Dutch innovation and entrepre- neurship policies, interventions in - - PowerPoint PPT Presentation

Dutch innovation and entrepre- neurship policies, interventions in the venture capital market.

8th September 2015, OECD Paris Dutch Ministry of Economic Affairs Directorate General Enterprise & Innovation Jan Dexel j.dexel@minez.nl

Dutch Ministry of Economic Affairs

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The Netherlands in the world, the humble giant?

135th Size 52st Population 17th Economy GDP 12th Universities in top 200 10th GDP per capita 8th WEF Global Competitiveness 2013 6th EC Innovation Union Scoreboard EU2014 4th INSEAD World’s Most Innovative Countries 3th Best country to live 2nd Agro exporter 1th Commodity trading globally 1th most enterprising country in Europe

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The Netherlands in the world, the humble giant?

135th Size 52st Population 17th Economy GDP 12th Universities in top 200 10th GDP per capita 5th EC Innovation Union Scoreboard 5th WEF Global Competitiveness 4th INSEAD World’s Most Innovative Countries 3th Best country to live 2nd Agro exporter 1th Commodity trading globally 1th most enterprising country in Europe d

The Netherlands in the world, the humble giant?

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Economic Top sectors

Generic interventions and additional focus on the nine economic top sectors of the Dutch economy based on comparative advantages

• Water
• Food
• Horticulture
• High tech
• Life sciences
• Chemistry
• Energy
• Logistics
• Creative industry

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Changes in the Dutch Innovation and Industrial policy landscape

• Policy changes
• Shift in financial approach;
• Budget cuts
• From subsidies to (soft)loans, risk capital & garantees
• More emphasis on tax measures: corporate tax reductions,

WBSO (wage tax reduction for R&D) and RDA (tax reduction for R&D-investments)

• Shift in focus of research and innovation, focus on nine top

sectors and development of generic revolving innovation fund InnovatiefondsMKB+ / Toekomstfonds

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Risk profile high low Loans Subordinated loans / mezzanine

Banks

FFF Informals Venture capitalists Private Equity

Positioning of schemes in portfolio: risk profile versus maturity phase of company/organisation.

Risk capital Prepare Start Growth Expansion Consolidation

“Right horse for the right course in the financial landscape”

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Risk profile high low Loans Subordinated loans / mezzanine

Banks

FFF Informals Venture capitalists Private Equity BMKB GO Growth facility Intern. instrum. ROM Seed capital

Qredits microkrediet

Positioning of schemes in portfolio: risk profile versus maturity phase of company/organisation.

Risk capital

Fund-

• f-funds

Prepare Start Growth Expansion Consolidation

“Right horse for the right course in the financial landscape”

• OECD Review Netherlands, 2014:
• “Venture capital investment as a percentage of GDP is roughly on par with some comparator

countries in the EU but is far behind the leading countries.”

• “The fund of funds and co-investment approaches are considered good practice owing to

their reliance on private investors’ expertise, incentives and resources.”

• Review of Finance, 2015, “The Effects of Government-Sponsored Venture Capital:

International Evidence*” / Oxford Entrepreneurship Policy Roundtable, May 2015

• “significant evidence of additionality—evidence that government-sponsored venture capital

activity increases the total amount of venture capital funding available.”

• “enterprises with mixed funding are significantly more likely to have successful exits than

enterprises that receive pure private venture capital funding while enterprises that receive pure government-sponsored funding are less likely to have successful exits.”

• “for enterprises receiving mixed funding, it seems that the better exit performance is due

largely to obtaining more investment”

Peer reviews

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The Dutch VC ecosystem is well developed, but improvements are possible

Grants/subsidies Equity Alternative finance Subsidies Equity Subordinated loans Alternative finance Subsidies Equity Subordinated loans Bank loans Alternative finance

Seed capital “Start up” Growth capital “Scale up” Management buyout “Staying ahead

FFF & Informals > 40 seed capital funds > 7 regional investors > 41 venture capital funds + 13 corporate venture capital funds 12 growth capital funds < €150 mln 45 MBO/MBI funds Stock exchanges

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The Dutch VC ecosystem is well developed, but improvements are possible

Grants/subsidies Equity Alternative finance Subsidies Equity Subordinated loans Alternative finance Subsidies Equity Subordinated loans Bank loans Alternative finance

Seed capital “Start up” Growth capital “Scale up” Management buyout “Staying ahead

FFF & Informals > 40 seed capital funds > 7 regional investors > 41 venture capital funds + 13 corporate venture capital funds 12 growth capital funds < €150 mln 45 MBO/MBI funds Stock exchanges EZ VFF EZ ROM’s EZ Seed Capital EZ & EIF Dutch Venture Initiative

• Dutch entrepreneurs are building more and more world-leading

companies

• The Dutch VC ecosystem is well developed, but improvements

are possible

• Larger fund sizes would enable Dutch fund managers to finance

successes through the growth phase

• Larger fund sizes would enable Dutch fund managers to attract

more (foreign) institutional investors

• Larger funds would require a wider geographic scope: invest in

Dutch world-leading companies through European growth capital funds

Developments in Dutch later stage venture capital market.

[ref. NVP 2015]

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“Corporate structure” DVI

Fund-of-funds

“Dutch Venture Initiative”

“First closing” €150 mln “Second closing” additional €150 mln EIF EIF PPM Oost 3e private LP(‘s)

LP’s

Advisory & fund- management role for EIF

Portfolio of fast growing innovative companies “Later stage funds” Portfolio of “Fund-of-funds”

Fund M Fund N Fund Z

Investment committee Board

• Fund-of-funds investing in VC/PE funds focussing on Dutch innovative

SMEs

• Sectors (« Topsectoren »): LS, High Tech, Cleantech, ICT,…
• Fund size of EUR 157.5m
• Complementary to other products of the Ministry of Economic Affairs

(such as Seed Capital and Innovation Credit)

• Targeted portfolio of some 12-15 funds
• Advised by EIF

Key facts Strategic partners

Dutch Venture Initiative / DVI-1

• Ministerie van EZ
• EIB Group / EIF
• PPM Oost
• BOM

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Dutch Venture Initiative / DVI-1

DVI’s Underlying Dutch SME Portfolio

International portfolio of companies >50% is Dutch

Dutch entrepreneurs are building more and more world-leading companies

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