INVEGA announces selection of the venture capital fund manager: Start-ups operating in the defence and security sector to receive investments of EUR 13.5 million
The national development entity UAB Investicijų ir verslo garantijos (INVEGA) is inviting venture capital investment professionals to participate in the selection of the venture capital fund manager under the new venture capital financial instrument MILInvest. The aim of this instrument is to develop tech start-ups operating in Lithuania’s defence and security sector through the promotion of experimental development and innovation activities in the sphere of defence and security. This is not a traditional venture capital instrument, for which reason its implementation will require especially high competences.
This venture capital instrument is the first of its kind in Lithuania oriented towards the strategic sphere of defence and security.
“This venture capital instrument is the first of its kind in Lithuania oriented towards the strategic sphere of defence and security. We welcome the strategic approach of the Ministry of Defence that funds this instrument and its initiative to pursue the goal with the help of financial instruments”, says Kęstutis Motiejūnas, Chief Executive Officer of INVEGA. “We are talking about an especially sensitive segment, so the requirements for the financial intermediary, the manager of two venture capital funds being created, are high: we expect the future manager to rally a highly-skilled team of good repute with investment, corporate accelerator and team development experience and deep knowledge of the defence technology sphere of particular importance for the country”.
It is planned that the instrument MILInvest will be implemented by one fund manager who is to manage two funds: a pre-seed fund and a venture capital fund. The pre-seed fund will not only engage in investment activities, but it will also focus on the implementation of pre-accelerator and accelerator programmes. The pre-accelerator programme is designed for the idea and team development: it involves the organisation of events and the selection of authors with ideas and skills to develop new products in the sphere of defence and security, and the selected programme participants will be offered mentoring services and financial support. The accelerator programme will include the acceleration (training, consultation) of micro and small enterprises operating in the sphere of defence and security, and they will receive initial small venture capital investments that will enable developing or upgrading a product, gaining a foothold in the market and growing a business. The venture capital fund will be intended for investments in viable micro, small and medium sized enterprises operating in the defence and security sector with a view to developing them and get a return. The selected fund manager will have the task to attract funds of independent private investors to the venture capital fund in addition to the amount assigned by INVEGA. Therefore this fund can be of interest to private investors who seek benefit from technologies developed in Lithuania’s defence and security sector.
One of the distinctive features of this instrument is that natural persons who participate in the pre-accelerator programme will be able to build teams, develop business ideas and products, receive financial support for subsequent transition to the accelerator programme and get the first investments.
“This structure of the MILInvest financial instrument will allow testing an idea or product at a very early stage and, only after seeing the growing potential, investing in a viable project. One of the distinctive features of this instrument is that natural persons who participate in the pre-accelerator programme will be able to build teams, develop business ideas and products, receive financial support for subsequent transition to the accelerator programme and get the first investments”, says K. Motiejūnas.
Financial intermediaries who wish to take part in the selection of the MILInvest fund manager can submit applications to INVEGA by 16 August 2021. Full information on the submission of applications is available at https://invega.lt/en/news/108/call-for-expression-of-interest-for-the-selection-for-the-fund-manager-of-the-risk-capital-financial-instrument-milinvest:1130.
The financial instrument MILInvest is implemented with the money of the Defence Investment Fund financed by the Ministry of Defence, and it has received a total of EUR 13.5 million from the state budget. Managed by INVEGA, the Defence Investment Fund was established on 8 December 2020 by a financing agreement signed between the Ministry of Defence and INVEGA.
UAB Investicijų ir verslo garantijos is a national development institution established by the Government of the Republic of Lithuania, designed for assisting Lithuanian businesses with obtaining the required funding. The mission of the institution is promoting Lithuanian business growth and competitiveness: the guarantees it provides help financial institutions to solve the problem of insufficient or unattractive collateral, and the administration and direct granting of soft loans, subsidies and venture capital instruments facilitate the obtainment of financing.