European Venture Partners, a provider of venture leasing products to the early stage venture capital market has unveiled its second venture leasing leveraged fund, EVP II with a target of €105m.
EVP II is being sponsored by the European Investment Fund (EIF) and Deutsche Bank’s Alternative Assets Solutions Group.
EVP was set up in 1998 by the originators of Venture Leasing in the US, Dominion Ventures. EVP I has committed over €155m to some 70 high tech companies across 10 countries.
Venture leasing is a combination of traditional leasing and venture capital and is designed to address the fixed asset financing needs of early stage, high growth, technology companies. These facilities enable both entrepreneurs and VC investors to leverage a company’s initial equity at a time when traditional debt finance is not available. This leverage allows the entrepreneurs to stretch their equity through the critical early stages of their life cycle while also enabling the VCs to commit less capital at the outset without impacting on the company’s development plans.
Venture leasing usually finances the core assets such as manufacturing and production equipment, telecommunication systems, test and measurement devices, laboratory equipment, computers, servers, and other office equipment. In exchange for the lease financing, the venture leasing company receives ownership of the equipment, monthly lease repayments and equity warrants in the company.
As an industry, venture leasing started in the US. Prominent players in the US within the venture leasing industry include Lighthouse, Western Technology, Silicon Valley Bank, GATX, Dominion Ventures, and Pinnacle. Around two thirds of start-ups in the US use some form of this financing. In Europe, the industry is still in its infancy and the number is lower but growing.
Geoff Woolley, EVP chairman, said: “The EIF and Deutsche Bank are both first class partners that will help EVP expand its already leading franchise position in the European Venture Leasing market and we feel encouraged by this strong commitment. This partnership also establishes a powerful financial platform for our plans to continue and extend our support for Europe’s leading venture capital funds with leasing facilities for venture-backed, early stage companies into the future.”