donnchadh cullinanstartup gathering waterford oct 2015 [recovered]

1

DRIVING BUSINESS FORWARDFunding Landscape & EI Support

Donnchadh Cullinan. October 2015

2

Growth Capital - Goal

“To maximise the access of EI clients to Growth Capital so that they are able to sustain and accelerate their growth”

3

The Funding Journey

R&D Startup Early Growth

Accelerating Growth

Sustaining Growth Maturity

Proof of Concept Funding

DevelopmentCapital

ReplacementCapital

MBO / MBIDevelopment

Capital

Seed Corn First Round Second Round

Business Angels

Founders, Family & Friends

Public Sector

Venture Capital

Public Listing/IPO

Debt

Corporate Venturing

4

Financing Enterprises

R&D Startup Expansion Large

Scaling

SteadyStart-up Risk Capital.

Innovation Funding

Growth Funding

H2020

Seed Funds

EI HPSU

Venture Debt

Growth

IPO

EIIS/BES

Trade FacilitiesWorking

Capital FinancingAsset

FinancingMicroFinance

Venture Funds

Innovation Fund Ireland

Bus Angels

Development Capital

5

Growth Capital - Goal

“To maximise the access of EI clients to Growth Capital so that they are able to sustain and accelerate their growth”

“Appropriate”

6

28,000 FriendsFamily

Colleagues

Angels & Informal Networks

5:1Ratio of ‘Informal Money’

to Venture

3,000 Angels

€195millionInvested by Informal

Networks

`The Entrepreneur Watch’ (Jan 2013)

7

Business Angel/Private Investor Networks

€9.5m

(48 Investments in 2014)

• HALO Business Angel Network (HBAN)

• Business Angel Networks matches pre-screened investment opportunities with Syndicates

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=XsI6BYlp5O4IQM&tbnid=usgmizIUThHhRM:&ved=0CAUQjRw&url=http://www.nsc-campus.com/index.cfm/page/technologyserviceprovider&ei=O7ZmUeWkAcec0QXu8oCYAQ&bvm=bv.45107431,d.d2k&psig=AFQjCNH2C-PSGsgtaKwk8ymNlCWymuDDnA&ust=1365772173191539






http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=FHQQr9j-BR3YOM&tbnid=3EtLLNIEp_TjlM:&ved=0CAUQjRw&url=http://www.vetip.eu/news.php?story%3D3&ei=XbZmUb2_C7Cy0AWTmIHYCQ&bvm=bv.45107431,d.d2k&psig=AFQjCNE9KCiKg4DUVSQ4ciyqj3Mq-PkGwg&ust=1365772250638441

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=3gsdjLxw98yJOM&tbnid=wexZ4zH2QJ7oZM:&ved=0CAUQjRw&url=http://www.dcebenterpriseguide.com/directory/Dublin-Business-Innovation-Centre&ei=nLdmUca6M8XV0QXFwYCACQ&bvm=bv.45107431,d.d2k&psig=AFQjCNEmSoh5TJkVmWMTVz8Gl3w4Huzx5g&ust=1365772292388254

8

External Equity

“A Marriage with a planned divorce”

Top 3 Investment Criteria Management team Exit opportunity Return potential.

Undertake due diligence on your potential investor

have ‘skin in the game’

http://www.hban.org/wp-content/uploads/2012/02/HBANInvestorGuideEntrep1.3.31.pdf

“Know your Enemy”



9

€15kFeasibility

Enterprise Ireland – Financial Supports

€250kHPSU Package

€50kCompetitive Start Fund

Manufacturing or internationally tradable service

Usually based on technological innovation

Export oriented

10 employees - 3 yrs

Sales > €1m

10

Enterprise Ireland – Financial Supports

900 Business Plans

450New Frontiers

102 HPSU81Mentors

€4m

€6m

€20m

11

HPSU Feasibility

• Support to investigate viability of export proposition

• Eligible costs include– Market Research– Salaries, Wages & Overheads– Business Plan Development– Technical Research– Prototyping

• Available Support• Up to €15k at 50% rate

€15k

12

Competitive Start Fund

Success to date• 227 Cos approved to date• ~35% have gone on to

iHPSU• Calls 1 - 4

Future Open Calls• Aviation & Mfg• Female• Youth

What • €50k for 10% equity stake

matched with €5k from promoters

• Sprint pilot programme • Digital Content CSF

applicants

How • Competition – funding goes to highest ranking companies• Panel of serial entrepreneurs select the winners

€50k

13

iHPSU Package

Enterprise Ireland works with promoters and 3rd parties to jointly fund a start up business plan against agreed milestones

• €100k - €350k (average size €250k) • Funding to execute the Business Plan

• Equity investment • CCRP or similar terms• EI shareholding will not exceed 10%

• Max EI contribution is 50% • Balance from 3rd party

• Consult your EI Development Adviser!!

€250k

14

What we look for in iHPSU

• Large Market Opportunity [especially if VC needed]

• Barriers to Entry [Current/Future]• High Growth, High Gross Margins, Scalable

15

Business Model Vs Business Plan

• ‘Known’ Unknowns– Business Plans are operating documents describes the

execution strategy for addressing “knowns.”– Write Plan, add Money and Hey Presto!

• ‘Unknown’ Unknowns“A Start-up is a temporary organization formed to

search for a repeatable and scalable business model”

• A Business Model describes how your company creates, delivers and captures value.– designed to change rapidly - reflects iterative reality of start-ups– Test & gather feedback on critical hypotheses

16

Business Model Vs Business Plan• CSF to HPSU to Established to PLC

– All need a plan based on a Model – More details as Cheque size increases– Bank funding – historic vs forward looking

• “Business Planning is a Process not a document”– Its not homework!!– Not a compendium of your knowledge– AGE/Leadership for Growth

• “No Business Plan survives the first Contact with Customers”…..or Investors

• Test, learn adapt

17

Business Planning• Predicting the Future

– 12,24,36 months?– What is required to get to the next Milestone

• Know your audience– Tailor the plan (Investor Value Proposition) –

• Y Combinator 2:45m/45hrs– What are you selling (Angel/VC/EI) – Product vs Proposition– Busy People looking for Shortcuts – Trust but Verify

• Only put down What you can Stand Over– Hypotheses are OK– Time to get to €1m – why are you different?– Credible Assumptions Vs Incredible Plans!

–Hockey sticks are for Hockey!!!

18

An Old Wise Man once said…..

“What are you Selling?”“Who are you going to sell it to?”“How much do you want for it?”

Aidan Stack – HPSU (2006)

19

Growth Capital

Donnchadh Cullinan 727 2162 [email protected]

Cian Daly 727 [email protected]

Banking Relations

Tom Early 727 [email protected]

Andrew Peet 727 [email protected]

Thank You