thuja presentation bio business summer school 2015

23
BioBusiness Summer School 2015 Venture Capital Michel Briejer 1

Upload: thuja-capital

Post on 11-Aug-2015

195 views

Category:

Health & Medicine


0 download

TRANSCRIPT

BioBusiness Summer School 2015

Venture Capital

Michel Briejer

1

BioBusiness Summer School 2015

What is venture capital?

Venture• High risk enterprise• Technology based• Relatively lengthy development trajectory• Much money needed (millions of Euros)• No short-term profitability or positive cash flow

Capital• Financing in return for an equity stake (shares: co-ownership)

Sub-category of private equity• Investments in private (non-public) companies

2

BioBusiness Summer School 2015

Why venture capital

3

Life of company (years)

Capi

tal n

eed

(mio

Eur

o)

University Late stage VCs

Informal investors Revenues from sales and partnering

Subsidies, “soft loans”

Early stage VCs

Bank loans

BioBusiness Summer School 2015

Venture capital and innovative companies

• Venture capital is an essential part of the innovation ecosystem

• Particularly important to enable transition of technological inventions towards commercially viable products

• Almost all successful high-growth technology companies have had venture capital at their basis to fund product development

4

BioBusiness Summer School 2015

VC as part of the innovation ecosystem

5

BioBusiness Summer School 2015

Types of VCs – by stage

Seed/early stage• Fund size € 10-50 mio• Limited geographical focus• Hands-on, active, assistance in setting up and building company and further fund

raising• Seed capital, series A-B funding

Mid/late stage• Fund size € 50-250 mio and beyond• Continental or even WW focus• Mature companies, experienced management• Supervision from a distance• Series B-E funding

6

BioBusiness Summer School 2015

How a VC makes money (ROI)

Trade sale • Sale of shares to an external buyer• Sale of part of, or entire, company in return for cash

Initial Public Offering (IPO)• Sale and trade of shares at a stock exchange (public trading)• In recent years the IPO route has not been an option

Dividends (profit share)• Do not provide the return on investment pursued, poorly compatible with pursued

financial dynamics

7

BioBusiness Summer School 2015

How a venture capital fund gets its money (1)

8

BioBusiness Summer School 2015

How a venture capital fund gets its money (2)

Party

Institutional investors (pension funds, insurance companies, banks)

Family officeshigh net worth individuals

Governments (RVO,European Investment Fund)

Universities

Companies

9

Drivers

Return

Return, impact investment, philantropy

Stimulate innovation climate

Stimulate spin-offs, return, “valorization”

Strategic motive

BioBusiness Summer School 2015

How a venture capital fund works

10

Venture capital fund

Portfolio

Valuecreation

Exit

Return

Institutional investors

BioBusiness Summer School 2015

The work of the VC

11

Venture capital fund

Portfolio

Value creation

Exit

Return

Institutional investors

Fundraising Selection

Active support

Active support

BioBusiness Summer School 2015

Venture capital - fund structure

Most funds have a similar set-up, typically:

• Closed end: fund ends after 10 years (+2)

• Fund investors (limited partners) commit money, and money is called pro rata for each investment/round

• Fund management co-invests in fund (1%) – and hence also benefits from a good fund performance

12

BioBusiness Summer School 2015

VC money is difficult to obtain

13

150+ new business plans

5-10 selected

1-2 new Investments

PER YEAR

BioBusiness Summer School 2015

The quest for return on investment

A VC fund is successful if it generates a good return on investment

• Quick exit generates better return than exit after long period (IRR)

• Overall fund money multiple of >3x (or better: IRR >30%)

• Per fund portfolio of 10-12 companies 3-4 companies need to be exited with multiple of 5-10x

How to select high-potential propositions with a prospective for good return on investment?

14

BioBusiness Summer School 2015

IRR and Money Multiple

15

BioBusiness Summer School 2015

A VC weighs the following characteristics

Proposition• Fit to fund focus and strategy• Feasibility• Realistic plan, timelines, costs• Commercial potential• Risks

Team• Experience, capability and credibility• Chemistry, trust and added value between team – VC

ROI• Pre-money valuation: number of shares obtained for investment• Investment round size, use of proceeds, value creation• Exit possibilities, exit horizon, capital need toward horizon

16

BioBusiness Summer School 2015

What to watch for in a VC

Fund focusFit of VC with proposition, in terms of experience, portfolio, but also company stage

NetworkDoes the VC have an interesting and relevant network?

Know how and experienceAre fund managers of potential value to the company?

Chemistry Ability of building fruitful relationship during the long-term commitment

17

BioBusiness Summer School 2015

Investment process and support Thuja

18

Source

Clos

ingSelection Analysis

Active sourcing:• Universities• Network• Field monitoring• Meetings

Passive sourcing

• Focus funds• Investment

criteria

• Presentation(s)• SWOT• Business plan

refinement• Team• Preliminary

Investment Proposal

Negotiation

Term

she

et

Value creationDue diligence

• In-depth due diligence

• Structuring• Legal

documentation• Internal approval

process

• Terms• Valuation• Investment• Business plan• Structure• Capital need• Syndicate

Exit

• “Hands-on” support and guidance

• Leverage network• Supervisory

Board• Connect to VCs

and business partners

• Support business development

• Connect to exit parties

• Active exit management

Investment process Support

BioBusiness Summer School 2015

Thuja Capital

Management of five funds• AlpInvest Life Sciences portfolio (completed)• Thuja Capital Healthcare Fund I & II (divestment stage)• Thuja Capital Healthcare Seed Fund I & II (investment stage)

Team• Harrold van Barlingen – managing partner & founder• Michel Briejer – managing partner• Undisclosed – partner-to-be• Martin Solleveld – financial controller

Office: Utrecht Science Park

19

BioBusiness Summer School 2015

Thuja Capital Healthcare (Seed) Fund - portfolio

20

Company (location) Product Class Status

ArGEN-X (NL/B) TherapeuticsParticipation since 2008, IPO 2014

Bioceros (NL) Therapeutics Sold in 2011

Cavadis (NL) Medical devices (diagnostics) Participation since 2010

Cristal Therapeutics (NL) Therapeutics Participation since 2012

DCPrime (NL) Therapeutics Participation since 2010

Fabpulous (NL) Medical devices (diagnostics) Participation since 2009

Hemics (NL) Medical devices (diagnostics) Participation since 2011

Mellon Medical (NL) Medical devices Participation since 2013

NightBalance (NL) Medical devices Participation since 2011

Okapi Sciences (B) Therapeutics Sold in 2014

TheraSolve (B) Medical devices Participation since 2011

BioBusiness Summer School 2015

Thuja Capital Healthcare (Seed) Fund II

Geography• The Netherlands and Belgium (mainly Flanders)

Stage• Early stage: Seed, Series A

Technology focus: medical products• Novel therapeutics, new formulations, novel applications• Medical devices, medical technology, diagnostics, biomarkers• Cross-over products• Medical foods

21

BioBusiness Summer School 2015

Fundraising trends

Difficult fundraising climate (still)• Poor financial climate does not stimulate appetite and makes investors risk averse• Banks are faced with Basle-3, insurance companies with Solvency-2 rules which

reduces their ability to invest• Pension funds are rethinking their investment strategy

Upcoming importance of alternative money sources• European Investment Fund and national fund-of-funds• Family offices and private investors• Strategic investors

22

BioBusiness Summer School 2015

Contact information

23

This document neither contains an invitation or offering of securities, nor should it be regarded as an investment advice. This document may not be reproduced or (re)distributed in whole or in part in any form or by any means without the prior written consent of Thuja Capital. The information contained in this document , including the additional oral and written information has been compiled from sources Thuja Capital believes to be reliable. Thuja Capital will not assume nor accept any responsibility in relation thereto. This information may be changed or updated by Thuja Capital without notice.

Thuja CapitalYalelaan 403584 CM Utrecht

Tel: 030 253 3849Mobile: 06 2246 2927Email: [email protected]

Web: www.thujacapital.comTwitter: @ThujaCapital