Venture capital and private equity are crucial financing vehicles in modern economies as they are the main drivers behind innovation-based investment. Innovation implies accepting a risk level far superior to standard investments. Venture capital offers a financing solution for those who have the vision to explore new paths. For a society to call itself innovative it needs to provide the tools for the development of new ideas and the means to finance them. Venture Capital is in fact a Read More

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Newsletter #17, 14th September, 2012
Musikki refreshed 3rd Edition e-Teams I Crash Course
With a blog online and the "Album of the day", Musikki The Jury selected and invited 20 teams to enter the Building Global Innovators
has a refreshed homepage dedicated to a new band program – 3rd Ed.
every week. More news will be announced soon, keep
tuned!
30% of the teams are international and over 50% have international co-
founders! Argentina, Austria, Brazil, Germany, Italy, Iran, Portugal, Russia,
Spain, Turkey, UK and USA are the countries represented this year.
During 4 days a multidisciplinary, hands-on crash course was held in Lisbon
(ISCTE-IUL).
Blastboard the new Springboard resident
, one of the IT & Web
Semifinalist is among the 10 teams invited to participate
in the next Springboard edition. Starting in September,
the Blastboard team benefit from the mentor-led
accelerator London-based program. In Nov.13th they will
be back in Lisbon, for the BGI VC Track Finals deck
pitch.
Portugal announces a €600 million in VC funding
A reform of state venture A networking session closed this first session, a unique opportunity to meet
capital funds has enabled and to pitch for a pool of investors and entrepreneurs.
the launch of new
focused funds to support
startups in several stages Next steps: after a refreshing break teams got back to work on their Go-to-
of maturity. "We want to Market strategies and mentoring meetings. By October the plans will be
create the conditions to compete on a global scale in evaluated by an expert Jury panel (one for each track).
the development and emergence of startups," said José
Epifanio Franca, newly elected president of Portugal
Ventures.
Building an Innovation Ecosystem in Portugal
Portugal Ventures kicks off with funds amounting to
€600 million, including a €20 million a year funding for By Carlos Oliveira
an ignition "VC-like" phase. Read more.
Deputy Minister for Entrepreneurship, Competitiveness and Innovation at
Portuguese Government
Over 50% of Biotech Venture Financings are Early
Stage Deals
Most readers won’t believe the title, or at least not if
they’ve read much in the past few years about the Venture capital and private equity are crucial financing vehicles in modern
anemic early stage biotech environment…It all comes
down to what do we mean by “early stage”. To economies as they are the main drivers behind innovation-based
a biotech hedge fund trader, it might be pre-Phase 2.
investment. Innovation implies accepting a risk level far superior to standard
So these data clearly support the idea that in 2011 the
relative proportion of financings done around “early investments. Venture capital offers a financing solution for those who have
stage” deals is reasonably high. Aprox. 60% of deals
that get funded have some claim to being called “early
the vision to explore new paths. For a society to call itself innovative it

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stage” investments. Read more
needs to provide the tools for the development of new ideas and the means
to finance them. Venture Capital is in fact a part of a virtuous cycle of
innovation where good projects exist because they have access to
All-Desk has a newly-appointed Chairman
financing and venture capitalists exist because they have access to a
The 2nd Ed. IT&Web finalist All-Desk has recently stable, interesting and high potential deal flow. This symbiotic relationship
welcomed Stan Kugell as the company chairman.
between promoters and VCs is the foundation of an innovation-based
society.
The dynamics of a successful VC system are best displayed in the US, by
far the most developed VC market in the world: VC investment amounts to
Stan is a successful serial entrepreneur and investor 0,2% of GDP, is responsible for 11% of the nation’s jobs and global
from the Boston ecosystem. He will help All-Desk
negotiating with investors to raise a series A round, revenues from participated companies ascend to a whopping 21% of GDP.
among strategic support. Want to keep updated on All- Portugal is frankly behind the curve insofar as VC investments are
Desk's developments? Subscribe their monthly
newsletter concerned. We invest only 0,007% of GDP which is low even by European
standards - the EU average is 0,027% of GDP and in Sweden VC
How Y Combinator Built A Billion-dollar Brand For investment accounts for 0,064% GDP.
Startups
It was therefore crucial to develop and promote an innovation ecosystem
Seven years ago, Paul Graham and his now-wife that on one hand enables promoters to develop their ideas and on the other
Jessica Livingston founded a startup accelerator, Y
Combinator. Since then, it has become the most ensures they have access to funding, especially in the early stages of their
competitive startup program in the world. To date, more venture’s development. With that in mind the Government is carrying out an
than 460 startups have gone through the accelerator,
and they've gone on to raise more than $1 billion ambitious reform in public venture capital under the Entrepreneurship and
collectively. "There are a lot of amazing, amazing Innovation Strategic Program (+E+I). That reform has two main objectives:
companies coming out of Y Combinator. They typically
have technical founders too”, which is something a lot of Increasing deal flow and access to funding.
other programs avoid having. As an investor, it means
you have to pay more." Read more Increasing deal flow
Portugal has had historically low levels of innovation based
entrepreneurship and globally few promoters of new ventures. Many factors
wi-GO wins the podium in the Imagine Cup Final
contribute to this state of affairs but main obstacles have been the
wi-GO the 2nd edition P&S Honorable Mention won the inefficient cooperation between the main stakeholders in the innovation
3rd place in the international final of the Microsoft
Imagine Cup. process – promoters, universities, incubators, advisors and financing
sources – and the lack of financing options for new ventures.
The Ignition Platform, launched by the Portuguese Ventures (the new state-
owned VC), will serve as a platform for cooperation between the different
stakeholders. We expect that this increased platform will trigger the
cooperation necessary to an innovation ecosystem while making sure that
entrepreneurs have access to means that allow them to develop their ideas.
In addition, the above mentioned +E +I Program, also contemplates the
development of a methodology to identify companies with high growth
An hard competition between 350 students of 75
countries was held in Sydney, Australia, during 6 – 10 potential, by cross-referencing different investment incentive systems
July. For the first time Portugal stepped in to the
podium! Congratulations to the team. Read more.
databases with references given by the scientific and technologic
environment/system, as well as other entities that serve as interface with
companies.

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The Paradox Of VC Seed Investing
These are important initiatives that improve the availability of follow-up
“Entrepreneurs regularly come to Founders Fund asking services to this type of companies, facilitating better access conditions to
us to lead or participate in their seed/angel round. They
internal capacitation instruments and visibility to raise the interest of major
are often confused or shocked when I try to convince
them that with very few exceptions, it is not in economic groups, financial intermediaries and investors (both national and
entrepreneurs’ best interest to raise seed capital from
large venture firms and neither is it beneficial for large
international).
firms to invest in seed stage companies” says Brian
Singerman. Among the reasons: the structure of VC These initiatives in turn create a friendly environment that attracts new
economics and unavoidable perception issues. Read ideas and new promoters to our envisioned innovation ecosystem. In the
more.
creation process we need quality and quantity. Indeed we are well aware
that for some ventures to succeed many others will fail and we are ready to
Submissions open to the 7th program of I&DT
support both in our journey to create an innovative society.
On the 10th July submissions opened to several
Access to funding
programs under Horizon 2020 – cooperation, capacity,
ideas and people. You can find more about these here. Private involvement in VC financing has been historically low in our country,
more so in a time of economic difficulties. The Government acknowledged
this market inefficiency while understanding that it was crucial to expedite
Horizon 2020 is the
financial instrument
access to funding to promising, innovative concepts. With that in mind, and
implementing with the expectation that an efficient public involvement in the sector will
the Innovation
Union, a Europe 2020 flagship initiative aimed at jump start private VC operations, the Government proceeded with the
securing Europe's global competitiveness. Running reform of the state owned VC operations. We merged the three public
from 2014 to 2020 with an €80 billion budget, the EU’s
new program for research and innovation is part of the entities operating in this sector: Inovcapital, Turismo Capital and AICEP
drive to create new growth and jobs in Europe. Capital Global. The resulting company, named Portugal Ventures, now
centralizes the entire state owned VC operations. It has an investment
portfolio valued at around 600 M€ with investments spread over 180
10 sustainable business ecosystem leaders to
watch companies in several sectors.
The leaders in the sustainable business ecosystem are With this merger the Government goes from being a silent partner to act as
often toiling behind the scenes, but they are working in an active investor interacting with the promoter in every stage of his
very distinctive projects. Get to know the activity fields
and the people behind it. company’s development and contributing decisively to its success. It is this
notion of smart money that will allow for new businesses to mature and
contribute to export increase and job creation. Portugal Ventures has
around 140 M€ available to invest in companies that share this approach
and that prove to be on the leading edge of innovation, willing and able to
compete around the world.
Our end game is to create an environment that attracts private investors,
national and international, to Portuguese VC operations which will allow for
a progressive phasing out of the Government as a VC investor. Once again
Do Portuguese-based startups fit in the StartUp
Genome traits? we recognize that this is a work in progress. In order to attract private
investors we need to have good projects and to do that we must lay the
Startup Genome Compass, is a benchmarking tool for
entrepreneurs which automatically classifies them by
foundations for risk taking, innovative individuals to work in.
type and stage and compare them to other startups in
the same type and stage across more than 25 key The role of Government in the promotion of entrepreneurship does not end
performance indicators. here. We have to continue our efforts to decrease bureaucracy and build on

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This can be a very useful tool for startups to improve
the decisive measures we already implemented such as the Zero Licensing
their decision making. Want to know more?
for the vast majority of industrial projects. We will keep on reducing these
context costs that have for so long decreased our ability to compete with
Check our site for new great job offers here other nations on innovation.
But this cannot be just a Government effort. All the players must do their
Save the Dates – update your calendar now: part for this vision to come to fruition. Promoters must be more active and
risk taking, universities and incubators must serve as true enablers and
Sept - Oct Rock Health Events
advisors and VCs must actively find opportunities and serve as a sounding
26 – 28.09.2012 World Summit on Innovation & board for good ideas to develop and mature.
Entrepreneurship
30.09.2012 Empreendedorismo em Turismo We are committed to a fundamental change in the approach for
Cultural e Paisagístico
14 – 17.10.2012 LES Annual Meeting USA and entrepreneurship in Portugal. We believe that we have in this country the
Canada: Toronto, Canada human capital and the ability to compete with the leading nations in this
15.10.2012 Arrica C - deadline area. Our future relies upon our ability to develop world class innovative
27 – 28.11.2012 RedEmprendia Spin2012
companies that are able to compete in the global marketplace. We will
More events around Europe? Here
continue to facilitate and enable the creation of a new way of doing
business. Entrepreneurship is about taking risks and aiming high. We can
Follow us on make it happen.
The Organization wishes to thank to the Deputy Minister Carlos Oliveira for his
contribution to the current Newsletter issue with this opinion article.
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