Slajd 1

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VENTURE
CAPITAL
National Capital Fund (KFK) Capital provider for
VC funds Ewa Krawiec, Investment Manager
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Contents

• Private equity / venture capital

• Equity gap

• KFK as capital provider for VC funds

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Private equity / venture capital

• PE/VC means investments in nonpublic companies,

• PE/VC funds buy shares/stocks of promising
  companies and aim at increasing their value, to
  sell them with a profit,

• PE/VC funds are active investors who support
  companies with their know-how and networks,

• Private equity generally refers to deals in the
  mature part of the market while venture capital
  usually means financing small early-stage
  projects.

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PE/VC supports modern economy

• Revenues of companies financed by PE/VC increased
  by 20 p.a. in comparison with 7-8 of large and
  medium listed companies.

• Companies financed by PE/VC increased employment
  by 14 p.a. on average, that is almost 5 times
  faster than listed cos.

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Polish PE/VC market is growing fast

• Peak fundraising for CEE in 2007 EUR 4.25 bn,

• Domestic investments of EUR 294 m, mainly in the
  media and communication sectors,

• Average investment size EUR 6,4 m and
  increasing,

• 99 of PE/VC capital finances LBOs and expansion.

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but is not financing SMEs!
equity gap means that the market
fails to provide enough equity financing for
small investment projects. The equity gap results
from relatively high cost of preparing and
monitoring of small investment projects as
compared to large projects. Consequently, fund
managers rarely commit to projects worth less
than 1 m. Additionally, small projects usually
carry higher risks which further discourages
managers from investing. On the other hand, small
innovative projects can also produce
above-average rates of return.

• PE/VC investors that operate in Poland are mainly
  large funds with regional focus

• Large funds prefer to commit to large deals

• Commitments start from EUR 3 - 5m per deal

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Death valley is a serious problem
Source prof. dr inz. J.G. Wissema,
Technostarters, why and how?
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KFK as response to the equity gap

• KFK is a holding fund established with the aim to
  reduce the equity gap on the Polish market.

• KFK invests in VC funds targeting Polish SMEs.

• Our investment offer is addressed at professional
  management teams with experience in VC
  investments and focus on innovative projects.

• We offer preferences for private investors that
  reduce their investment risk.

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KFK as a holding fund

• How this all works?

Companies
Private investors
VC Fund
VC Fund
Public Investors (EU)
KFK
VC Fund
gt 20 funds
gt 180 SMEs
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Our investment process

• We have designed our investment process to meet
  best practice that works at recognized
  fund-of-fund investors.

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Our investment activity

• We commenced investing in 2007

• We have 2 portfolio funds BBI Seed Fund and
  Helix Ventures Partners (MCI) focused at
  early-stage, high-tech projects

• Joint cap of those two funds is PLN 100 million

• Next bidding procedure 4Q2008. PLN 200 m at
  disposal, 4x as much as in the first round.

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Supporting VC market with structural funds

• Priority 3 Capital for innovation

3.2. Supporting VC funds
EUR 180m
3.1. Initiating innovative activity
3.3. Faciliating investments in SMEs
EUR 110m
EUR 50 m
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Impact on the SME sector

• We contribute to financing of innovative SMEs

• We aim to stimulate the growth of SMEs via
  partnerships with VC funds. The funds support
  their portfolio companies to pursue the most
  effective growth strategies,

• Around 50 companies from can get listed on the
  stock exchange (NewConnect, main market), which
  will enable them to seek further financing.

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Our place on the market
VC funds
Companies
Investors
Technology parks
Public markets
Business incubators
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Thank you

• Krajowy Fundusz Kapitalowy S.A.
• Krucza16/22
• 00 526 Warszawa
• Tel [phone]
• Fax [phone]
• www.kfk.org.pl
• Ewa Krawiec ewa.krawiec_at_kfk.org.pl