Is Equity-Financing Always Optimal for Innovative SMEs? --How ...

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第 25 期Diagram 4Details of Risk Sharing Finance FacilitySource : Gunnar Muent’s presentation material from a forum, EIB Innovation 2010InitiativeThe other example, as illustrated in Diagram 4 is the framework named Horizon 2020, 17successor program to FPs, which was designed to facilitate the competitiveness of EUnations. It plans to use CGS as a main vehicle to finance for EU’s innovative and researchoriented SMEs (RSIs) including start-ups.It is noteworthy that such scheme of EU came out as a result of thorough high-level andwork-level coordination among member countries. Also, please note that all the innovationsupporting programs have a clear goal of narrowing the gap between U.S. and EU asstipulated in the part of “Lisbon Treaty.” To compete with U.S. they developed their own17 Risk Sharing Instrument for Research & Development & Innovation driven SMEs and Small Mid-caps, RSI-Frequently Asked Questions (updated as of 23 April 2012), EC & EIF.158
Is Equity-Financing Always Optimal for Innovative SMEs?--How about Credit Guarantee?pp. 139-180schemes to be pertinent to the context and given condition of EU.Furthermore, it is not really a matter of financing scheme itself, but a matter of how toassess and evaluate the right subjects where market is wishy-washy to take risk as well as amatter of how far the public plays a role.There are actually three distinguished advantages of CGS in innovation financingunless it is abused to overshoot or beneficiaries are not blindly selected:1)CGS is the cheapest source of risk financingThe conventional advantage of using CGS applies regardless of policy areas: with smallcapital in hand now, government can leverage money supply to the targeted policy segment.Also, it is a cheap source of risk capital for the beneficiaries because CGIs are operated,more often than not, with the concept of “targeted loss” rather than IRR.2) It is possible to manage risk systematicallySignificant volume of rendering credit guarantee mainly through “ratings” enables CGIsto manage risk with sophisticated model because it is a lot easier to gauge the shape ofdistribution, which is nearly impossible in the case of VC investment portfolio due to highvariance. In case of KOTEC, it could roll up the minimum grade to be beneficiary, let’s sayB to BB of its own rating, if risk is going over its targeted level or if government asks todecrease funding due to fiscal constraint.3) It helps indirect financing source (short term loans) to be de facto patient capitalFor big firms, they source risk capital to propel long-term projects or to extend capital159
Page 2 and 3: 第 25 期I. IntroductionFacing the
Page 4 and 5: 第 25 期The argument of the paper
Page 6 and 7: 第 25 期back. Thus, equity financ
Page 8 and 9: 第 25 期Source : Korea Venture Ca
Page 10 and 11: 第 25 期with risks associated wit
Page 12 and 13: 第 25 期innovation capability doe
Page 14 and 15: 第 25 期development of the second
Page 16 and 17: 第 25 期tend to get equity fundin
Page 18 and 19: 第 25 期Assuming all the VC-funda
Page 22 and 23: 第 25 期expenditure through direc
Page 24 and 25: 第 25 期much larger scope. An art
Page 26 and 27: 第 25 期IV. Fundamental Problems
Page 28 and 29: 第 25 期sector-specific themes su
Page 30 and 31: 第 25 期3) Increasing the number
Page 32 and 33: 第 25 期The failure will call for
Page 34 and 35: 第 25 期mindset and skills when i
Page 36 and 37: 第 25 期V. Conclusive RemarkMicha
Page 38 and 39: 第 25 期References:Annual Report
Page 40 and 41: 第 25 期KOTEC’s Programs for SM
Page 42: 第 25 期ItemsAcceptance ofGuarant

Is Equity-Financing Always Optimal for Innovative SMEs? --How ...

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