HIGH-TECH

GRÜNDERFONDS

Dr. Michael Brandkamp

7th of March 2019

Investor´s View on Technology Transfer

Some HTGF -Insights

2

From Globalisation to Slowbalisation

Source: The Economist Jan 26th 2019 / Adjiedj

Bakas

3

Slowbalisation?

We speed up innovation to improve our future!!!

4

We invest in high-tech startups with strong teams and innovative business models in their

seed stage

1 Founded not more than three years ago, „small businesses“ according to EU definition based in or with independent branch office in

Germany

Who we invest in

Strong

teams

in seed

stage1

Innovative

business

models

High-tech

startups …through life sciences, chemistry &

healthcare

…to digital applications & software…

Across industries from hardware, automation, energy…

5

Key Facts HTGF III

Term 6-year investment phase, 7-year divestment phase

Focus seed stage (< 3 years old)

Investment type Up to € 3 million per company

Value add Strategic support from investment managers and hands-on operational support

provided by experts and network

2017

Founded

316,5 Mio.€

Volume

(106,5 Mio. € by

business

investors)

Industry LPs

6

That’s exactly what HTGF offers: Seed investments, know-how and a broad network

Capital for investments

Know-how from 1,958 transactions

Largest active network in the industry

€892,5m across Fund I - III

Financing from the seed phase

Know-how in all life cycle phases

Full access to an extensive network

0

500

1000

1500

2000

2500

Total Seed Series A, B…

Exit

Num

be

r o

f tr

an

sa

ctio

ns 1,958 507

1,354

97

Experts

Investors Industry

Recruitment

pool

Portfolio

7

Results Portfolio – Follow-up financing and Exits

With an external total

volume of

€ 2.045,7 bn

527 Technology firms

financed

1,407 Rounds of follow-up

financing

79% Private

Capital

€705,6 Million from foreign

investors in 126 firms

Stand: 31.12.2018

101

Exits

8

Corporates are very important partners in follow-on financing rounds, too – Over 2.0 € bn in investment from third-party sources to date, € 320 million from corporates

In 1,377 follow-on financing rounds, a total of approx. € 2,001.11m was raised from various third-party sources

(without HTGF funds) for the portfolio companies

Data: 31.12.2018

Incl. VC Ausl. VC BA stockholders public HTGF corporates

19.5 35.0 22.9 22.5

36.7 32.0 30.7 33.3

74.3 21.9

14.3 23.4

51.5

69.1 49.7

128.7

86.3

89.8

11.4 15.4 25.0

40.9

33.6

40.5

56.7

82.6

62.10

6.0

14.7 10.8

26.3

18.7

16.5

74.0

35.6

89.00

42.0

29.8

30.8 26.3

31.7 20.5

22.8

60.7

45.6

18.70

11.4

13.9 12.4

14.5 11.2 15.8

19.6

17.3

19.00

100.0

124.1 120.8

187.4 189.8 177.3

370.4

300.7

394.9

-

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

220.0

240.0

260.0

280.0

300.0

320.0

340.0

360.0

380.0

400.0

2010 2011 2012 2013 2014 2015 2016 2017 2018

9

IP during investment and follow-on: Origin of Seed-Companies & Assets

IP-Ownership & Transfer of Assets Start-Up Type & Origin of Kow-How

• Direct IP-transfer from institutes or TT-Offices.

• Exclusive licensing agreement ideally with call option

(<5%)

• Partly minority stake held by institutes (<10/25%)

• Team & Asset found newCo as “free agents”

• Opportunistic Spin-Out process due to strategy change

(typical)

• Active process with team build up, minority stake and CV

investment

• IP & Assets are owned by founding team

• IP was filed based on own resources

Spin-Off from Universities or

research institutes

Spin-Out from industry

Self driven (&financed)

development of founders.

35

%

20

%

45

%

10

Case-Studies IP-conditions HTGF: License payments, purchase price and share deals

License payments in % of revenue Purchase price/MS-Payments

in TEUR/T$ Shares University/ Research Institute (at Founding / pre-seed)

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

12%

13%

14%

0

100

200

300

400

500

600

700

800

900

• MS • Purchase Price 0%

5%

10%

15%

20%

25%

11

Fundraising in Europe

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

bn €

Source: Invest Europe

Fundraising in Europa – capital raised by VC-Funds in billion €

12

Some issues / de-valuation due to IP during Due Diligence processes

Common IP-issues during DD

• Elder IP (filed at the beginning of research)

• Suboptimal filing strategy

• Early ramp up of fees

• Suboptimal licensing agreement

• Nonspecific and unfavorable conditions

• Timeline of licensing payments

• Unequal de-risking

• Emotions in the negotiation process

• Due to small numbers of cases lack of experience and standards

13

Keyfindings Fundraising, New Investments & Exits

Locomotive under Pressure!

Fundraising positive: more inflows than outflows into the VC industry : Industry is growing!

Valuation soar in early (seed & A) and "explode" formally in later rounds

A-rounds by private investors, B + rounds by large foreign VCs, corporates and family offices

New fund of funds initiatives by EIF , EIB, bpi france, KFW Capital are very welcome and important

Business angels are getting more professional - building funds and looking (not always) for cooperation with

institutional investors

New VC funds

Yield prospects for VCs positive due to exits

Start-up scene on the up

14

Keyfindings Fundraising, New Investments & Exits

Locomotive under Pressure!

Fundraising positive: more inflows than outflows into the VC industry: Industry is growing!

Valuation soar in early (seed & A) and "explode" formally in later rounds

A-rounds by private investors, B + rounds by large foreign VCs, corporates and family offices

New fund of funds initiatives by EIF EIB, bpi france, KFW Capital are very welcome and important

Business angels are getting more professional - building funds and looking (not always) for cooperation with

institutional investors

New VC funds

Yield prospects for VCs positive due to exits

Start-up scene on the up

15

Development of the terms

Size of Follow on Investment Round

of HTGF Portfolio (€)

Pre-Money-Valuation (ave)

Follow on investment of HTGF Portfolio (€)

0

2,000,000

4,000,000

6,000,000

8,000,000

2012 2013 2014 2015 2016 2017 2018

Series A Series B

0

10,000,000

20,000,000

30,000,000

2012 2013 2014 2015 2016 2017 2018

Series A Series B

16

Keyfindings Fundraising, New Investments & Exits

Locomotive under Pressure!

Fundraising positive: more inflows than outflows into the VC industry: Industry is growing!

Valuation soar in early (seed & A) and "explode" formally in later rounds

A-rounds by private investors, B + rounds by large foreign VCs, corporates and family offices

New fund of funds initiatives by EIF EIB, bpi france, KFW Capital are very welcome and important

Business angels are getting more professional - building funds and looking (not always) for cooperation with

institutional investors

New VC funds

Yield prospects for VCs positive due to exits

Start-up scene on the up

17

Achtung, hier müssen Logo, Waben und

Anführungszeichen separat kopiert und

positioniert werden.

Diese sind nicht im Layout verankert.

März 2018

raised € 6.6 million in 2018 for growth

18

Achtung, hier müssen Logo, Waben und

Anführungszeichen separat kopiert und

positioniert werden.

Diese sind nicht im Layout verankert.

Juli 2018

raised € 34 million in 2018 for setting up the space station

19

August 2018

raised € 10 million in 2018 for growth

20

raised € 17.4 million in 2018 for clinical trails

21

Relationship Management, Marketing/Communication, Office

Controlling/IT

Hardware, Automation, Optical Technologies, Energy, Ind. Software

Strong, committed and bags of potential – Just like you

Qualifications

52% have a scientific background

41% have a commercial background

17 different degrees (incl. science, engineering,

economics, law, humanities and many more)

Investment Team

37 employees 27%

45% founders

of whom are women

183 years of investment

experience

317 years of professional

experience

Managing Directors

Life Science, Materials Science, Healthcare, Chemical

Telecommunications, Software, Media, Internet, e-Commerce