A critical need for high-growth start-ups, especially outside USA and Israel, where substantial early-stage VC venture capital is available, is the "gap funding"--after the initial Government funding and before VC money may be available. AFFACE is the solution to that conundrum

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HDS draft AFFACE Semi-BlindPool 10/18/2015 11:31 AM
The Tech Semi-Blind Pool (TSBP™) as a
Unique, Effective Financing Vehicle For
Bridging the Funding Chasm for High-
Tech (HT) and HealthCare (HC) Start-Ups
(SU)
Let's call TSBP: Accelerated Financing for Funding Accelerator
Companies Effectively
AFFACE™
Mission Statement: for AFFACE to be the leading vehicle world-wide
(outside the USA) for providing the critical "gap," between Government
and VC, financing for incubator/accelerator HT and HC SUs.
The Challenge: Many Governments, especially Germany and other EU
countries, relatively easily provide up to $1 million in equity, non-
recourse loans and grants to SUs. That is usually enough to get the SU
moving toward proto-type or website for HTs and pre-clinical studies
for HCs. Then there is a critical gap in the financing between
Government and VC financing, of which there a paucity on the
continent, for the SUs that are at the end of the Government financing
and before they achieve substantial sales required for VCs.
Opportunity 1. All agree that Europe is full of SUs with tremendous
potential and the number, and probably quality, of the SUs is growing.
But the SUs growth is stifled, big time, by the lack of "gap" financing
that AFFACE will provide.

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Opportunity 2. All agree that European investors are looking for a way
to invest in the SUs. The investors do not have, and should not have,
the expertise to access and invest in, to individual SUs. (Crowd funding
all over the world is contradicting that principle.) They need expert
management and diversification that AFFACE provides.
Opportunity 3. Since AFFACE is the only entity of its type, it has a
greenfield to start and take over the field of gap financing.
Description of AFFACE. AFFACE will go public on the AIM or Frankfurt
stock markets. Say it raises $50million. $25 million will be allocated to
companies currently in the incubator. These companies will be
described (in summary and objectively) so that the investors for the
first time (compared to investing in a public VC or crowd funding):
1. Will know exactly where half of their money is going;
2. Will have an automatically diversified portfolio;
3. Will know what the AFFACE managers are likely to invest in the
future from the known original portfolio.
4. Will have a right of first refusal to buy the stock of the accelerator
companies that do their own IPOs at a 10% discount from the IPO
price.
For the accelerator companies:
1. They will receive from AFFACE a known amount of the critical and
hard to get "gap funding".
2. Likely if AFFACE takes the lead and has the expertise in doing the
gap funding other VCs will join AFFACE in the investment.

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3. Since AFFACE will have a great and unique reputation, it will be a
mark of prestige for the accelerator companies to indicate "An
AFFACE investment."
For AFFACE:
1. AFFACE will have 1/2 of its funds in cash, "dry power", to
invest in the current accelerator companies and prehaps
some new companies.
2. Since AFFACE is such a useful if not crucial financing means,
the first AFFACE fund will be able to clone itself,
3. The AFFACE managers will receive, like VC managers, a 20%
carried interest and 2% per year management fee.
For the Goverments that fund accelerators, AFFACE will provide:
1. A potential repayment for Government loans;
2. A potential profit for the Governments that invest in acclerator
companies funded by AFFACE,
3. The potential for materially increading HT and HC critical
employment.
Summary: AFFACE TSBP will be a WIN-WIN-WIN-WIN vehicle for:
 Its investors;
 Its portfolio companies--bigtime/
 Its managers;
 The countries that do the AFFACE fund.