1. What is Venture Capital?
Venture Capital is a term used internationally to
denote long-term capital investments in existing companies
or companies under establishment by specialized investment
companies and by private individuals which entail
a certain degree of risk. More specifically, venture
capitalists offer capital in return for participation
in the company's share capital. At the same time they
may also support portfolio companies on technology,
organizational, commercial and financing issues.
2. What is the difference
from bank lending?
In Venture Capital, the investor participates in
the risk along with the entrepreneur and there are
usually no guarantees or security. The venture capital
company seeks to obtain profits either in the form
of dividends or (more usually) long-term return on
capital in the form of increase in company value /
share price leading to profits, realized through sale
of the investor/s stake.
3. Where do venture
capital funds invest?
Venture capital can be used in companies in the initial
set-up stages (seed capital) right up to the fully-developed
stage (growth stage). Established companies seeking
to expand or modernize may also seek venture capital;
this type of VC financing is known as development
4. How do venture
capital funds invest?
A venture capital company does not normally purchase
shares from existing shareholders. It takes a stake
in portfolio companies through a share capital increase.
Share capital participation may take a number of forms.
Main instruments used by venture capitalists are ordinary
shares; preferred shares with (or usually without)
voting rights; preferred shares convertible to ordinary
shares at rates dependent upon achievement of predetermined
milestones (e.g. sales targets); preferred or ordinary
shares to be acquired within a specific time period
at a predetermined price from other shareholders;
preferred shares with entitlement to a fixed dividend
and participation in the profits; preferred shares
with a fixed dividend (interest) even if there are
no profits; a loan convertible to stocks or an ordinary
loan combined with participation in the share capital.
5. What contribution
do venture capital companies make?
A venture capital firm can offer to a portfolio company
a range of services on an as-needed basis:
1) Assessment of the investment idea, the investment
plan and the business strategy in general.
2) Assessment of company management
3) Advice on capital structure and business financing
4) Advice on company strategy, development and growth
5) Preparation for listing on an exchange.
6. How long does a
venture capital investment last?
A venture capital firm does not intend to retain
a long-term stake in its portfolio companies. A typically
investment horizon is between 4 and 7 years, but this
may vary depending on company-specific circumstances
or market conditions.
7. What is a venture
A venture capital fund in the Greek legal sense is
a closed-end fund operating in line with the provisions
of Law 2992/2002. Such funds are managed by dedicated
VC fund management firms. Fund capital is preferably
invested in companies active in key "new economy"
sectors such as telecommunications, IT, e-commerce,
biotechnology, new materials, and in companies whose
competitive advantage is founded on the application
8. What is Attica
Attica Ventures is a dedicated VC fund manager, subsidiary
of Attica Bank.
9. Which funds are
managed by Attica Ventures?
Attica Ventures today manages Zaitech Fund, a
€ 40 million venture capital fund whose shareholders are Attica Bank and the New
Economy Development Fund (TANEO).
10. What types of
companies does the Zaitech Fund invest in?
- Innovative companies with legal and actual seat
- Preference is given to companies active in key "new
economy" sectors or whose competitive advantage
is founded on applications of technology derived from
the "new economy".
11. Where does the
Zaitech Fund invest?
Investments are carried out exclusively in small
or small-to-medium sized enterprises; preferably,
but not exclusively, in the start-up phase or in early
stages of operation.
12. What amount
does the Zaitech Fund invest per firm?
- Maximum of €2.5m per company per financing round.
Consecutive financing rounds may be spaced no less
than 12 months apart.
- Maximum of €8m overall investment per company.
13. What role does
Attica Ventures take in the management of its portfolio
It is not Attica Ventures' objective to substitute
the management team of portfolio companies. Attica
Ventures supports company management wherever requested
or where this is considered necessary in an effort
to achieve the best possible result.
14. What is the
duration of a typical Zaitech Fund investment?
Zaitech Fund's participation in the share capital
of a company will typically last between 4 and 7 years.