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Phase: Inspiration Missions: Surprise Us

CZ Czech government planing risk capital SEED fund and CzechEkoSystem

Czech goverment planing Risk capital SEED fund with up to CZK 3 bln and CzechEkoSystem to improving consultation services for innovative start-ups and increase their competitiveness.

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Written by DeletedUser

Czech government planning to run a risk capital SEED fund with up to CZK 3 bln. Investment are primarily based on European Union funds from Operating Program Business and Innovation. The state budget and private investors will also contribute to this seed fund. For the first run CZK 660 mil is planned to be released. 

Here is 7 key points of program:
1. Initial investment will more then CZK 5 mil
2. Minimum of 30% funding will be from private sector
3. Investment in time frame of 5 yeas, after share will be sold out and reinvested
4. Not strictly focused, looking for Highly Innovative Ideas
5. Will be backed by system of consultants
6. It's count with 50% will be bad investments investments 
7. There will be a court of businessmans which will select supervisor for investment.

According to official Press Release similar seed funds already operate in France, Italy, Slovakia, Poland and Hungary ?

PS: A large discussion started in many medias about other countries having HANDS OFF policy from such high risk VENTURE investments. Especially many comments see 50% as very optimistic (and vague) target and there is a concerns about to grow innovations under supervisors umbrellas. Today Angels have a 1-2 Year investment period and for many industries 5 yeas investment horizon is long even for Venture capitals. Many countries like Switzerland also prefer just invest only in support services. 

Also CzechEkoSystem to improving consultation services for innovative start-ups. There is planned overall an CZK 260 mil investment, CZK 60 mil is available in first run. This program is run by CzechInvest.

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DeletedUser

The problem that we had in Greece (and still have) and we have found that there is in Europe is that investors don’t hand dawn even the 30%... Basically the problem lay’s on exactly this point. Investors aren’t willing to risk on early stage nothing… for them is irrelevant if they will loose by 80% chances instead of 200K, 100K or 70K for them is still money and what matters for them is the low returns that they get… So programs like that which expecting the combined private assessment/investing to trigger the process are poised to fail because investors simply don’t trigger the process in the magnitude needed… Because what is not understood by all (policy makers, financial engineers, economists etc.), are the underlined mechanics of the cause that makes investors flee from early stage… For an investor is irrelevant if he is going to loose just the tip of his finger or half of his finger… it is still a loss while there are other types of investments that return much more predictable results. So why to risk? Tax breaks and other incentives are based on the assumption that a success would happen so they will get the extra… but that isn’t the case… 80% are the chances of failure for startups…

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DeletedUser

"Especially many comments see 50% as very optimistic", trick here is then you need to select projects with higher protection - like Bio or Nano technology which can be patented and maximum innovation = but this can be achieved only by to investing into radical inventions ?

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