1. Hungary – EU - Israel Workshop on Start-Ups and Innovation Impact of innovation policy in the Dutch venture capital market Developments on industrial policy and the venture capital market in The Netherlands Tel Aviv 30th May 2011 Jan Dexel Directorate General Enterprise & Innovation Dutch Ministry of Economic Affairs, Agriculture and Innovation

4. Economic added value Technical risk Typical forms of finance “ grants” / subsidies subordinated/soft loans garantees/mezzanine finance/vc - pe Conceptual framework of revolving innovation fund (1) high low Development Science Research Fundamental research Industrial research Experimental development Market introduction Sales Growth Phases of “maturity”: Innovation

8. Developments of the Dutch venture capital market

9. Schematic representation of the equity gap among early stage high-tech SME´s and fast growing companies.

10. Developments of the Dutch venture capital market

11. Afbakening en begrippenkader Developments in the Dutch venture capital market for early stage high-tech SME’s. New early stage venture capital funds BA-pledge funds “ Side-car” funds of later stage funds New boutique funds and CV

12. Generated funds Raised capital Investments Developments of the Dutch venture capital market: the impact of the seed capital scheme

13. Some examples of limited partners joining the Dutch seed capital funds

14. Some portfolio companies Jan 29, 2010 Merus closes EUR 21.7 million Series B financing and enters option agreement with the Novartis Option Fund. Layar maker of augmented reaility applications

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16. Developments of the Dutch venture capital market New challenges ...... early and later stage.

19. Global set-up of the Dutch Seed Capital Scheme fund-of-funds structure External Due Diligence of fund by Advisory Committee TechnoPartner Seed Capital fund Techno- starter Techno- starter Techno- starter Techno- starter Techno- starter Techno- starter Techno- starter Private investors Risk capital Management costs Government ‘ loan’/co- investment Cash flow share Investments through equity or mezzanine. Cash flow share

20. Seed Capital Financial Engineering Pay back ratio´s Period A Period B Period C in [%] - Private limited partners 80 % 50 % 80 % - Government 20 % 50 % 20 % ‘ Cash in’ ∑ cash flow [mln€] ∑ Cash flow Nederlandse staat ∑ Cash flow to private limited partners 5 ‘ Cash flow based risk sharing approach’ - maximum of 50 % government funding - simple example of a € 8 mln fund - € 4 mln from private limited partners and € 4 mln from government 0 4 ∑ Cash flow [mln €] 1 ∑ Cash flow to Government 11 7

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