FAQ

EVF is the first venture capital fund in the Enterprise Investors group. This fund was created in response to the demand for private equity/venture capital financing from small and medium-sized companies seeking to raise capital to finance their growth. EVF has at its disposal €100 million, which was provided by reputable financial investors from the US and Europe. It is the largest fund of this kind in Poland and in the whole Central and Eastern European region.

Although we remain focused on the investment activity we have pursued to date, we also recognize the financial needs of a new generation of enterprises. In response to this demand we decided to create a separate fund that will finance the expansion of small and medium-sized companies.

The largest investor in EVF is the George Kaiser Family Foundation, which, along with its Argonaut Ventures unit, has invested more than $1 billion in privately-held companies and venture capital funds globally. The other investors in EVF are international financial institutions that have been working with Enterprise Investors for many years.

The EVF team is led by Enterprise Investors partner Rafał Bator. The whole investment team draws on their experience in financing companies at different stages of development, supporting growth, as well as successfully exiting investments. The team members have completed investments in companies in the services, manufacturing and IT sectors, and have worked for such renowned companies as Nokia, Optimus, PwC, Prokom and Sygnity.

We invest in companies that are already active on the market, have a proven and successful business model and generate revenues and profits, at least at the operating profit level. We are interested in dynamically expanding companies in the wider IT sector, as well as in more traditional sectors such as manufacturing, services, trade and finances.

We take on investments within €1-5 the million range, and have the option to increase that amount if justified.

A capital increase is our preferred form of investment. In selected cases the transaction may be combined with a partial buyout of shares from the owners.

Since the main goal of our involvement in a company is to support the owners/management in implementing their development strategy, we are ready to take a minority stake. We want to participate in the company’s activities from a supervisory board position and leave operational matters to the owners/management.

As a financial investor, we remain involved in our investee companies for a limited period, which is usually 3 to 5 years. After that and having agreed with the remaining shareholders the optimum way to realize profits, we sell our shares through an IPO or to a trade investor. It is also possible for our partner in a given investment to buy out our shares.

Unlike banks, we do not give loans but invest our capital directly, and thus share the risk of the investment with an entrepreneur. This means that we do not require security on the entrepreneur’s assets. We do not apply procedures mechanically, and we do not calculate solvency indices. When we invest our capital we do not require repayment of the principal and interest; instead, we realize profits together with the other owners by selling shares or paying out dividends.

We understand the benefits of drawing on family resources. Nevertheless, we realise that as an enterprise grows so do its financial needs, and there comes a point when its own resources are no longer sufficient. As a stable and responsible investor we do not require that our capital be returned if we see it can be put to good use in other ways.

Our capital is "patient". Unlike many stock market investors, when reaching decisions we do not rely solely on the current market situation. We take a long-term view of the situation on the stock market. Moreover, companies that work with us can avoid the inconvenience of being pressured by analysts and the media and of having to make company information publicly accessible.

Unlike industry buyers, we have never been in direct competition with an entrepreneur. When we invest in a business, we undertake to support the current owners/management board in realising their company development strategy, without imposing our plan. It is in our interest to further develop a firm’s know-how and to protect its confidentiality.

We believe that the way we reach decisions at EVF is much less formal than the procedures involved in seeking EU funds, and this allows us to reach key decisions quickly. We will be happy to talk with firms that have not succeeded in obtaining EU funding.

We are pragmatic and flexible, and do not apply bureaucratic procedures. We realise that developments do not always go according to plan. That is why in crisis situations we are also (or even above all) ready to discuss the issues and jointly seek a solution.

Enterprise Investors has more experience in working with enterprises than any other firm operating on the Polish private equity/venture capital market. We have supported companies all the way from inception, through dynamic growth and up to flotation in such areas as choosing the right strategy, selecting management, resolving legal issues and dealing with financial matters (mergers, acquisitions, accounting, controlling).

Enterprise Investors’ excellent reputation, its portfolio of current and closed investments, and the broad network of our team members’ personal contacts will help “open the door” for companies seeking new clients, employees and advisors. Thanks to our presence in Romania, the Czech Republic, Slovakia, Hungary and the Baltic States, the companies that work with us have access to our extensive knowledge of Central and East European markets, and thanks to our investors – also to the global network of venture capital funds.

A well-prepared proposal is our prime selection criterion. We expect a firm to be able to present a business plan or at least its basic features, which we describe below in six thematic blocks:

• The firm – i.e., who are we dealing with? In this section you should present the firm's history, its main areas of business, its employment structure, a simplified income statement and a breakdown of profitability for the main categories of products or services.
  
  
• The managers – i.e., who will be our partner? Here there is room to present the CVs and professional experience of the key members of the management team (together with an objective assessment of the "human resources" and suggestions for essential improvements in the future).
  
  
• Market opportunities – i.e., what is special about your offer and who are your customers? Here you need to discuss the basic products/services, stress their unique features, present the current and future market, the principal customers, the pricing level and distribution channels. This part of the business plan is often presented too superficially due to a lack of data and market analysis. And yet, an investor’s level of interest in a project is in direct proportion to the amount of information given in this part of the presentation.
  
  
• The competition – i.e., who is going to stand in our way? Apart from presenting the main Polish and foreign competitors, it is worth presenting a comparison of prices, costs, profit margins, operational methods, customers’ opinions, i.e., everything that can help explain why your firm will beat the competition.
  
  
• The firm’s development plan – i.e., what should we do to fulfill your dreams? The three fundamental elements of this part of the business plan are: the investment plan (including an analysis of the profitability of individual components), the marketing plan (organization of sales, distribution, prices, promotional methods) and the operating plan (the firm’s organization, its IT and management systems, and employment).
  
  
• Financial analysis – i.e., mathematics versus literature. This is a presentation of the above information as numbers (economic assumptions, income statement, balance sheet, and cash flow statement as a logical continuation of the previous two statements). Please remember that the projected future results must be presented alongside historical data (e.g. for the last two years), from which they should follow on logically (for instance, a dramatic increase in profit margins requires explanation).

An accurate and cohesive business plan considerably increases the likelihood that we will invest, but even if it is not yet 100% ready we still think it is worth discussing it.

Providing our partner is active and cooperative, it should take no more than 3 months from the first contact with a company before we can sign contracts and transfer our capital to the company’s account.

We are interested in being contacted by advisors, media, technology parks, economic zones, banks and other financial institutions, as well as local business organizations which can help us reach out to companies that could become our partners.

We invite you to contact us by e-mail, telephone or fax. We will also be happy to meet you at our office or to visit you at your headquarters. We will respond to each enquiry or proposal sent to us and we guarantee confidentiality.

Enterprise Investors
Enterprise Venture Fund I
Warsaw Financial Center
53 Emilii Plater St., 29th floor
00-113 Warszawa
Tel.: (48 22) 458 86 88
Fax: (48 22) 458 85 58
E-mail: evf@ei.com.pl