Lower Saxony provides venture capital for technology orientated start-ups in the region.
Lower Saxony wants to develop its territory by enhancing the entrepreneurship especially technology orientated start-ups. This enhancement is made through the offer of a special investment fund.
The fund is addressed to founders, start-ups and young companies in Lower Saxony (younger than 2 years) and does not focus on special branches. The engagement should strengthen und sustain the equity capital base. Both open and silent partnerships are possible.
The fund supports growth-triggered cash requirements, investments in fixed and current assets and the realisation of innovative and technological ideas.
For a silent partnership NBank participates financially by her Capital Investment Company Lower Saxony as silent partner, without direct influence on the management, but with business development analysis by a periodic reporting of the management.
The engagement is in a range from 100.000 to 300.000 Euro, the annual fee depends on the current market situation and the credit standing.
For open partnerships NBank participates direct by her Capital Investment Company Lower Saxony to the capital of the company. It is always a minority shareholding with a minimum time horizon of seven years.
It is important that the applying persons have a special and professional qualification and a coherent business plan that documents the feasibility and marketability of the product and/or the service.

Resources needed

• 4.000.000 Euro for the fund (except staff costs)
• -0,5 VC manager in charge of the Capital Investment Company Lower Saxony
• informal business network of Lower Saxony

Evidence of success

Our parameters are:
• the success of the engagements (business survival rate)
• Flowbacks to the fund /returns on the investments
• successful exits
• congruency of offered conditions and requested conditions
• confirmation of a comprehensible and sustainable selection process

Potential for learning or transfer

With NSeed parts of an existing fund are reserved for higher risk levels as they are in early company stages. The supply could be adjusted to market demand. The engagement could be combined with capital of other providers and programmes.
Other regions with existing growth orientated funds can transfer the process of budget allocation, market demand and risk expansion of the fund to a specific policy driven focus. Cooperation with other VCs or BA is possible.

Please login to see the expert opinion of this good practice.

Main institution
State Development Bank of Lower Saxony
Location
Hannover, Germany (Deutschland)
Start Date
April 2017
End Date
Ongoing

Contact

Please login to contact the author.

Good Practices being followed by

Angelina Todorova

Fund Manager of Financial Instruments in Bulgaria