IV CC

IDRO Venture Capital Company

“Turning Great Ideas Into Great Solutions”
 Agenda:

Part I: Introduction
Part II: High-tech Market in Iran
Part III: IVCC-Overview
Part IV: Investment Strategy
Part V: How to Apply for Funding
Part VI: IVCC.ir & IdroVC.com
Conclusion / Q&A
 Introduction
 Iran’s High-tech Industries
 Iran’s Demographic
Advantages & Challenges
 Lack of Suitable Financing
Avenues
 The Value Add of VCs to
Development of High-tech
Sectors
Iran-Emerging Industries
ICT
Fixed, Mobile, and Data
Telephony
Information Technology
Software
Hardware/Networks
Technology
Non-ICT High-Tech
Medical Engineering
Biotechnology
Nano-technology

Services
Banking & Finance Education
Insurance Health Care
Transportation
Tourism
 Iran Demographics
 Large young population
(65% under 30)
 Massive talent pool for
high-tech (Iran, along with
India, Israel, and Russia,
among the top potential IT
centers in Asia
 Unemployment and brain
drain of the highly educated
are major issues for the
government
 Financing Issues in Iran
 Limited financing channels for
SMEs
 Inappropriate banking
regulations (collateral the main
obstacle)
 High cost of financing when
available through normal
channels
 Lack of support for high-tech
industries as opposed to
traditional industries
 The Value Add of VCs
 Significant role of VCs in development
of high-tech industries
 Creation of alternative investment and
financing markets
 Significant role in promoting best
practices and professional
management methods within SMEs
 Significant role in promoting standards
for business plans and other business
tools
 Significant contribution to the overall
economy
 IVCC- Introduction
 Iran’s 1st High-Tech, High-Risk
Venture Capital Company
 Brainchild of IDRO’s Deputy of
High Technology Industries
 6-month research completed
and the Pre-feasibility study
and the constitution are being
finalized
 Expected launch date:
Sep./Oct. 2004
 IVCC-Mission
To promote innovation by
nurturing ideas and supporting
high-tech companies through
direct investment and management
Participation
Also:
 To establish the VC sector in Iran as an
alternative financing channel for SMEs
 To grow IVCC into one the region’s
most progressive and dynamic VCs
 To attract foreign participation
(financially & technologically) in Iran’s
high-tech sectors
 SWOT Analysis
Strengths
 IDRO’s financial power
 IDRO’s credibility with Iranian
industries and business community
 IDRO’s experience in similar types
of investment
Opportunities
 Iran’s vast technical talent pool
(especially in ICT)
 Lack of competition (no other VC’s
in the market)
Weaknesses
 IDRO’s non-financial
mission/motives may overshadow the
commercial success of IVCC
 Negative view of private sector on
the efficiency of the government-
managed projects/companies
Threats
 Lack of proper management
resources in Iran (VC experts)
 Lack of proper entry/exit vehicles
 Lack of models to follow (business
plan and company/idea
assessment/valuation)
 IVCC-Quick Facts
 Name: IVCC (IDRO Venture Capital
Company)
 Launch Date: Sep./Oct. 2004
 Type of Company: Private Limited
Liability
 Initial Capital: $50 million
 Initial Cash Investment (Cash Flow):
$10 million
 Investment Range: $1-8 million
 Investment horizon: 3-5 years
 Location: Tehran (Initially within
IDRO’s facilities)
 IDRO’s Participation: 40% preferred
shares with veto and decision making
privileges
 Partners: Foreign VCs and investment
banks (in phase 2)
 IVCC Structure-General Strategy
 Small and flat organization to
begin with
 IDRO as the main LP
 If no GP is found, IDRO will play
both roles initially
 IVCC Development Stages:
1. Start as a department of IDRO
2. Launch as a separate company
after 6-12 months
3. Open to local and foreign private
participation

Stage 1 IVCC as a Dept. of Stage 2 Stage 3

IVCC launched as an Open IVCC to local and
IDRO and based within
independent company foreign participation
IDRO premises
 Target Companies
 Companies Supported:
 Iranian companies active in high-tech projects
 Int’l companies with Iranian majority
ownership/management
 Sectors Supported:
 IT
 Telecom
 Biotech
 Nano-tech
 Medical Engineering
 Stages supported (company life span):
 Seed
 Start-up
 First-stage
 Idea/Project Sourcing
 Conferences, seminars,
and exhibitions
 Universities & Research
Centers
 IDRO’s subsidiaries such
as MAGFA
 Partners such as (could be
TAKFA, SANARAY…)
 Greater public through the
Internet and the media
 Project Assessment
 Idea itself
 Uniqueness
 Feasibility
 Business Plan
 Market
 Financials
 Competition
 Management & HR
 Skills and experiences
 Technical and managerial/commercial
 Valuation
 Entry Strategy
 Participation through share
acquisition (with controlling
power if minority) for a period
of 3 to 5 years
 Strong contractual
commitment from the investee
 Company constitution usually
amended to accommodate
fast and decisive
management style
 Management Participation
 Presence at BOD level
 Participation in major decision
such as management change,
product development and sales
strategies
 Guiding the company using past
experience and expert advise
 Establishing reporting mechanisms
and performance evaluation
 Frequent and comprehensive
Reporting back to IVCC’s
investment comittee
 Exit Strategy
 Management buy-out
 IPO (initial public offering) if
possible
 Sales of shares to 3rd party
interest
 Exit after the investment goals
are satisfied and/or if the
situation calls for it
 IVCC.ir & IdroVC.com
 FirstVC portal in Iran
 Business plan submission
and through the web
 SME services (including
business plan writing
guidelines and tips)
 Private section for
partners and IVCC staff
 Ultimately in 2 or more
languages
 IVCC Org Chart
Investment
Committee
Fund Raising Fund Management
Outsourced
Accounting,
MP
LP’s GP’s Legal, …
‫شریک مدیریتی‬

Advisors/Consultants‫م‬
‫شاورین‬

Principal IVCC 2-3% Annual

+ 80% Mgmt Fee +
Fund Fund
Profit 20% Profit
Fund Manager Manager
Manager ‫مدیر‬
‫مدیر‬ ‫صندوق‬
‫مدیر‬ ‫صندوق‬ Associate
‫صندوق‬
Investment Associate Associate ‫کارشناس‬
‫کارشناس‬ ‫ارشد‬
‫کارشناس‬ ‫ارشد‬
‫ارشد‬ Analyst‫ت‬ Analyst
Analyst ‫تحلیل گر‬
‫حلیل گر‬
‫تحلیل گر‬

Profit Administration/Communication/Marketing
‫ ارتباطات و بازاریابی‬، ‫امور اداری‬
 IV CC

IDRO Venture Capital Company

“Turning Great Ideas Into Great Solutions”

Questions