2008

1. Polska Konfederacja Pracodawców Prywatnych Lewiatan Lewiatan’s projects financed by EU… …and what we have learnt from them 2008

2. Our strategy 2004-2006 • Build new competence: EU fund raising and project management • Prepare and practice procedures • Develop new services for our members • Lead awareness raising campaigns • Enhance and develop our expertise (as employer organization) We’ve started relatively low. From 2005 to 2008 we’ve been working on 7 different project amounted to 1,5 mln Euro. Average project budget was 220 000 Euro

3. Profits • We tried different funds: ERDF, ESF, EQUAL and different rules • We worked with different institutions • We build in-house expertise • We could support our public activities with own (sometimes painful) experience (we tested everything on ourselves so we were able to understand better entrepreneurs’ problems)

4. Conclusions The only think you should not believe in is that the EU money is easy Sometimes, however, it is easier to get it then spend (in a right way) With EU funded projects you must learn to be patient and fight for yours (and entrepreneurs in general) rights

5. Types of projects • Services • Lewiatan Business Angels • Private Sector Liaison Officer to the World Bank • Arbitrage Court • InCas • Entrepreneurs Ombudsman • Awareness Raising and information • Gender Index • CSR trainings

6. Lewiatan Business Angels • We got ERDF support for: • Team • Office • Information and Promotion (meetings, conferences brochures, internet campaign) • Internet tool www.lba.pl • Evaluation of business plan and creation of LBA network (investors, entrepreneurs, people ready to share their knowledge)

7. Lewiatan Business Angels – who might be interested • People interested in investing their money in early stage companies with high growth potential. Such ventures involve a great  deal of risk and they are not good for everyone • Young entrepreneurs (but also students, academics, etc.) who seek for capital and wish to present their business either for professional evaluation • Professionals with right and complementary competences willing to get involved in building a startup company (database of CV available for every registered user.

8. WHO IS AN ANGEL INVESTOR? Business Angels: • Wealthy individuals • Good business experience • Good contacts and marketing skills • Very often cashed out entrepreneurs or managers • Actively supporting development of the company Angel investors are interested in startup and early stage companies, which require an investment of 200 thousand to 5 million PLN. It is also possible to finance ventures at the seed stage if they have exceptionally high growth potential.

9. Growth Capital needs IPO High risk Venture Capital Funds Business Angels Low risk Friends, family and fools Time Seed Early stage Expansion START-UP BUSINESS ANGELS ON THE RISK CAPITAL MARKET

10. LBA KEY DATA • A group of ca. 50 individual investors associated with LBA, interested in early-stage companies with extraordinary growth prospects, no sector specialization • Typical investment – between EUR 50k and EUR 1.5m • Services provided to investors: • provision of carefully selected business plans, according to individual preferences and investment criteria • Services provided to entrepreneurs: • access to selected group of active investors • Cooperation with Business Angel Seedfund

11. STRATEGY LBA has established an extensive angel network in Poland and between 2005 and 2006 finalized 7 investments in different sectors/branches. 350 Ideas screened 2% of business plans submitted get financing Many of the projects submitted to investors came from LBA’s partners Negotiation process is less formal than with VCs, but also less predictable Ideas refined in Meetings 45 Ideas submitted to the Investors 25 Number of Investments 7

12. COOPERATION WITH BA – BENEFITS • Benefits for entrepreneurs seeking financing from business angels: • Provision of adequate financing, flexible terms • Experience and strategic know-how • Business contacts and relations within industry

13. PROJECT SELECTION CRITERIA • Experience and competences of the management team • Strong growth potential • Growing market or attractive niche • Competitive advantage • Founders involvement and commitment (also financial) • Stage of company development (preferred existing businesses) • Identified and clear exit options • Business plan and financial projections – coherent and well thought

14. LEWIATAN BUSINESS ANGELS– TRACK RECORD

15. Private Sector Liason Officer to the World Bank • We got ERDF support for: • Team • Office • Information and Promotion (meetings, conferences brochures, internet campaign) • Internet tool www.pslo.pl

16. Private Sector Liason Officer to the World Bank • The Private Sector Liaison Officers (PSLO) network is a network of business intermediary organizations such as chambers of commerce and industry, business or trade associations or investment promotion agencies working together to foster trade and investments between countries with the support of the World Bank Group products and services • 37 PSLOs are currently operating in 30 countries • PSLO is trained by WGB to deliver services of highest quality

17. Private Sector Liason Officer to the World Bank - tasks • To disseminate information about WBG business opportunities (procurement, IFC, MIGA, trust funds), • To facilitate contacts between local companies and the Bank Group, • To organize consultations on development issues of interest to the private sector (investment climate, Public Private Partnerships, carbon funds, etc.) • To provide information on the Bank’s knowledge resources and partnership opportunities • To advise the WBG on how to better engage companies on development issues. • To inform (translate and explain) procurement offers • To support enterprises wishing to apply for a WGB contract

18. Private Sector Liason Officer to the World Bank - activities • Information dissemination on WBG and its business opportunities, • Consultations for WBG staff on development issues of common interest to the private sector, • Procurement seminars and conferences, • Investment forums on specific countries, regions or topics, • Business delegations to Washington D.C. and to developing countries.

19. Private Sector Liason Officer to the World Bank - benefits • PSLO host organizations get visibility from being associated with the WBG. • PSLOs undergo training twice a year to remain current on the WBG’s policies and activities, exchange ideas, and benefit from networking opportunities.  • PSLOs are provided with WBG speakers for their events. • The WBG team collaborates very closely with the PSLOs, and provides them with communications material (brochure, website, etc), access to sources of information, and key contacts.

20. Gender Index – why we support women’s position at the labour market? • Reported difficulties in finding an employee • Very low participation at the labour market • Difficult access to higher management positions, • Wages lower comparing to their male counterparts, • Rarely promoted • Reluctantly employed due to family duties Wasted potential!

21. Gender Index – goals Activities aimed at an improvement in women’s labour market status that are primarily targeted at employers Cooperation with other partners (UNDP, Warsaw School of Economics, Ministry of Employment within EQUAL Initiative • to establish Gender Index; • to increase employers’ awareness of women discrimination issues; • to enhance employers’ knowledge and skills associated with support to and promotion of women at work; • to improve public awareness of women discrimination at work.

22. a precision analytical tool designed by a group of academic experts, • for analyzing and monitoring the situation of women at work, • that makes it possible to provide a real and unbiased diagnosis of employer’s policy in terms of compliance with the principles of equal opportunities and. • allows for benchmarking of enterprises Gender Index – why this name?

23. Gender Index – was it worth doing it? • We organized first Polish conference on diversity management and talked not about ideology but costs and benefits • We organized two editions of the contest for the business which is ”most friendly to female workers” • We surveyed about 200 companies with Gender Index in the framework of contest • We identify good corporate practice of support to female workers • and develop of a handbook of equal opportunities at work. • We establish a training module on diversity management designed specifically for employers • We organized series of trainings for employment

24. Gender Index- was it REALLY worth doing it? • Surprisingly wide media coverage • Great interest among companies that: • look for new ways to attract talented people • want to know better weaknesses related to HR management • Improvement of organization’s image

25. Check if your project qualify for support Entrepreneurs can finance only ‘initial investments’ which means the investment in material and immaterial assets (licenses, patents, software) relating to the setting-up of a: • new establishment • the extension of an existing establishment • diversification of the output of an establishment into new additional products • or a fundamental change in the overall production process of an existing establishment In Poland if investment begun before delivering application (for example ANY advance payment was made – application was rejected

26. Consider first: Are you able to maintain investment! • EU demands maintenance of the investment in question in the region concerned for a minimum period of at least five years after its completion • In addition, where the aid is calculated on the basis of wage costs, the posts must be filled within three years of the completion of the works. Each of the jobs created through the investment must be maintained within the region concerned for a period of five years from the date the post was first filled. • In the case of SME Member States may reduce these five-year periods for the maintenance of an investment or jobs created to a minimum of three years.

27. Consider first: Are you able to maintain investment! • EU underlines that „maintenance condition” shall not prevent the replacement of plant or equipment which has become out-dated within the period referred to (5 or 3 years) due to rapid technological change, provided the economic activity is retained in the region concerned for the minimum period. • Ask for precise interpretation and definition of exceptions • Remember that if equipment paid with EU money need replacement, you are obliged to pay for it. • Remember that if you lay off a person whose salary is paid with EU money, you are obliged to replace him or her

28. Consider first: Are you able to co-finance investment and prove it • the beneficiary must provide a financial contribution of at least 25 % of the eligible costs, either through its own resources or by external financing, in a form which is free of any public support • In Poland, entrepreneur must present direct evidence that he has an access to 100% financial resources (e.g promise of a bank credit)

29. Consider first: Are you able to finance the whole investement untill institution responsible refund incurred costs • In Poland, entrepreneurs waited up to 18 months for refundation • Statement of expenditures were corrected several times before final acceptance • Each financial document was checked extremely carefully (some were returned because of wrong spelling!)

30. Consider first: Are you able to achieve everything you plan • Choose realistic, countable results. This is a first thing verified during every control • Think first how you can prove that results have been achieved. It’s better to be less ambitious but sure of feasibility • If you achieve less then planned, you might be asked to return relevant part of grant (or you get less money) • If you are not able to achieve what you plan, prepare really good explanation

31. Read carefully an agreement • Know your duties AND RIGHTS • Special attention: • Public procurement rules, if applicable • Obligation to communicate to he public the contribution the Funds have made to the project: strict rules easily verified (logo, plaque, etc) • Personal data protection • Fixed terms (for example to propose modification or present reports) • Maintenance of either a separate accounting system or an adequate accounting code for all transactions relating to the operation

32. Inform about EU assitance • Check what your obligations on promotion and information are In Poland each of 7 Programs has its own logo. In worst case we had to put EU logo, ESF logo, Program logo and relevant institution logo (except for our own), in a right order, on every single paper published in the framework of project • Remember to put right information on every item bought with EU money and also on every paper published that is paid with EU money – this is really first and thing to be checked!

33. Do not be afraid to admit you have problems • If you have any problem while implementing project, it is better to inform relevant institution • You can always negotiate an agreement In our most difficult project we amended the initial agreement 4 times! We were forced to limit the scope of actions twice if compared to what was planned at the beginning.

34. Be ready for different types of controls • Verifications on-the-spot • Institutional audits carried out on operations on the basis of a sample to verify expenditure declared • EC controls (especially in the period of obligatory maintenance of the project) • Tax services controls One of PKPP Lewiatan projects was controlled 4 times. First time, few months before it was closed, last time year and a half after we finished it.

35. Gather all documents relating to the project • Good archive is first condition to successfully go through any control • Collect everything, not only financial documents (photos, lists of participants from meetings, agendas, press articles) • If you take important decision, try to prepare a short note explaining it (after few years you might not remember all circumstances)

36. Thank you for your attention Marzena Chmielewska