Dilutive funding and non dilutive funding options in Portugal for high growth/high risk startups in Portugal: the state of the art.

1. From science to technology:
Options for Funding high potencial new
ventures in Portugal
ECS, University of Minho, 06.01.2015, Braga.
Gonçalo Amorim
Program Director, MIT Portugal – Innovation & Entrepreneurship
Initiative
ISCTE-IUL Business School

2. Typical tech transfer challenges:
• Can my “research” be turned into an (enabling) techno
logy?
• What problem can (I help) solve?
• What industry(ies) may be interested in it?
• How can I “package” it into a solution (offer)?
• What prototypes do I need to design / test?
• How can I fund these activities?
• What is the size of the opportunity?
• How do I protect the IP & my future business?
© Building Global Innovators, 2015.

3. Typical tech transfer challenges (II):
• When do I incept the company?
• Who is the founding (dream) team? Skillset?
• How can I bring key advisors and KOLs?
• Can I validate the market?
• How much further R&D do I need?
• How much funding?
• How much will I charge for my product?
• What (product) features are most important?
• How do I devise a (credible) Go to Market plan?
• …
© Building Global Innovators, 2015.

4. Great, but I do I get some funding?
To conduct basic activities to address those challen
ges you have several options:
1. Non dilutive funding:
• Suitable for initial stages, i.e. validation, finding your market,
defining product etc.
2. Dilutive:
• Requires company formation, full time team, should enable
faster growth.
NOTE: Investors do not fund “science” per say, nor product R&D.
They fund companies, i.e. their business prospects.
© Building Global Innovators, 2015.

5. Typical funding sources in Portugal:
DISCLAIMER: always think big, but make sure to start small (taking a baby step ap
proach is always the best route).
1. Non dilutive:
• University funded projects
• P2020 grants (eg. Former QREN),
• H2020 SME instrument, “Compete” funded
programs (FP7 consortia etc)
• Other research / EU science grants
• Prize awards (R/D institutions & private corporates,
eg. Novo Banco inovação etc).
• Best option: paying clients (samples, trials, pilots,..)
© Building Global Innovators, 2015.

6. Typical funding sources in Portugal:
2. Dilutive (pre-seed, seed & early stage):
• Accelerators (BGI, Cohitec & Lisbon Challenge)
+ long tail of others (http://www.f6s.com/accelerators/portugal)
• Up to 300k€/venture; typ. 5% - 12% dilution for 50 - 100k€
• Business Angels:
• Typically 50k€ to 300k€ (above that, possible but rare)
• Sample: Dueto, Shilling Capital, Faber ventures…
• 30+ entities (http://www.portugalventures.pt/en/contents.html?hrq=338)
• Early stage VC’s (sample):
• Typically 200k€ to 500k€
• Public: Portugal Ventures (Call for ignition)*, Caixa Capital
• Private/CVC: ES Ventures, EDP ventures, Novabase Cap.
* - For more information on Ignition partners: http://www.portugalventures.pt/en/contents-portfolio.html?hrq=148© Building Global Innovators, 2015.

7. Typical funding sources in Portugal:
Final comments on dilutive funding:
• Early stage risk capital invested in PT/ year:~€30 Million (growing fast)
majority of allocated € to early stage BA/VC is public
• Caveat: there is no later stage VC’s in Portugal, i.e. Rounds above
1 million are extremely rare (sub 5 per year)
• Truly Smart capital is seldom, but increasing
• Option: It is becoming more common to do early stage funding in PT
followed by international series A (syndicates) INRO USD$ 2 to 5M
• DO NOT go international before you get some home traction in
terms of critical milestones (product, BA/VC funding or other critical)
• Looking for funding is a FULL TIME activity, can take you up to 18
months or more to get funded, depending on stage of development
• Specialized accelerators are the gold standard to get you started in
the right path
• Good access to capital, especially human is absolutely critical in the
process of building your venture (in initial stages even more than $$).
© Building Global Innovators, 2015.

8. Typical funding sources in Portugal:
Interesting sources on funding & portfolio Co’s:
• Portugal Ventures annual report (2013):
• http://www.portugalventures.pt/arq/fich/R_C_2013_PortugalVentures
_vb.pdf
• Caixa Capital Funds:
http://caixacapital.pt/caixacapital_PT/09_fundos.aspx#.VK5xH8YgxMI
• For list of investors and other in PT:
http://portugalinnovation.go4venture.com/investor/
• Portugal Ventures portfolio:
http://portugalinnovation.go4venture.com/company
• Building Global innovators alumni companies:
http://mitportugal-iei.org/index.php/2014-07-02-17-27-43/alumni/all
© Building Global Innovators, 2015.

9. Gonçalo Amorim
Executive Director, BGI SA
MIT Portugal – Innovation & Entrepreneurship Initiative
ISCTE-IUL Business School

10. Building Global Innovators © Accelerator:
• Entrepreneurs & Innovators (tech Start-up / Spin-out
under 5y, <2.5M€ turnover/y)
• Seed & early stage investors: Angel, VC & Corporates
• Stakeholders:
• Universities (tech transfer, University’s 3rd mission, impact)
• Governments (jobs, growth, taxation)
• SMEs and Corporations (open innovation)
• A deep innovation technology Accelerator for new ventures
Target audiences:

11. In a nutshell:
- International accelerator, based in Lisbon & Cambridge (US)
- Held once a year (6th ed. launched March 15th)
- Over 1,150 hours of expert mentoring per startup / edition
- 4 Market-applications, B2B focused on verticals:
1. Medical Technologies & Health IT
2. Smart cities & Industrial Tech
3. Enterprise IT & Smart Data, and
4. Ocean (blue) Economy.

12. 6th Edition Key Dates:
March 2nd Submissions open
May 24th June 8th Deadline for submissions www.mitportugal-bgi.org
July 16th Batch of 20 ventures announcement
July 27-31st e-teams I bootcamp (Lisbon @ ISCTE-IUL)
November 19th Demo Day I (Lisbon @ ISCTE-IUL)
November 20-21st e-teams II bootcamp (Lisbon @ ISCTE-IUL)
February, 2016 Demo Day II (Lisbon, venue TBD)
Spring 2016 e-teams III bootcamp (Cambridge / US @ MIT)

13. BGI aims to help its startupers to:
• Identify from local to global value propositions and
accelerate business ventures leveraging on
differentiated technologies
• Facilitate scaling up via series A Venture financing &
connecting global Innovators to global Investors.
13

14. 1
4
Copyright 2009-2010
Audax Center for
Entrepreneurship
ISCTE-IUL
1
4
Mission statement:
BGI facilitates value creation & early stage launch
of tech-based newCo's by helping Innovators
focusing on market facilitation and development
by bringing business acumen to entrepreneurs
and connect entrepreneurs to the international
venture finance community.
Mission:

15. 5
Building Global innovators©
Where does BGI stand internationally?
Aprox. US$40 million raised
Source: Adapted from the Economist, Special Report “Tech Startups: A Cambrian moment”, Jan. 18th 2014.

16. Developed over a 5 year collaboration with MIT Portugal* in early stage
deep innovation commercialization (* - inspired on Deshpande’s model).
› BASF
› Galp
› Amorim
› Nokia
› Cisco
› Efacec
+
› Sonae
› PT
› BRISA
› Odebrecht
› Google
› ...
INPUT:
Tech-based
solutions
aimed at
Enduring
global needs
OUTPUT:
Successful
Ventures that
generate
societal &
economic value
CUSTOMER VALIDATIONS
(B2B):
• 1.800+
Entrepreneurs
• 500+
Applications
• 101 selected
(inc. Ed5 batch)
• 300+
globalpreneurs
• 68 active
startups
• >32M€ in
venture
financing.
BGI´s unique acceleration model:
+
+

17. BGI Alumni (sample):

18. 6

19. Financing raised by BGI alumni:
Case studies:
• Veniam works (Smart cities): closed series A $US 4.9 million
• Movvo (Smart cities): closed series A $US 2 million

20. BGI Alumni (sample):
10

21. Para informação e registo.