 2.
IGNITING INNOVATION!
April 21st 2010
VENTURE CAPITAL —
CAPITAL EMPRENDADOR
2
The Entrepreneurial Funding Continuum
3
SEED/START-UPFUNDING
DEVELOPMENTFUNDING
EXPANSIONFUNDING
OPPORTUNITYDEVELOPMENT
CONTINUEDGROWTH
ANGELS, FOUNDERS & SEED FUNDS
VENTURE CAPITAL – GROWTH EQUITY
PE - PUBLIC MARKETS
VALUATIONS INCREASE
BUSINESS RISKS DECREASE
MENTORING NEEDS DECREASE
$5M-20M$500K-5M$50K-500K >$20MSweat
3
4
Business lending has experienced negative growth and has not kept pace with consumer credit. Companies are starved for growth capital to keep up with the market demand.
Mexico’s Lending & Investment Gap
Loan Growth in the Mexican Banking System
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
1999 2000 2001 2002 2003 2004 2005 2006
Yea
r-o
ver-
year
gro
wth
Business
Consumer
Housing
SOURCE: Comision Nacional Bancaria y de Valores
4
5
Mexico’s Small and Medium CompaniesHave Very Limited Access to Capital
Classification # Companies # Employees Sales / coUS$mm
LARGE 976 > 1,000 > $130.0
MED - LGE 5,732 250 - 1,000 $10.0 - $130.0
MED 10,931 100 - 250 $4.0 - $10.0
SMALL 134,227 11 - 100 $0.2 - $4.0
MICRO 2,853,291 0 - 10 $0 - $0.2
3,005,157
Company Classification
Source: INEGI and AGC estimates
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6
Micro (1-4) Pequeña (5-99) Mediana(100-499)
Grande(500 +)
2,699,400
288,118
14,974 2,665
6%
15% 16%
34%MEXICO STATISTICS, 2004
# O
F B
US
INES
SES
% G
DP
/SA
LES
FO
R E
AC
H
BU
SIN
ES
S G
RO
UP
9% of busi-nesses
.5% of busi-nesses
90% of busi-nesses
.09% of busi-nesses
A.T. Kearney and Endeavor Studies: Supporting Small & Medium Businesswill Accelerate México's Economic Growth
6
Funding Continuum – Mexico’s Funding Gap
7
SEED/START-UPFUNDING
DEVELOPMENTFUNDING
EXPANSIONFUNDING
OPPORTUNITYDEVELOPMENT
CONTINUEDGROWTH
ANGELS, FOUNDERS & SEED FUNDS
VENTURE CAPITAL – GROWTH EQUITY
PE - PUBLIC MARKETS
VALUATIONS INCREASE
BUSINESS RISKS DECREASE
MENTORING NEEDS DECREASE
$5M-20M$500K-5M$50K-500K >$20MSweat
Financing Gap in Mexico
7
19
90
19
91
19
92
19
93
19
94
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95
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96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
6000700080009000
100001100012000130001400015000
First PAN governor elected;
PRD created
IndependentElectoral Institute
established
PRI loses majority in Chamber of
Deputies
PRD wins D.F. vote
NAFTA;Central bank
independence
Peso crisis; floats
currency; receives US
bail-out;
EFTA;Investment Grade
OECDentry
First wave of Privatizations
AFOREs; stricter accounting standards; repays U.S.
bailout
Sale of troubled portfolios
and intervened
banks
Fox elected;PRI loses majority in
Senate
First 30-year fixed rate Peso bond
issue
US$
Calderon
elected
GDP (PPP) per Capita from 1990-2009: 3.3% CAGR
Mexico’s rising GDP and is paralleled by an improving political and regulatory environment
Mexico Market – Promising and Rising Stability
88
ENDEAVOR’S PORTFOLIO 15.36% CAGR
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Crecimiento en Ventas del Portafolio Endeavor
$234 M
$162 M
$120 M
$79 M
$51 M$26 M
$12 M
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
2001 2002 2003 2004 2005 2006 2007 2008 2009
Ventas
# de compañías 4 8 15 21 26 29 37
Portafolio CAGR: 15.36%
What Could Mexico’s
Entrepreneurs Do If They Had
Capital?
1010
We are about to find out!
1111
Filling the Seed and VC Gap in Mexico
12
SEED/START-UPFUNDING
DEVELOPMENTFUNDING
EXPANSIONFUNDING
OPPORTUNITYDEVELOPMENT
CONTINUEDGROWTH
ANGELS, FOUNDERS & SEED FUNDS
VENTURE CAPITAL – GROWTH EQUITY
PE - PUBLIC MARKETS
$5M-20M$500K-5M$50K-500K >$20MSweat
12
Investment Clubs
Industry
Financial
Entrepreneurs
Government
Research Universit
ies
Venture Ecosystem Participants1313
Industry
Financial
Entrepreneurs
Government
Research
Universities
Investment Clubs140 Families
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Together we are going to shake things up!
ANGELS
14
Rogelio de los Santos
Managing Director
Alta Ventures Mexico
Thank You15
Paul Ahlstrom
Managing Director
Alta Ventures Mexico
T +52(81) 8000-7005
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