Portuguese SME and Innovation Agency: Driving SME Financing and Intellectual Property Readiness

1. FIFTH ANNUAL WIPO FORUM ON INTELLECTUAL PROPERTY AND SME Intellectual Capital Readiness Outreach and Support Programs on Intellectual property Financing INNOVATION ON SME FINANCING The experience of the Portuguese SME and Innovation Agency (IAPMEI) Jaime Andrez Chairman of the Board of Directors of IAPMEI Geneva, 13-14 September 2007

2. IAPMEI Portuguese Agency for SME • Government Agency whose mission is to support economic policies oriented to micro, small and mid-sized companies • Services provided to companies by IAPMEI are divided into the following major categories: • Innovation and business environment • Grants for investment; • Technical Assistance; and • Access to finance for SME’s.

3. Provides guarantees to reduce the exposure of mutual guarantee societies State State Public Instruments for Risk Sharing Credit Securitisation Guarantee Fund Mutual Counter- Guarantee Fund Venture Capital Syndication Fund Provides co-investment and other risk-sharing features to the venture capital and private equity industry Provides guarantees to credit enhance the cash-conversion of bank loans through securitisation

4. INOFINFinancial Innovation Framework Main Objectives: To promote efficiency in banking intermediation to stimulate the enlargement of capital markets To adjust existing instruments to the specific profiles of SME needs along their life cycle

5. INOFINRisk Sharing with Market Players Bank Intermediation Loan Securitisation Mutual Guarantee Banks SAVINGS SME Venture Capital Origination Platforms Equity Markets Equity Chain Hands - - off Hands - - on Proximity Immaterial Capilarity Scale

6. The Rational: Incomplete Nature of the Financial Markets Supply (Operators) Demand (SME) Segments of limited attractiveness for financial operators Insufficient coverage for certain segments MIS-MATCH Determined by Determined by • Environment • Regulatory issues • Regulation • Taxation • Contracting and Law • Transaction Costs • Scale of Operations • Geographical Dispersion • Appraisal / Evaluation • Risk-Reward Patterns • Asymmetric Information • Risk Perception • Risk Profile of operators • Liquidity • Nature of assets • Secondary / Exit Markets • Business Profile • Stage position in “life curve” • Level of specialization • Critical size • Available Resources • Human Capital • Financial Structure • Entrepreneurial Culture • Entrepreneurial spirit • Market culture • Management Skills • Management Teams • Organization • Information Systems MIS-MATCH Financial Markets - Financial Gap - Demand and Supply Constraints There’s a role for State under certain circumstances

7. INOFIN - Programs along the business life cycle Companies life cycle time FINICIA FINTRANS FINCRESCE

8. HIGH INNOVATION PROJECTS MICRO BUSINESS START-UPS REGIONAL BUSINESS INITIATIVES FINICIA ProgrammeFinancing SME Early Stages Facilitating access to finance for Entrepreneurs and Small Companies at the initial phases of their life cycle

9. Upgrading on Risk Profile Promote Market Reputation Customized Financial Products and Services FINCRESCE ProgrammeFinancing SME Growth Strategies Optimizing company financing conditions necessary to promote growth strategies and strengthen their competitiveness

10. Company Restructuring Mergers and Acquisitions Management Capacity MBO-MBI FINTRANS ProgrammeFinancing Equity Transmission and M&A Encouraging founders succession and/or transfer of assets into new value chains, thus inducing regeneration of the Economy

11. FINICIA Platforms“Eco-systems” for Start-Ups Venture Capital Syndication Fund Risk Sharing VC Companies Local Network Corporate Ventures Business Angels Research Institutes SME Incubators Business Chambers Development Agencies Universities Procurement Approach Business Follow Up Investment Forum Project Evaluation

12. FINICIA Figures Fund Raising 10 million – New venture capital fund 97 million Euros 75 million – New credit lines (for start ups) 12 million – New mezzanine regional funds New Companies, Investment and Job Creation 111 new companies – 10% of highly innovative projects 17 million euros of total investment 381 new jobs Favourable Environment Creation of 13 FINICIA Platforms near universities, with 85 partners Creation of KIT FINICIA with standard documents such as shareholders’ agreements and companies bylaws

13. INOFIN is a contribution to ending the waste of ideas and entrepreneurs in Portugal.

14. INVITATION TO WPSMEE DELEGATESFORTHCOMING EVENTS IN PORTUGAL OCTOBER 8th – 9th 2007 EUROPEAN UNION PRESIDENCY FORUM ON FINANCING INNOVATION BEST PRACTICES – From Ideas to Market EUROPEAN COMMISSION + IAPMEI OCTOBER 10th 2007 MUTUAL GUARANTEE INTERNATIONAL SUMMIT EUROPEAN ASSOCIATION (AECM) + SPGM + IAPMEI DECEMBER 6th 2007 CONFERENCE ON SME’s EUROPEAN COMMISSION + IAPMEI + DGE (Ministerial Dept.) JANUARY 2008 (DATE TO BE DEFINED) CONFERENCE ON INTERNACIONALIZATION OF SMEs OEDC-OCDE + IAPMEI + AICEP (Investment & Exports Agency) YOU ARE WELLCOME and THANK YOU FOR YOUR ATTENTION!