| AIFI throws its support behind the EASY Project |
 At the recent EASY Investment Forum in Milan, the Italian private equity and venture capital association, AIFI publicly threw its support behind the EASY Project. We spoke to Carlo Ferrario, President of AIFI’s Venture Capital Commission, about why AIFI is so supportive of this initiative.Mr Ferrario has clearly thought hard about why the EASY Project is such an important initiative. He firmly believes that its ability to bring together early stage venture capital investors with business angels is a key part of creating a market where appropriate funding can be accessed by companies at each stage of their development. Within the general mix of funding there has to be grants for universities and money from government for seed projects, followed by angel money for start-ups and really early stage businesses, followed by larger rounds of investment for entrepreneurial companies from venture capitalists. However, it is the connection between angels and venture capitalists which is the key part of the chain. AIFI was very pleased with the Milan event because of what it did to help improve this connection and also because of the quality of companies that came to the event. Mr Ferrario was on the panel of judges who selected the companies that presented. He told us that the opportunities were of a very high standard with many of them meeting his key criteria. These included having a scalable and sustainable model in an international business arena; a business that will make a significant economic impact on, if not a technological breakthrough in its market; and a strong management team. Mr Ferrario felt that one of the big pluses of the EASY Project was that the EASY Partners could work with the businesses prior to their pitch, especially on getting a team that is balanced in terms of technology and management experience. Another benefit of the EASY Project is that it is creating an EU wide standard for evaluating business opportunities. Italian angels are changing as a breed, according to Mr Ferrario. Historically they were mainly retired successful entrepreneurs who wanted to get personally involved in a new opportunity. Today there are a large number who are more disciplined and organized about making investments, especially in the area of due diligence. There are more syndicates and the angels are using this approach to provide higher levels of mentoring and other support for management post investment. Mr Ferrario was equally impressed with the angels from other countries who attended the Milan meeting. He said “We have seen in this meeting tremendous success, with almost 200 investors attending the meeting and a total of 36 companies presenting their projects. Now we all have to help move the investors’ interest on into actual investment. The way that EASY has been organized is as a good way to achieve this as the Partners can support the follow-up process. I have been an angel investor myself and also have experience advising funds and government on VC investment. I think the investors should group into gangs of angels in an organized way, and through resources offered by the EASY Project work together to do proper due diligence on the opportunities they have seen present.” The Italian venture investment market is thriving at the moment with quality deal flow rising considerably over the last two years. This deal flow is coming out of research centres and universities with a particular focus on sectors where Italy has expertise such as biotechnology, ICT and new materials. At the early stage (seed to start-ups) between 700 and 800 deals have been closed, this compares with only 60 deals in later stage companies. As these early stage deals grow, the AIFI expects to see a resultant rise in numbers of later stage investments in the future. Managers of later stage funds are already watching the early stage market closely for new investment opportunities. The VCs are also paying great attention to the backers of early stage businesses. They understand that they need to build relationships with angels and the public sector, which back these deals when they are too risky for themselves. “In Italy we have an investment market and high levels of deal flow at the early stage. As angels and VCs build relationships, many of these companies will then be backed VCs. The EASY Project has shown me that we now have the chance to ensure that everyone, angels, VCs and the entrepreneurs can get a good return from co-operating. EASY has shown me that geographic boundaries are going to become increasingly irrelevant for investors, if this connectivity exists and the business is potentially going to be global,” said Mr Ferrario. |