9 th ETAP Forum on Eco – Innovation
Financing the eco-innovators
«The Italian Angel Market
&
The Early Stage Investment
Opportunities in
Cleantech»
Paolo ANSELMO
IBAN President
November 2010
4.4.
Italian
BA
Profile
Summary
BA's personal profile from a recent Survey
 IBAN Association’s profile
 The Italian Angel Investing Market
 The Italian Business Angel’s profile
 Seed and Early stage investment
opportunities in cleantech
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4.4.
Italian
BA
Profile
IBAN Association (1)
BA's personal profile from a recent Survey
 It is an Italian non-profit making Association – born in 1999, through a
project promoted by European Commission (DG Industry)
 In Italy, it institutionally represents and promotes investment initiatives in
the venture capital market coming from informal investors, usually called
Business Angels (BA)
 IBAN’s President is board member of EBAN, the European Association
that represents BA Networks and Seed Fund in Europe
 Through its birth, and a close co-operation with AIFI (the Association
representing the formal venture capital in Italy), IBAN has felt up a
remarkable gap in the Italian venture capital chain
Today, IBAN represents a more than 500 informal investors community
across all Italy
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IBAN Association (2)
Our Network to sustain Informal Venture Capital Market
During last years, IBAN has
created a strong “relationship
network” that links
Institutions and Economic
Operators, Know–How and
Expertise,
covering all value chain in the
early stage phase.
In this way, IBAN can really
support “start–up” entreprises in
their growing process.
FINANCING
INSTITUTIONS
SERVICES TO
FIRMS
IBAN
TECNOLOGY
CENTRES
BUSINESS
ANGELS
NATIONAL AND
INTERNATIONAL
PARTNERS
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IBAN Association (3)
Our Network to sustain Informal Venture Capital Market
IBAN
Soci isolati,
autonomi ed
operativi
BAN classico
territoriale
plurisettoriale
BAN tematico, con
operatività
nazionale/interna
zionale
Club di angel
investors
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IBAN Association (4)
Our Publications to sustain Informal Venture Capital culture
•“Legal and Fiscal handbook for BA” - 2010, in partnership with Studio Legale Gianni,
Origoni, Grippo & Partners.
•“Formal Documents for Early Stage Phase” (NDA, Term Sheet, Investment Agreement)
- 2010, with Studio Legale Rossotto & Partners
•“Business Angels and Informal Venture Capital in Italy” - 2009, in collaboration with
SDA Bocconi University – Finance Department
•“Implementation of European MiFiD Directive and IBAN circuit activity”, 2008 – in
collaboration with Studio Simmons & Simmons.
•“Guide to setting up a business with Business Angel” - 2008, in collaboration with
KPMG Italia.
•“Business Angel in Italy” - 2003, in cooperation with Professors coming from
II° Università di Napoli.
•“Standard Behavior Handbook for BAN” in partnership with ISTUD Foundation, 2001.
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Italian Angel Investing Market (1)
Which are the data in 2009 ?
A. INSTITUTIONAL SEGMENT
Venture Capital (VC) and Private Equity companies have invested 2.615
ML €, with a decrease of 52% compared with 2008. Especially, for the
Early Stage sector, they have closed 79 deals for an amount of 98 ML €.
AMOUNT ML €
N. DEALS
Turnaround
416
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Early Stage
98
79
Expansion
371
112
-
-
1.688
72
TYPE OF STAGE
Replacement
Buy Out
Sources: Aifi, 2010
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Italian Angel Investing Market (2)
Which are the data in 2009 ?
B. INFORMAL VENTURE CAPITAL SEGMENT
Investment amount registered by IBAN
Deals
Exit declared
Average amount for deal
Number of examinee projects
EARLY STAGE SECTOR:
Seed
Start up
Early expansion
Other operations
Sources: IBAN, Survey 2009
31.5 Mln €
179
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176.000 €
1.394
32%
38%
27%
3%
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Italian Angel Investing Market (3)
Industry had a strong growth in the last years
Investments Flow in Italy in Early Stage Phase:
Ys 2005-2009 (in Mln €)
160
140
116
Total amount
120
98
Var ‘09/08
– 16%
100
80
66
60
40
20
0
30
28
8
2005
12
2006
20
2007
Informal
31
31.5
2008
2009
Var ‘09/08
+1.2 %
Istitutional
Sources: Institutional (Aifi, Pwc); Informal (Iban)
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Italian Angel Investing Market (4)
Deals in the industry follow the investments
N. Deal Early Stage Phase in Italy
Ys 2005-2009
300
Var ‘09/08
– 10%
250
79
200
150
88
100
50
0
88
52
56
35
2005
71
2006
N. Deal Informal
179
102
120
2007
2008
Var ’09/08
+49 %
2009
N. Deal Istitutional
Sources: Institutional (Aifi – Pwc); Informal (Iban)
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Italian BA Profile (1)
BA's personal profile from a recent Survey
• Man, 49 years old, top manager or entrepreneur, strong academic
background (master’s degree, post-lauream)
• Place of residence in the North of Italy (83%)
• Range of 150-200 km to focus its investments to stress BA commitment
with entrepreneur
• Personal assets available around 1.000.000 € - IBAN Member
• He generally allocates nearly 10% of own assets for Angel Investing
• Average Investment for deal is around 176.000 €
• Interesting in High Tech sector
Source: Iban, Survey 2009
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Italian BA Profile (2)
BA's personal profile from a recent Survey
◆ BA's added values (over the risk capital) are:
- strategies
- contacts
◆ BA's best information's come from:
- IBAN network
- his personal network (others entrepreneurs & friends)
Source: Iban, Survey 2009
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Italian BA Profile (3)
MAIN DIFFERENCES BAs IN USA AND ITALY
USA
ITALY
4.7
1.5
$ 50.000-100.000 (55%)
$ 100.000-1.000.000 (25%)
> $ 1.000.000 (20%)
45%
< € 30.000 (33%)
€ 30-100.000 (33%)
€ 100-500.000(11%)
> € 500.000 (11%)
76%
ICT/software/internet,
manufactures, Health
Care/Med Tech
by 250 km (28%)
ICT/Software/Internet;
Manufactures,
Biotech/Med tech
by 200 km (50%)
37%
42%
Source of deal flow
Formal
Informal
Preferred way out
Trade sale/merger
Trade sale/merger
Average IRR registered
Average holding period
27%
from 3 to 6 years
22%
3.3 years
USA (data 2009) – ITALY (data 2009)
Average amount of deals per BA
Average amount of investment per deal
% Investments in seed and start-up phase
Sectors of investment
Geographic Area of investment
% of potential BAs with no geographical restrictions
Italian Angel Investing Market
2009, % Investments by sector
Software and services
18%
Handicraft manufacturing
17%
Internet
1%
ICT
13%
Financial/ Insurance
4%
Entertainment
8%
Energy
7%
Consumer & Distribution
3%
Biotechnology & Med Tech
27%
Agrofood
2%
0%
Source: Iban, Survey 2009
5%
10%
15%
20%
25%
30%
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What is Cleantech?
Former Energy sector ……
“The US Cleantech Group” provides a comprehensive
definition:
A “new, innovative technology to create products and
services that compete favorably on price and
performance while reducing humankind's impact on the
environment”
&
“offering a cleaner or less wasteful alternative to traditional
products and services”
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The huge scope for cleantech investments
Source: “The Cleantech Group”
• Energy Generation: wind, solar, hydro/marine, biofuels, geothermal, other;
• Energy Storage: fuel cells, advanced batteries, hybrid systems;
• Energy Infrastructure: management, transmission;
• Energy Efficiency: lighting, buildings, glass, other;
• Transportation: vehicles, logistics, structures, fuels;
• Water & Wastewater: water treatment, water conservation, wastewater
treatment;
• Air & Environment: cleanup/safety, emissions control, monitoring/compliance,
trading & offsets;
• Materials: bio, chemical, other;
• Manufacturing/Industrial: advanced packaging, monitoring & control, smart
production;
• Agriculture: natural pesticides, land management, aquaculture;
• Recycling & Waste: recycling, waste treatment.
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Do these cleantech investments
“compete favorably on price and
performance”?
Cleantech “alternative”
Cleantech “alternative”
The “traditional product”
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Trends in cleantech investments
Source: “The Cleantech Group”
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Trends in cleantech investments
Source: “PwC/NVCA MoneyTree report”
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Is the Venture Capital business model
broken?
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The investment opportunity for seedstage investors
• In order to be sustainable in the long-term and avoid dotcom-like
bubbles cleantech investments have to be capital-efficient;
• Cleantech is not only about renewable energies (i.e., PV, wind,
biomasses.); there is a great deal of less capital-intensive investment
opportunities in cleantech: suitable for seed-stage and less risk-averse
investors;
• Cleantech is also about seed- and early-stage investments:
less capital intensive, better valuations, greater value-adding
potential, but higher risk; fixing the big IRR issue of traditional
venture capital investing.
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How is IBAN going to address
these challenges/opportunities?
The forthcoming “Italian Cleantech Club” (1)
• An investment club, operating through syndication, focussed on
cleantech investment opportunities backed by an independent
committee of cleantech specialists to source, and select the best deals;
• Cleantech is a global opportunity; joint-marketplaces to exchange
investment opportunities with some of the world's most successful
cleantech clusters (Sweden, Israel, and other European countries);
• Partnership with online content providers (i.e. www.energiaspiegata.it)
to source the best cleantech technology transfer investment
opportunities coming from the top Italian Universities.
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How is IBAN going to address
these challenges/opportunities?
The forthcoming “Italian Cleantech Club” (2)
• Incubators, Technology Parks, University technology transfer Offices
and IBAN network will be the main deal flow sources
• Seed and Early Stage investments in Italy and abroad between 50k
and 500k euro, with possible co-investment with other Angel groups
and Seed funds;
• The Club will be managed by a specific Advisory Board (5 members)
in charge of scouting and coaching business opportunities, also thanks
to IBAN Association support;
• 3 Investment Forum per year with 6 pitching companies each time;
• Focus on 3-4 years exit time and trade sale way-out (M&A);
• Per each deal a “champion” will manage the due diligence and the
investment process;
• Each ICA members (forecast 15-20) must fill a specific form in with
his/her financial and managerial commitment.
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How is IBAN going to address
these challenges/opportunities?
The forthcoming “Italian Cleantech Club” (3)
Entrepreneur
Business Angel
Contact with IBAN
Identification
Executive Summary
validation
Drafting of Executive
Summary
Preparation of Elevator
Pitch
Confronting offer
and demand
Identification of investment
priorities
Circulation of
Executive Summary
MATCHING
BA added to database
Participation in
investment
forum/club
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A first step has just been done :
“The Green Technologies Investment Forum”
• The GREEN TECHNOLOGIES INVESTMENT FORUM (GTIF), organized in
February 2010 by IBAN Association (Italian Business Angels Network) and the
Swedish Business Region Goteborg AB provided a unique chance during which
investors and entrepreneurs coming from Italy and Sweden matched.
• Eleven Italian and Swedish “green” companies, selected by a panel of experts,
pitched their activities to qualified investors, Business Angels, Seed, Venture
Capital Funds and Trade operators.
• During the event two break-outs had been forecasted in which an Italian and
Swedish keynote speakers presented strengths, weaknesses and opportunities
of today clean-tech market.
• All companies had a marketplace area where they could meet investors during
and after the event
• To cross experiences, best practices, business and trade opportunities
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and networking have been the key words of the initiative
www.iban.it
Via Borgonuovo, 5
20121 Milan – Italy
TEL.+39.02.89011207
FAX +39.02.89011299
segreteria@iban.it
Member of:
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