business planning biotechnology yes young entrepreneurs scheme monday 13 october 2014
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Business Planning Biotechnology YES Young Entrepreneurs Scheme Monday 13 October 2014. Stephen Slater Director. Who are RMT ?. North East’s leading Independent accountancy practice 6 directors & 70+ staff Started in 1954 National and international networks Full range of service - PowerPoint PPT PresentationTRANSCRIPT
Business PlanningBiotechnology YES
Young Entrepreneurs Scheme
Monday 13 October 2014
Stephen SlaterDirector
Who are RMT ?
• North East’s leading Independent accountancy practice• 6 directors & 70+ staff• Started in 1954• National and international networks • Full range of service• “One-Stop Shop”• Owner Managed Business Specialists
IP Exploitation
Concept Research Business
Plan
IP Protection
Funding Package
Product Dvpt
Commercial-isation
Working Capital
Strategy Dvpt
Market Research
Company Set Up
Idea Dvpt
Risk Management
Revenue Generation
Strategy
Commercialisation Lifecycle
New and Highly
Entrepreneurial
Disruptive Technology
Addressing an Unmet
Need
Growth Focussed and
Scalable
Has the Ability to
Achieve a Big Outcome
(Exit / IPO)
What is a start up?
A distinct type of
business with 5 key
attributes
Strong Management
Team
Large and Growing
Market Sector
Scalable and Capital Efficient Business
Model
Competitive Advantage: IP / Technology
Realistic Exit Opportunities
Five Factors of a Fundable Business
Businesses that scale are businesses with Operating Leverage
% A
nnua
l gro
wth
Time / Years
Revenue
Operating Expenses
Adding Operating Costs (Technology, Sales, Staff etc.) at the same rate as
which Revenue grows does not equal scale.
What is a scalable business?
What is a Scalable Business?
Businesses that scale are businesses with Operating Leverage
% A
nnua
l gro
wth
Time / Years
Businesses that achieve exponential revenue growth
with only small and incremental increases in
operating costs are scalable businesses.
Revenue
Operating Expenses
What is a scalable business?
1. Market Demand
(What do your target customers want?)
3. Product(What do you do
best? What can you do best?)
2. Competition (What unoccupied
markets exist?)
Describing your Start-Up’s “value zone” is about working out where the 3 circles intersect:
Your business plan should position your
start-up here
Articulating Product/Market Fit
The Structure of an Investor Ready Business Plan
Executive Summary
Introduction
Business Model
Market and Competitor Analysis
Customer/User Acquisition Strategy
Product Roadmap
Management Team
Financial Projections
1
2
3
4
5
6
7
8
Product & Technology Overview
Make up of an investor ready business plan
What Investors Want To Know• What is your IP and can it be protected? What barriers are there?• What is so compelling about your product/service? Why will people want
to buy it?• Who are the key competitors and how are you different?• How scalable is the business? • What is your market?• Do you have a clearly defined revenue model – how will your business
make money?• What is your route to market? Can you add credibility to this?• Complete and robust financial projections – the return!• The risks – SWOT and PESTLE• Confidence in management team – technical and non-technical. Are they
incentivised?• Exit plan
Tips and common mistakes
The most important word in raising early-stage funding is Credibility. This starts with the CEO. What impression do you think you are making with an investor?
You can will make it work at all costs
(convincing)
Track record with other technology start-ups
(growth/exit)
Deep subject matter expertise and/or
industry knowledge
Demonstrated commercial savvy (not
just technical)
Growth ambitions that are also believable and
pragmatic
Know your business plan and model inside
out
Credibility Builders
Over-Claiming
Vagueness – Lack of Clear
Facts
Not Being Able to
Explain the Business Plan
Going too Early (Under-Developed
Idea / Model)
Not Delivering on
Requests (Delays)
No Believability
to the Strategy
Credibility Failures
Compromising your credibility
Typical Mistakes in Investor Ready Business PlansNothing to Visualise
the Product
High Burn Rate (Small
Runway)
Limited Time
Between Funding Rounds
No Slack in the
Company's Operating
Capital
Next Round Required Before
Company Hits Revenue
Too many Revenue Streams
Typical Mistakes in a Business Plan
Seeking to Raise Finance
“Start-Up X will achieve its projected revenues by taking just 1% of the £48bn Global market”
…and the classic mistake
The Investor PitchFind out how long you have and who is attending. All of your Management Team should attend.
Be confident and show passion but explain what you do in English. Investors will not spend time trying to find out about your product.
Treat objections as a sign of interest. Do not get defensive - investors will push you to test you.
Address objections with specific data – build their investment case for them. Answer questions factually and to the point (don’t waffle)
Investors see lots of presentations. You have to stand out.
A bad presentation is a missed opportunity – you won’t get a second chance.
Introduction (Including Elevator Pitch and Team Introductions (5 Minutes)Concisely say who and what you are. Elevator Pitch and Team introductions.
Summary and Call to Action
Problem Solution (Including Demo) Underlying Technology Business Model User Acquisition
Team
Headline Financials Timeline and Milestones
5 Minutes
Core of the Presentation: 15-20 Minutes
2 Minutes
One Slide Each
The Slide Deck
Back Up Slides (After Your Final Slide):
• Market Data
• Details of Technology
• Financials
• Competitors
• Patent Applications
• Customer Correspondence
• Letters of Intent
Do Not Present These but have them in
reserve:
Be ready with back up slides / materials on more detailed areas outside of what the
slide deck covers in case you are asked.
Use the relevant slide to then explain your point
or answer.
The Slide Deck should give a summary overview of the Business Plan
The Slide Deck
Tax Relief for Angel Investors
Income tax reliefReduction in tax bill of 30% of investment (up to £1m
per tax year)
CGT deferral relief On disposals one year
before investment to three years after
CGT exemption If shares qualify for income tax relief no
CGT on disposal
EIS Income tax reliefReduction in tax bill of 50% of investment (up to £150k per company, max £100k
per investor)
CGT relief 50% of gains made in the year reinvested
(2013/14)
CGT exemption If shares qualify for income tax relief no
CGT on disposal
Shares must be issued within 2 years of
commencement of trade
Seed EIS
Effective for shares issued from 6 April 2012
Research & Development Tax Relief
Activities/projects which seek to:
“extend overall knowledge/capability in the field of science or technology”
• Eligible expenditure: Wages and salaries, consumable materials, power, water, fuel, computer software
• Tax ReliefsEnhanced deduction of 130% to 225% against profits from 1 April 2012 chargeable to corporation tax, orRepayable tax credit (up to 25p per £1) if loss making
Patent Box
Elect to Apply 10% Tax Rate to Profits Arising from Qualifying
Patents
Grants• NBSL www.nbsl.org.uk
• Business & Enterprise Group www.investment4growth.co.uk
• Newcastle Science City www.newcastlesciencecity.com
• Growth Accelerator www.growthaccelerator.com
• BICC Innovation Programme www.ne-bic.co.uk
• Local councils
• Lets Grow – RGF – http://www.thejournal.co.uk/all-about/let's%20grow
• Research & Development Grants – www.innovateuk.org
• Technology Strategy Board – www.innovateuk.org
Venture Capital• Proof of concept – www.northstarventures.co.uk
• Early stage seed funding (Accelerator) – www.northstarventures.co.uk
• Technology – www.ipgroupplc.com
• Angel match fund – www.riverscap.com
• Business Angels – www.bbaa.org.uk
• Private Sector Venture Capital – www.bvca.co.uk
• NESTA – www.nesta.org.uk
• Local Angel Groups – www.big-angels.co.uk www.gabriel-investors.com
Websites
www.nea2f.co.uk
www.j4bgrants.co.uk
www.carbontrust.org
Crowdfunding
• Finance Raising (Equity or loan) – Crowdcube• Product Funding - Kickstarter
Useful links…
www.gov.uk/browse/business
www.bytestart.co.uk/
www.hmrc.gov.uk/newbusinesses/
www.r-m-t.co.uk
Example – Would you invest?• Belle and Sebastian want to start up in business together. They have both
been working in the club scene for over ten years, Belle as a DJ and Sebastian as a venue manager. They have had an idea of creating a website to endorse up and coming DJ’s by giving them the opportunity to record, promote and sell their music.
• They have £20,000 between them to put into the business but need to raise a further £30,000 to get the business off the ground.
• Where are the concerns for an investor?
Thanks for listening!
Any Questions?
Contact details
Stephen SlaterDirector
RMT Accountants and Business Advisors Limited
0191 256 [email protected]
www.r-m-t.co.uk@cyberaccountant