Technology Transfer Accelerator Turkey (TTA Turkey) IP
Conference Turkey 1 30 October 2014 Istanbul
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Agenda 2 1.About EIF EIF Resources, Governance and Investments
Equity Highlights EIF Technology Transfer: History and
Characteristics 2.About TTA Turkey Background, Structure and
Objectives TTA Turkey Fund Targets, Investment Criteria, Investment
Process and Structure Main Terms & Conditions, Flow of Funding,
Time Frame and Process Investment Considerations and Assessment
Criteria
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What is the EIF? 3 The leading developer of risk financing for
entrepreneurship and innovation across the EU Fulfilling our dual
goal and pursuing EU policy objectives as well as financial
sustainability Addressing market needs by acting as a
countercyclical investor in tough economic times Working with
financial intermediaries across the 27 EU countries, EFTA and all
Accession countries Helping SMEs, micro- enterprises and European
regions innovate and grow by making finance more accessible
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Lower Mid-Market Expansion/ Development Capital Early Stage
Business Angels Early Stage Business Angels Involved throughout the
Business Cycle 4 EIF Current Investment Focus Strategic Challenges
Technology Transfer Proof of Concept Business Angels Seed Stage
Technology Transfer Proof of Concept Business Angels Seed Stage
Technology Transfer Accelerator Catalyse hybrid debt finance for
growth Support VC ecosystem and decrease dependency on public
finance Fill funding gap left by institutional investors
Instruments to stimulate innovation, competitiveness and
cross-border investment Investing in VC funds Investing in Growth
Capital Mezzanine European Commission ResourcesEIB / EIF
ResourcesMember States / Private Sector Resources
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EIFs Resources 5 EIF manages resources from different
stakeholders European Investment Bank Risk Capital Mandate (RCR)
EUR 5bn Mezzanine Facility for Growth (MFG) EUR 1bn European
Commission Competitiveness and Innovation Framework Progr. (CIP)
EUR 1bn allocated to equity and guarantees Risk-Sharing Instrument
(RSI) EUR 120m Progress Microfinance EUR 200m National &
Regional Funds 20 European and regional Funds-of-Funds including
Germany, Portugal, Spain, Turkey, UK 14 Holding Funds supported by
structural funds EUR 1.3bn
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Equity Highlights 6 20122011201020092008 Equity Signatures PE
Assets under Management 1 3501 126930733409 6 9525 9195 3674 1033
535 (EUR / m) 2013 1 468 7 904
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EIFs Governance 7 Committed to the highest standards of
governance and integrity Audit Board and both in- and external
auditors oversee Chief Executive and Board of Directors Risk
Management, Legal and compliance units Chief Executive is
responsible for the day-to-day management of the EIF Board of
Directors has a supervisory role and approves all EIF
transactions
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EIF Technology Transfer Aims to Bridge the Gap between the
Research and the Market 8 R&D Technology Transfer Technology IP
Marketable Product Prototype IP University / Research Organisation
Market IP / Idea Spin-out Licensing Collaboration (Contract
Research)
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EIF Technology Transfer History and Characteristics 9
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Close collaboration with TTOs Access to good scientific
research Adequate incentives to Management Team Governance - no
investor involvement in investment decisions Independence and
non-competition of Management Team No direct financing of research
Alignment of interests with long-term focus, up to 10-20 years IP
adequately protected under relevant legislation Minimum critical
size ca. EUR 20-30m 10 Long-term, Sustainable Vehicles With
Like-Minded Investors
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11 EIF Technology Transfer Investments To Date
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Agenda 12 1.About EIF EIF Resources, Governance and Investments
Equity Highlights EIF Technology Transfer: History and
Characteristics 2.About TTA Turkey Background, Structure and
Objectives TTA Turkey Fund Targets, Investment Criteria, Investment
Process and Structure Main Terms & Conditions, Flow of Funding,
Time Frame and Process Investment Considerations and Assessment
Criteria
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TTA Turkey 13 This project is co-financed by the European Union
and the Republic of Turkey This financing is provided from IPA
funds allocated to Regional Competitiveness Operational Programme
which is supported by EU and Republic of Turkey. The Contracting
Authority of this Project is the Ministry of Science, Industry and
Technology, DG for EU and Foreign Relations, IPA-PO, and final
beneficiary is the Scientific and Technological Research Council of
Turkey.
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TTA Turkey Project Level Background 14 Funded by IPA monies
Deadline for Project Implementation: 31 December 2017 End
Beneficiary: The Scientific and Technological Research Council of
Turkey (TBTAK) Project Amount: EUR 30.5 million Project Components:
1.Cornerstone TTA Turkey Fund EUR 26.3 million 2.Advisory Services
and Networking for TTOs and TBTAK EUR 1.35 million 3.Visibility EUR
200,000 4.Impact Evaluation EUR 100,000 2012 20132014 Market Needs
Assessment carried out Business Plan for the Project submitted
Negotiations and Approval Signature Date: July 2014
201520162017
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15 TTA Turkey Project Structure and Main Objectives TTA Turkeys
main purpose is to: Establish an independently managed Technology
Transfer Accelerator Fund that invests in commercialisation of
technology intensive research coming out of universities and
research centres Increase the R&D commercialisation capacities
of TTOs so that they can play a successful interface role between
the industry and the university IPA Resources EIF as Advisor &
Project Manager IPA Resources EIF as Advisor & Project Manager
IPA Commitment to TTA Turkey Fund IPA Commitment to TTA Turkey Fund
Advisory Services and Networking (Technical Assistance) Advisory
Services and Networking (Technical Assistance) TTO s TBTAK
Visibilit y Impact Evaluatio n proceeds
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16 TTA Turkey Fund Target Investments and Region TTA Turkey to
invest in: proof of concept generation projects university /
research center spin- offs, start-ups intellectual property (IP)
assets / projects return for equity into start-ups, spin- offs, and
SMEs 100% of the investments to be made in Turkey A minimum of 30
projects to be selected by the Fund Manager by 31 December 2017 At
least 15 projects shall be identified and invested in the Target
Region (12 NUTS II, 43 provinces)
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17 TTA Turkey Fund Structure
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18 Target Fund Size Indicative Maximum Amount of Funding EUR 30
million EUR 40 million Maximum Contribution from IPA Funds Minimum
Third Party Capital (Private Investors) Applicants Own Commitment
in the Fund EUR 26.3 million EUR 2.8 million 1-5% of the total Fund
size Maximum Investment Amount to a Single Company/Project EUR 2.5
million Over 12 months Maximum Duration of the Fund 10 years
Possibility of extension for 1+1 years 12 years Deadline for the
Funds Investment / Selection Period Deadline for Disbursements by
the Fund 31 December 2017 Portfolio DiversificationMinimum of 30
projects/companies Target Industry Sectors Generalist with
preferred and excluded sectors as covered in details in the Call
for EoI Main Terms & Conditions
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19 Flow of Funding Co D Start up
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Time Frame and Process 20 Next StepsDeadline Requests for
Clarifications from Applicants Accepted Friday, 15 August 2014 EIF
to Reply to Clarification RequestsFriday, 22 August 2014 Call for
EoI Open for Applications Thursday, 11 September 2014 First
ScreeningsSeptember 2014 Scoring and Second ScreeningsOctober 2014
Due Diligence of Shortlisted ApplicantsOctober 2014 Legal
Negotiation & ExecutionDecember 2014
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Assessment Criteria & Scoring 21 QUALITY ASSESSMENT
CRITERIAWEIGHTING 1 Project Relevance, Quality and Coherence
Evaluation of the Fund focus and proposed investment strategy,
including viability of Funds size. Evaluation of the Fund Managers
team profile, including but not limited to: (i) Team stability and
dynamics. (ii) Its ability to implement the Financial Instrument
(iii) Operational, financial, technical and VC competences.
Capabilities as members of Boards and/or committees of an
investment and/or advisory nature. (iv) Prior experience in
technology transfer field, commercialisation of research and
development, business development, IP law. Evaluation of Applicants
investment processes, including deal flow generation, ability to
invest, ability to add value to companies and exit strategy. 40
points 2Project Maturity, Investment Readiness Demonstration of
ability to raise at least EUR 2.8 million of the Fund from private
investors. Demonstration of ability to source deals in Turkey
(SMEs/projects). Investment readiness of the proposed structure
like maturity of the proposed legal structure, including
internationally proven best market practices; outline of any
different legal entities required; planned establishment costs and
details thereof; detailed term sheet; proposed law firm etc. in
order to execute the closing of the fund timely and efficiently. 40
points 3Institutional Capacity & Sustainability Fund Manager
organisation, structure and long-term viability. Assessment of the
corporate governance in place. Assessment of legal structures and
independence. Terms and Conditions, including management fee and
profit share arrangements. Assessment of the alignment of interests
between the Fund Manager and the Investors. Assessment of Reporting
and Control Procedures. 20 points
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Investment Process and Indicative Timelines Understand concept
Based on preliminary questionnaire / concept note Investment
readiness Physical meeting (typically in Luxembourg), opportunity
to articulate investment opportunity, 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 docs drafted on behalf of Manager. EIF reviews
importance of legal counsel 22 First Screening Second Screening Due
Diligence Board Approval 12 months
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23 First ScreeningSecond ScreeningDue DiligenceBoard Approval
Partner Institutions Market Investment Strategy Deal flow Potential
Investors Investment Process TeamTrack Record Governance Management
Company Economics Remuneration / Incentives Investment
Considerations
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Criteria (1/4) Partner Institutions Metrics: Research budget,
peer group comparisons, invention disclosures, IP filed, IP
awarded, growth rates, commercialisation income, encumbrances, 3 rd
party agreements Structure: Organisation structure of TTO, roles,
ownership of TTO Policies: IP policy, rules, regulations, ownership
rights Activities: Industry co-operations, advisory services,
contract research, etc. Financials: For TTO; revenues, royalty
income, grants, licenses, cost of sales, gross profit, operating
costs, gift aid, dividends Metrics: Research budget, peer group
comparisons, invention disclosures, IP filed, IP awarded, growth
rates, commercialisation income, encumbrances, 3 rd party
agreements Structure: Organisation structure of TTO, roles,
ownership of TTO Policies: IP policy, rules, regulations, ownership
rights Activities: Industry co-operations, advisory services,
contract research, etc. Financials: For TTO; revenues, royalty
income, grants, licenses, cost of sales, gross profit, operating
costs, gift aid, dividends Investment strategy Licensing /
Spin-outs: Proposed route for commercialisation Strategy:
Geographical focus, stage focus, sectors, investment sizes,
follow-on and reserve policy, holding periods, role in financing
rounds Fund Size: Justification for size through bottom-up
analysis, min / target / max size, modification to strategy
according to size scenarios Target Profiles: Criteria for
investment targets (company profiles) Co-investors: Envisaged
co-investors at different stages of investments Exits: Strategies
based on previous examples Licensing / Spin-outs: Proposed route
for commercialisation Strategy: Geographical focus, stage focus,
sectors, investment sizes, follow-on and reserve policy, holding
periods, role in financing rounds Fund Size: Justification for size
through bottom-up analysis, min / target / max size, modification
to strategy according to size scenarios Target Profiles: Criteria
for investment targets (company profiles) Co-investors: Envisaged
co-investors at different stages of investments Exits: Strategies
based on previous examples 24 Origination: Source of projects,
networks (formal and informal), privileged / preferential access,
rights of first refusal, option rights Fees: Payments in lieu of
access to pipeline Historical Analysis: e.g. 3-5 years evolution of
deal flow by source, sector, etc. Selectivity Ratio: Historical
examples / experience Pipeline: Current and future opportunities
Origination: Source of projects, networks (formal and informal),
privileged / preferential access, rights of first refusal, option
rights Fees: Payments in lieu of access to pipeline Historical
Analysis: e.g. 3-5 years evolution of deal flow by source, sector,
etc. Selectivity Ratio: Historical examples / experience Pipeline:
Current and future opportunities Deal flow and pipeline
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Sponsors: Main investors, anchor investors, special rights
(e.g. fees, carry, information, co-investment, etc.) Names /
Profiles: Like-minded, long- term investors with soft and hard
commitments Team Investment: Investment to fund, e.g. 1%, 2%, 5%,
absolute amount, split between team members (see also remuneration
/ incentives) Fundraising Strategy: List of other potential /
targeted investors, status of contacts, potential commitments
Sponsors: Main investors, anchor investors, special rights (e.g.
fees, carry, information, co-investment, etc.) Names / Profiles:
Like-minded, long- term investors with soft and hard commitments
Team Investment: Investment to fund, e.g. 1%, 2%, 5%, absolute
amount, split between team members (see also remuneration /
incentives) Fundraising Strategy: List of other potential /
targeted investors, status of contacts, potential commitments
Process: Origination, screening, project / deal review, due
diligence, deal approval, deal structuring, negotiation, deal
completion, contracting third parties Decision-making Bodies:
Bodies, or individuals take final decisions at each stage,
delegations foreseen Process: Origination, screening, project /
deal review, due diligence, deal approval, deal structuring,
negotiation, deal completion, contracting third parties
Decision-making Bodies: Bodies, or individuals take final decisions
at each stage, delegations foreseen Potential Investors Investment
Process 25 Market / Competitors Trends: Targeted sectors,
challenges faced, evolution in previous years Competitors:
Financing, other sources of finance, private / public Demand Side
Economics: Analysis and evidence of demand for targeted projects
Trends: Targeted sectors, challenges faced, evolution in previous
years Competitors: Financing, other sources of finance, private /
public Demand Side Economics: Analysis and evidence of demand for
targeted projects Criteria (2/4)
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Composition: Envisaged team responsible for managing fund, key
individuals from TTO / other, secondees, new recruits (profiles)
Profiles / CVs: Full CVs of team members and key individuals,
specific dates, positions held, achievements Experience: Collective
team experience in IP management, licensing, creation of companies,
investing,, strategy, consulting, etc. Team Collaboration: Years
worked together, prior collective working relationships Workload:
Time commitment to fund vs. other activities, activity allocation,
other board seats Board Members: CVs Composition: Envisaged team
responsible for managing fund, key individuals from TTO / other,
secondees, new recruits (profiles) Profiles / CVs: Full CVs of team
members and key individuals, specific dates, positions held,
achievements Experience: Collective team experience in IP
management, licensing, creation of companies, investing,, strategy,
consulting, etc. Team Collaboration: Years worked together, prior
collective working relationships Workload: Time commitment to fund
vs. other activities, activity allocation, other board seats Board
Members: CVs Previous funds: Metrics, vintage, total size, fund
cash flows, net and gross IRR, LPs, amounts Companies: Previous /
current funds, dates of investment, investment at cost, FMV (EVCA),
gross multiples, forecast exit dates, exit scenarios Individuals:
Track record of individuals, other investment / relevant activity
(e.g. licensing deals) Partner Institutions: Licensing and spin-out
company creation, notable success stories (e.g. Nobel prizes),
products developed Previous funds: Metrics, vintage, total size,
fund cash flows, net and gross IRR, LPs, amounts Companies:
Previous / current funds, dates of investment, investment at cost,
FMV (EVCA), gross multiples, forecast exit dates, exit scenarios
Individuals: Track record of individuals, other investment /
relevant activity (e.g. licensing deals) Partner Institutions:
Licensing and spin-out company creation, notable success stories
(e.g. Nobel prizes), products developed Structure: e.g. UK-LP, SCR,
FCR, NV, SPRL, SICAR, KB, etc. Relationships: Overall structure and
relationships between governing and decision-making bodies. Role
and function of each of the bodies. Specific individuals involved
and respective voting powers and rights CoI: Conflict of interest
management, for example with (other) investors in fund, any
investor (LP) involvement in decision-making Advisory Board:
Composition, largest investors, etc. Structure: e.g. UK-LP, SCR,
FCR, NV, SPRL, SICAR, KB, etc. Relationships: Overall structure and
relationships between governing and decision-making bodies. Role
and function of each of the bodies. Specific individuals involved
and respective voting powers and rights CoI: Conflict of interest
management, for example with (other) investors in fund, any
investor (LP) involvement in decision-making Advisory Board:
Composition, largest investors, etc. Team Track Record Governance
26 Criteria (3/4)
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History: Evolution, founders, key dates and events in
development, significant changes in organisation, strategy,
ownership Legal Status: Capital structure, ownership Regulation:
How the management company shall be regulated, adherence to AML/KYC
History: Evolution, founders, key dates and events in development,
significant changes in organisation, strategy, ownership Legal
Status: Capital structure, ownership Regulation: How the management
company shall be regulated, adherence to AML/KYC Budget: Detailed
forecast budget for Management Company over lifetime of the fund,
under different scenarios, e.g. min / target / max size Management
Fee: Justification for level of management fee, use of fees, fee
offsets Budget: Detailed forecast budget for Management Company
over lifetime of the fund, under different scenarios, e.g. min /
target / max size Management Fee: Justification for level of
management fee, use of fees, fee offsets Alignment of Interests:
Team investments to fund align with investors, long-term time
horizon, team stability / instability Remuneration: Detailed
breakdown of remuneration for all team members including base
salaries, bonuses Evolution: Historical evolution of remuneration
for individual team members in previous years Incentives via Carry:
Repartition of carry to individuals, unallocated carry if
applicable, carry to partner institution(s) Alignment of Interests:
Team investments to fund align with investors, long-term time
horizon, team stability / instability Remuneration: Detailed
breakdown of remuneration for all team members including base
salaries, bonuses Evolution: Historical evolution of remuneration
for individual team members in previous years Incentives via Carry:
Repartition of carry to individuals, unallocated carry if
applicable, carry to partner institution(s) Management Company
Economics Remuneration / Incentives 27 Criteria (4/4)
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Thank You! 28 Jose Romano Head of Region [email protected]
European Investment Fund 37B, Avenue J. F. Kennedy L-2968
Luxembourg Tel.: (+352) 42 66 881 Fax: (+352) 42 66 88 200
www.eif.org
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Technology Transfer Accelerator Turkey (TTA Turkey) IP
Conference Turkey 29 30 October 2014 Istanbul