Sánchez-Ocaña Alejandro Suárez. TIME-sector employer since 1998 CEO of the Group Publispain, the network of blogs Entertainment Networks SL and Leisure Blogs, Chairman of Inversora Foley, Director and Founding Partner of Yes.fm, advisor and investor in several companies in innovation, new technologies and internet.
Little capital, no risk
He had still to be published a week ago (2 weeks I've been very mad, and I could not catch up) this platform has been published on 14 February in the Mercantil Valenciano. I think it reflects my opinion on the Risk Capital in Spain, but the eye in a very similar is the issue of private investors.
You can download it in pdf from here
Little capital, no risk
The possibilities of raising funds that are presented to entrepreneurs and black. Last 2009 ended with a de facto closure of bank financing, except for well established risk profiles. We were aware of the virtual absence of private investment and have the perception that venture capital, which in this scenario could pull the gray car, or is or was pending.
That was a widespread perception that is now endorsed by ASCRI data, the Spanish Association of Venture Capital, which certify that l sector investment in 2009 has been reduced dramatically by 47% to EUR 1,600 million , which takes us back to a scene of 2003-2004. That is, we have regressed over five years.
We all know that venture capital, well used, is an effective tool that companies can be strengthened in its launching or at certain times of hardship. The job creation in the affiliated companies of venture capital, apart from the importance of its social value is carried out at a rate of 15%. This percentage is well above the growth rate of non-funded enterprises, usually no more than 5%, and is something that takes into account our European neighbors, legislating and support for progress.
But not only help create jobs, promote employment of quality. The company's future viability is also reflected by their origin: those where venture capital provides funding show a mortality of around 4%, while 60% of companies not included does not survive for three years after his birth. This is another point to consider to facilitate the work of these entities and assist them in their needs.
However, venture capital is moving away from Spanish firms, has been closed to many sectors of our economy, though fortunately not all. You can only give thanks if our investment projects are in the consumer products sector, which received 19.4% of the amount invested throughout 2009, or medicine and health, with 15.3%. So companies of products and services or biotechnology companies and genetic engineering would be the only areas where the venture capital financial institutions, in theory, we could help start, expand or strengthen our company.
But this fall in activity of venture capital funds not only happens in the Spanish market. In countries like the United States the decline has been higher at around 60%. That yes, based on figures from business light years ahead of our country.
For years, many have argued that in Spain the venture capital funds had little presence and acted like banks: fund simply, usually without risk and play safe. However, in an environment like today is important to have a tool such as venture capital, which has clearly demonstrated its utility to support and develop businesses in both recessionary and expansionary phases of the cycle.
Now we can simply say that the industry has disappeared and is key to retrieve that economic activity should revive the real green shoots that will allow new projects, entrepreneurs and businesses get ahead and provide what society needs most right now: new employment opportunities.
Concerned take a look at the forecasts that we work for the first half of 2010, which are not bleak. It is estimated that the sector is unlikely to be recovered during this year and is likely to barely register a slight increase in activity compared to the year 2009. There is no sign of recovering those five years we have lost in the blink of an eye .
Bank credit, the full activity of venture capital and the desired ad hoc legislation to regulate and promote business angel activity in Spain will be key factors that determine our future development, labor and business.
The recovery is in our hands, but it is imperative that all players in the financial world to step forward and open dancing.
Tags: Business Angels, Venture Capital, Business, Investment, technology investments, private investors, venture capital
One Response to "From little capital, no risk"
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Wonderful post. Permiteme few points:
- Venture capital is procyclical and unfortunately not countercyclical marked feature in this country: The big end-investors have money available when things go well and many private equity managers are behaving like mad consumerist with a new credit card in a mall (pardon the sexist comment). I do not care and the price that the important thing is to buy and spend it all now.
- All investors end they'll say that since then it has been assumed that investment risk in recent years. Just see the portfolios of the funds at this time. It has been an unreasonable risk.
- In my view the situation in many sectors is criticized for the lack of bank financing, the massive leverage of firms and the lack of sufficient investment. Not enough risk capital financing and the public sector.
- We need a change of legislation as good indicators, although the key is to restore all the possible savings to productive activities. In this regard it makes sense to eliminate all charges on capital gains reinvested in companies that create jobs regardless of who the taxpayer and those obtained from such investments. That is, total exemption for reinvestment in companies that create jobs and tax zero rate on their capital gains for all. Means less tax revenue in the very short term but bread for tomorrow.