This document provides an overview of entrepreneurship and venture capital in Spain. It discusses the historical barriers to entrepreneurship in Spain, including a lack of recognition and risk-taking culture. Prior to 2000, private funding was focused on private equity with few specialized venture funds. Key drivers of change from 2000-2010 included the development of a skilled professional base, lower infrastructure costs, institutional support for entrepreneurs, and the emergence of specialized venture capital funds and success stories. The current economic environment presents challenges, but opportunities remain for focusing on growth, cost control, and adapting strategies for potential exits. The document also profiles Adara Ventures, an $80 million venture capital fund focused on information and communications technology investments in Spain and Spanish companies with a
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Entrepreneurship and Venture Capital in Spain - Nico Goulet - Adara Ventures - Stanford - March 1 2010
1. Entrepreneurship and Venture Capital in Spain NicoGoulet Adara Venture Partners, Madrid, Spain March 1, 2010 European Entrepreneurship &Innovation Program School of Engineering
2. Historical perspective on Venture activities in Spain Drivers of change: 2000-2010 Current environment & implications Adara Ventures March 2010 2 OVERVIEW
3. The entrepreneurial eco-system 3 FRAMEWORK Entrepreneurs & Innovation Venture Funding & Support Success Stories March 2010
44. 16 DRIVERS OF CHANGE Getting entrepreneurs what they need to thrive Capital Including follow-on support and commitment - Configuring subsequent funding rounds Investor management Strategic support Critical one time decisions - Product launch configurations - Strategic partnerships - Mergers & acquisitions Development support Commercial development - Finding and engaging blue chip customers Business development - Structuring product development deals - Distribution or project implementation agreements Team - Attracting and structuring the involvement of talented people Networking Relationships with larger VC’s (local and international) Links to blue chip companies in core and adjacent sectors Access to international peer companies March 2010
45. 17 DRIVERS OF CHANGE Emergence of a SW development cluster March 2010
46. 18 DRIVERS OF CHANGE Emergence of specialized Venture Capital fund managers March 2010
47. 19 DRIVERS OF CHANGE Participation of foreign funds in local investments March 2010
48. 20 DRIVERS OF CHANGE Emergence of significant success stories March 2010
50. 22 CURRENT ENVIRONMENT AND IMPLICATIONS Context Recession, budget cuts, investment plans curtailed Credit crunch Difficulty in raising new funds Very difficult business environment, particularly for smaller, entrepreneurial companies March 2010
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52. Continue to pursue healthy growth targets, focusing on high growth and diversified markets
53. Cost control a top priority, constantly reviewing performance and risk/benefit
54. Pursue funding rounds wherever conditions are favorable, but minimize dependence on external sources
56. 24 CURRENT ENVIRONMENT AND IMPLICATIONS VC’s perspective Focus on strong growth opportunities and diversified markets No debt, only equity: Manage funding and fundability (Even) longer exit horizon People, people, people… Cash, cash, cash… March 2010
58. 26 ADARA VENTURES Apply traditional VC model to the Spanish eco-system $80Mn first time fund Institutional base of investors Focused on ICT Invest in Spain or Spain related companies, with global footprint Seek to leverage experience and networks to drive growth in portfolio companies 13 investments in total: Software services and platforms: 5 investments Mobile and On-Line services: 3 investments Components and semi-conductors: 3 investments Telecoms equipment: 1 investment 8 investments part of strong syndicates Amadeus (2x), Accel, TVM, GIMV, Active Capital Partners, Baytech, Caja Navarra, La Caixa March 2010
59. ADARA VENTURES Live Portfolio Exits Write-offs 27 As of February 2010 March 2010
60. Growth track ADARA VENTURES Active portfolio revenue Portfolio revenue/employee 28 March 2010
61. 29 ADARA VENTURES Our values Spirit of the Firm An entrepreneurial spirit underlies the philosophy of our firm. Creativity, boldness and commitment are critical to everything we do. Our investors’ interests always come first; then the interest of the entrepreneurs we support. By serving investors and entrepreneurs well, our own success will follow. We measure success through tangible results and performance. Integrity, honesty and fairness guide the way we do business. Our Work Our core activities are principal investing and company-building. We take pride in the professional quality and high standards of our work. We would rather be best than biggest. We manage our work and make decisions in an efficient and pragmatic manner. We strive to anticipate the changing industry environments in which we specialize. We seek to remain innovative and regularly challenge our assumptions. People The value of our firm lies in our people. Our main assets are our reputations, knowledge, and relationships. We believe that teamwork, supported by individual initiative, is the best way to obtain outstanding results. We strive to recognize and harness talent, with a preference for diversity in such talent. We look to develop long-term, win-win collaborative and trusting relationships with our stakeholders. March 2010