SIB Net - Small Innovative Business Promotion Network NEWSLETTER Autumn 2010, No1 Success stories from Latvia Pre-incubation Cross-border business idea contest: Innovative business ideas wanted Business Angels Network - to be or not to be About the SIB Net project Mobility for Ideas
Dear readers, What this is all about I am thrilled to present to you the very first SIB Net Newsletter, the idea of which was born during the development of the project application. The whole project team has joined in order to address issues and challenges of providing the support for new entrepreneurs in start-up phase. SIB Net Newsletter will be the window through which we circulate the most interesting and valuable results of the project. Discover and enjoy! Valdis Avotiņš: New innovative high growth companies needed Interview by Alise Brice What is the main goal and most important result of SibNet project, in your opinion? V.A.: Both, Latvia and Estonia, have a lack of new sustainable and high growth innovative companies. If we look deeper, the problem is that we do not have enough new innovative business ideas and also do not have the sufficient support to develop them. It follows that main goal of the project is to promote establishment of new innovative high growth companies (so called gazelles ) and their development in early entrepreneurial stage. Speaking of the most important result it would be the belief that also in regions outside the capital city, there is a possibility to promote new innovative high growth firms. What are the benefits of participating in this kind of international project? V.A.: Firstly, it is a possibility to gain new experience from our neighbouring country Estonia. Secondly, we can share the experience among Latvian partners. Thirdly, project gives significant amount of attention to on-the-job training in partnering Ilze Krieviņa Ventspils High Technology Park organisations as well as to involvement of stakeholders of the field into discussions, work meetings and presentations of results. In your opinion, how will the project help to develop further cooperation between Latvia and Estonia? V.A.: There has a strong collaboration between Kurzeme, Riga Planning and South -Estonia regions developed and each of the involved partners will benefit from this cooperation, which to my mind is very successful, as being formed into many levels between universities, incubators, pre-incubators, governments, region administrations, entrepreneurs, research organizations, venture capitalists, business angels, namely, active people, whose mission is to create brave ideas. Valdis Avotiņš, SIB Net Project Manager, Riga Planning Region
Article by Alise Brice Special thanks to Rene Tõnnisson, Institute of Baltic Studies, Estonia MOBILITY for IDEAS The idea of mobility activity of the SIB Net Project is to help partners and partnering regions to engage in mutual learning and benchmarking. This is done by providing opportunities for transferring knowledge and exchanging experiences. Greater mobility between partner organizations and regions will help to define challenges that are similar in partner regions in the field of developing and supporting innovative ideas and start-ups as well as to define areas for future cooperation, including joint projects between partnering regions. The SIB Net project has a particular goal of creating an effective knowledge transfer platform between Latvia and Estonia. Essential part of this platform is implementing a mobility scheme, which includes study visits to partner regions, expert and staff exchanges as well as seminars and training. Ventspils University College, Stockholm School of Economics in Riga and Tartu Science Park are mutual partners in connection with mobility activities. Aigars Timofejevs, Project Manager, Stockholm School of Economics in Riga The benefits of the mobility activity would be the possibility for all partners to improve and make the work that is oriented towards development of different support activities for innovators, who are ready to implement their ideas into business, more efficient in terms of time and money spent. Valdis Avotiņš, Project Manager of the SIB Net: The key to successful cooperation is shared vision, confidence, readiness and trust into defined aims, whereas the essence of the activity is partners experience, interest and willingness to gain external expertise. Success will be reached if both things match. Look for the first results of the mobility activity in the next issue of SIB Net Newsletter!
New service: Pre-incubation Ventspils and Tartu create two pre-incubators Article by Ilze Krieviņa The idea of the pre-incubation stage is to support entrepreneurs transforming their ideas into legally constituted companies preferably with marketable finished products. The main contribution from the pre-incubation process is that it guarantees that companies entering the incubation process are ready to be developed. Typically, pre-incubation involves business counselling to help the incubator understand the idea and its potential, and possibly some training to develop basic business skills and requirements. It can also involve preparation of a business plan, refinement of the product or service to a 'market ready' stage, and help for the entrepreneur with the formalities of establishing a new company. These three activities are often pre-requisites for entering an incubator and benefiting from the business building help provided. Tiit Urva, Tartu Science Park: I believe that things that are valuated the most by new entrepreneurs that join the pre-incubator are networking and links with other entrepreneurs and consultants, flexible infrastructure as well as trainings and seminars on specific topics - planning, financing, marketing, etc. Source: www.idisc.net pre-incubation is crucial to every young entrepreneur. Preincubator helps to understand vital capacity of the business idea. I believe everybody should seize such opportunity Gvido Grīnbergs Client of VHTP Pre-incubator in Ventspils Together with his friend and partner, fellow-student from Ventspils University College, develops idea in the field of composite materials. To my mind, pre-incubation is crucial to every young entrepreneur. Preincubator helps to understand vital capacity of the business idea. I believe everybody should seize such opportunity. Biggest benefit is that everything is free of charge office premises, equipment, and consultations. What can be more important for a young entrepreneur if not the possibility to cut costs? Other true benefit is that there is a certain expert who deals with issues of pre-incubation process of the company, who is open and available almost always and who answers all our questions.
BUSINESS ANGELS NETWORK TO BE OR NOT TO BE Q&A Sven Illing, Director of Development of Tartu Science Park, answers questions on need of a Business Angels Network (BAN) Interview by Ilze Krieviņa What can you tell about Business Angels Networks in Europe and in Estonia? BANs are most developed in the U.S. American business angels invested 19 billion dollars in 2008. In Europe in 2009 there were 334 business angels networks in Europe representing about 75 000 business angels who made 3-5 billion EUR investments. There is no formalised business angel network in Estonia. In my view, in the future there has to be separate Estonian BAN that could be a member of The European Trade Association for Business Angels, Seed Funds, and other Early Stage Market Player (EBAN). Business angels interests are quite different from large private equity funds. How could such organisation stimulate development and growth of new businesses? In my opinion BANs are important for two reasons. Firstly, they reduce the funding gap in the early stage of start-ups, and secondly, BANs match start-ups with business experience & contacts. BANs educate high net-worth individuals how to make investments into businesses, help to analyse & evaluate business plans and enable to share risks (2-3 business angels investing together). Without BANs well-off person might not dare to invest alone. Angel Capital Association (US): In addition to financial capital, top angels mentor and coach their portfolio companies, often leading to more healthy growth. They introduce entrepreneurs to potential customers and investors, see around potential problem areas, and help the start-up firms gain credibility in their fields. Do you believe that new entrepreneurs lack knowledge of possibilities to attract seed financing? I believe in Baltic States it is quite hard to find wealthy persons who could be interested in investing into a technology start-up. There are no networks, no culture of investing in high-tech, no or very few real success-stories. How many business angels do I know myself who have invested successfully? Actually, none. Skype is not the success story of Estonian business angels. A founder of a start-up may know some high net-worth individuals but would they be really interested in investing at all? A young entrepreneur hardly knows whom to approach. It would be a lot easier if business angels gathered in networks. Secondly, start-ups don t know how to pitch. They don t know how to present convincingly, how to make their project attractive for an investor. As a regular coach at Seed Forum pitch-trainings I have had an opportunity to witness major improvements after entrepreneur has structured his/her ideas for investor presentation format and practiced a few times. A study of businesses in Tartu found out that the biggest problem for entrepreneurs was lack of funding. It is also my experience that according to number of companies it is difficult for start-ups to get access to capital in general, also from banks. What could be the role of business incubators if such joint Business Angels Network existed in Mid-West Latvia and South Estonia? Business incubators could help to run BANs organise events together with BANs, find dealflow for BANs and prepare start-ups for meetings with investors. Business incubator could also help to some extent in analysis and evaluation of business ideas but BAN should have their own analysis capability. Investors are responsible for their decisions.
Article by Sandra Rožkalne Success Stories. Latvia. Advaita Team Ltd. was established in 2009 in Riga by Yoga teachers, professional designers and business people who practice Yoga daily. Yoga specialists and designers work closely in order to produce equipment that combines ancient wisdom with modern technologies, thus creating superb quality products and comfortable yoga/fitness clothing. Company Pantio Ltd. was founded in 2009 in Ventspils, and it grounds on principles of innovative environment-friendly practices. The company values responsible attitude towards nature and people who care about it. The specialization of the company is production of Pantio boxes. The product is intended for the greenery of cities, commercial areas, parks, backyard gardens and balconies, as well as for greenery at cemeteries. It is a high quality product of practical and contemporary design. In the early development phase the company was funded by its shareholders. In the future the management of Advaita Team Ltd. plans to attract investors in order to faster the development in markets that are already familiar with the production of Advaita Team Ltd., as well as achieve new markets. Mission of the Pantio is to embellish the urban environment, and to facilitate the cultivation of plants for companies and people, enabling them to enjoy the beauty of nature. Advaita Team Ltd. goes step by step towards the goal entering the international market, which is possible due to the input in product development, marketing and promotion of collaboration with foreign partners. The brand of Advaita Team Ltd. is becoming more and more recognizable internationally. Formula of success: Raivo Kreicbergs, Marketing Director of Advaita Team Ltd.: Success depends on various factors finances, idea, courage to take a risk, personnel, energy and believe in success. In the start-up stage Pantio Ltd. was founded by its mother company s Darza Guru Ltd. revenues and savings. Since October of 2009 Pantio Ltd. operates in the business incubator of Ventspils High Technology Park, thereby receiving financial and advisory support. Currently Pantio Ltd. is negotiating with business angels in order to attract private capital to faster the development of the company. Formula of success: Arnis Spurdziņš, Chairman of the Board of Pantio Ltd.: Every case has its own formula of success. The essential component is a dream (an idea) and fearlessness of living the life as intended.
Innovative business ideas wanted Article by Sandra Rožkalne During the implementation of SIB Net Project a Cross-border business idea contest will be organised, the ultimate aim of which is to develop at least 50 business plans. Uniqueness of the Idea Competition: SIB Net Idea Contest will focus on the scientific value of the idea. Evaluation criteria will include such factors as scientific validity, innovativeness, profitability and sustainability. However, the competition will be open for both, scientists and non-scientists. Business idea holders will also attend creativity seminars, aim of which is by encouraging entrepreneurial creativity to generate new business ideas out of nascent identified market opportunities. Creativity seminars will help idea holders to improve and develop their ideas into the real business plans. For the SIB Net Project in general, the creativity seminars will be the first step in the process of promoting new innovative high growth businesses. Aivars Timofejevs, Project Manager, Stockholm School of Economics in Riga: The aim of the Idea Contest is to verify if scientific validity and/or the involvement of the scientist in the development of the idea has a positive correlation with the growth and sustainability of the company. The two activities that will follow creativity seminars are master classes for idea holders as well as two investor forums in Riga and in Tartu. Master classes will prepare the idea holders for meeting with investors. They will teach how the business idea should be presented to a business angel and/or investor. Investor forums in Tartu and Riga will be an effective matching mechanism for investors and idea holders. To apply please visit: www.sibnetwork.eu
You are welcome to contact us! Riga Planning Region Ventspils High Technology Park Liesma Grīnberga Ilze Krieviņa SIB Net Project Coordinator SIB Net Project Coordinator Ph.: +371 67559823 Ph.: +371 26180733 E-mail: liesma.grinberga@rpr.gov.lv E-mail: ilze.krievina@vatp.lv Skype: liesmagr Skype: ilze.krievina www.rpr.gov.lv www.vatp.lv www.sibnetwork.eu