Call INNOV-ID - Early stage VC investment
About this good practice
There is a gap in the Business Angels and Venture Capital sector in the financing of scientific and technological based spinoffs and new ventures, especially in TRLs from 5 to 8. Call INNO-ID is focused on projects or startups in pre-seed, seed or early stage with a developed technology, that are still in the prototype, proof of concept, MVP or product-market fit validation stage.
Through the venture capital investment of €100.001 (€1 in a share/quote and €100.000 in a convertible note) in the capital of the new startups, Call INNOV-ID finances the development of the company up to the seed round. These investments aim to finance companies that are starting out, so that they have the runway to reach more developed stages that enable them to raise additional rounds of capital.
The main stakeholders and beneficiaries of the Call INNOV-ID are the Founders, Startups, Universities, Scientific and Technological Institutions, Incubators and Accelerators, Co-investors and Corporates looking for innovative technologies.
Resources needed
Portugal Ventures intends to invest €5M per year in 20 spinoffs and early stage startups (2M€ - 100k€ ticket; and €3M in Follow-on investments) in the companies invested in the 1st, 2nd, 3rd and 4th edition of the Call. Implementing this strategy requires a dedicated and experienced team of 5 FTEs.
Evidence of success
On the first 4 Calls launched from May, 2021 to November, 2023, Portugal Ventures received 398 Submissions and has invested in 76 startups. The success of this initiative is measured by the following: 60% of the invested startups have raised or are raising a new capital round and the survival rate is 81%.
Potential for learning or transfer
Investing in early-stage startups is essential to address the widening gap in financing across the European entrepreneurial landscape. The proven success of Portugal's Venture capital framework, Call INNOV-ID initiated in 2020, underscores the potential benefits for other regions to adopt similar practices. Key to this success is the creation of supportive networks, such as Ignition Partners Network and Ignition Capital Network. These networks, comprising universities, research institutions, accelerators, and investors, serve as crucial catalysts, guiding projects from inception to investment stages. By offering vital mentorship, facilitating strategic project selection, and fostering co-investment opportunities, these networks expedite processes and amplify growth trajectories. Thus, replicating such collaborative models holds promise for bolstering the resilience and dynamism and for fostering innovation in other entrepreneurial ecosystems.
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