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Researcher to Innovator SETsquared programme at Exeter Innovation Centre 22nd November 2013

TRANSCRIPT

Slide 1

The Innovation Centre, University of Exeter, Exeter EX4 4RN

innovation@spaceforsuccess.co.uk - 01392 262300

2013 Peninsula Innovations Ltd All Rights Reserved, Peninsula Innovations Ltd.

Registered in England under No 06022710

Options 4 Finance

The Innovation Centre, University of Exeter, Exeter EX4 4RN

innovation@spaceforsuccess.co.uk - 01392 262300

2013 Peninsula Innovations Ltd All Rights Reserved, Peninsula Innovations Ltd.

Registered in England under No 06022710

Agenda

Intros

Robin Jackson, Director, Innovation Centre

Ben de Cruz, Partner HWCA

Housekeeping

Aims

Information to be best placed to secure finance when needed

The Innovation Centre, University of Exeter, Exeter EX4 4RN

innovation@spaceforsuccess.co.uk - 01392 262300

2013 Peninsula Innovations Ltd All Rights Reserved, Peninsula Innovations Ltd.

Registered in England under No 06022710

Who are you?

Start-up

Track record

Industry Knowledge

Market acceptance

Growth

New or Existing Markets

Current performance

The Innovation Centre, University of Exeter, Exeter EX4 4RN

innovation@spaceforsuccess.co.uk - 01392 262300

2013 Peninsula Innovations Ltd All Rights Reserved, Peninsula Innovations Ltd.

Registered in England under No 06022710

How Much?

Know how much you need

Know what you are going to use it for

Prepare a Business Plan

Prepare financial forecasts

The Innovation Centre, University of Exeter, Exeter EX4 4RN

innovation@spaceforsuccess.co.uk - 01392 262300

2013 Peninsula Innovations Ltd All Rights Reserved, Peninsula Innovations Ltd.

Registered in England under No 06022710

Your Investment?

Risk How much are you taking?

You need to be all in

Personal Investment

If youve got it, use it

Sweat Equity

Difficult to assign value to

Accounting to record personal investment

The Innovation Centre, University of Exeter, Exeter EX4 4RN

innovation@spaceforsuccess.co.uk - 01392 262300

2009 Peninsula Innovations Ltd All Rights Reserved, Peninsula Innovations Ltd.

Registered in England under No 06022710

External Funding

Dont do it!

Bootstrap

Find your first customer

Build Value

Cash is King

Accounting for profitability

The Innovation Centre, University of Exeter, Exeter EX4 4RN

innovation@spaceforsuccess.co.uk - 01392 262300

2009 Peninsula Innovations Ltd All Rights Reserved, Peninsula Innovations Ltd.

Registered in England under No 06022710

Horses for Courses

Know what you want the money for

Differentiate between start up costs and working capital

Very clear in business plan

Know what type of finance suits your needs

Target the appropriate source

The Innovation Centre, University of Exeter, Exeter EX4 4RN

innovation@spaceforsuccess.co.uk - 01392 262300

2009 Peninsula Innovations Ltd All Rights Reserved, Peninsula Innovations Ltd.

Registered in England under No 06022710

The 3 Fs

Friends, Family & Fools!

Loan or investment

Carries a Social Risk

Always use contracts not just handshakes!

Structuring family loans

The Innovation Centre, University of Exeter, Exeter EX4 4RN

innovation@spaceforsuccess.co.uk - 01392 262300

2013 Peninsula Innovations Ltd All Rights Reserved, Peninsula Innovations Ltd.

Registered in England under No 06022710

Grants

Not always as good as they sound!

Almost always matched

Often lengthy applications

Technology Strategy Board products

Smart Awards

Innovation Vouchers

UKTI for export support

Regional variations

The Innovation Centre, University of Exeter, Exeter EX4 4RN

innovation@spaceforsuccess.co.uk - 01392 262300

2009 Peninsula Innovations Ltd All Rights Reserved, Peninsula Innovations Ltd.

Registered in England under No 06022710

Loans

Must be repaid!

Start-up Loans

18 30, average ~ 2.5K

Funding Circle

Crowd-sourced business loans

Personal Loans or Credit cards - expensive

Borrowing with confidence

The Innovation Centre, University of Exeter, Exeter EX4 4RN

innovation@spaceforsuccess.co.uk - 01392 262300

2009 Peninsula Innovations Ltd All Rights Reserved, Peninsula Innovations Ltd.

Registered in England under No 06022710

Banks

Dont ignore them!

Does your bank understand your business?

Talk regularly to your bank contact

Do you understand your banks business?

How do they de-risk their business?

How are their products designed to be used?

The Innovation Centre, University of Exeter, Exeter EX4 4RN

innovation@spaceforsuccess.co.uk - 01392 262300

2013Peninsula Innovations Ltd All Rights Reserved, Peninsula Innovations Ltd.

Registered in England under No 06022710

Bank Products I

Overdraft

Liked by businesses, less so by banks

Used to deal with cash flow variations, not purchases

Invoice Financing

Confidential

Grows with the business

The Innovation Centre, University of Exeter, Exeter EX4 4RN

innovation@spaceforsuccess.co.uk - 01392 262300

2013Peninsula Innovations Ltd All Rights Reserved, Peninsula Innovations Ltd.

Registered in England under No 06022710

Bank Products II

Loan

Secured

Enable growth, rather than start-up

Enterprise Finance Guarantee

Developed to support loans where security is not available

Same requirements as a loan

Higher interest

The Innovation Centre, University of Exeter, Exeter EX4 4RN

innovation@spaceforsuccess.co.uk - 01392 262300

2013 Peninsula Innovations Ltd All Rights Reserved, Peninsula Innovations Ltd.

Registered in England under No 06022710

Bank Products III

Asset Finance

Suitable for Plant, IT etc

Better fit than normal loan

Mezzanine

High Growth Capital loan

Finance for 3 7 years, no equity

The Innovation Centre, University of Exeter, Exeter EX4 4RN

innovation@spaceforsuccess.co.uk - 01392 262300

2009 Peninsula Innovations Ltd All Rights Reserved, Peninsula Innovations Ltd.

Registered in England under No 06022710

Private Equity

Investors require an exit 3- 5 years, 5x

Looking for something unique You are placing a value on your business

The more you achieve before investment, the higher the value

Demonstrate increasing value

Understand the rights of shareholders and what you are giving away

Valuing your business

The Innovation Centre, University of Exeter, Exeter EX4 4RN

innovation@spaceforsuccess.co.uk - 01392 262300

2013 Peninsula Innovations Ltd All Rights Reserved, Peninsula Innovations Ltd.

Registered in England under No 06022710

Crowd Funding

Project or Equity

Crowdcube up to 150K or 250 in special circumstances

Not a shortcut Same requirements as any other source

Get the ball rolling Promote your pitch

People still invest in people even online

Forecasting high growth

The Innovation Centre, University of Exeter, Exeter EX4 4RN

innovation@spaceforsuccess.co.uk - 01392 262300

2013 Peninsula Innovations Ltd All Rights Reserved, Peninsula Innovations Ltd.

Registered in England under No 06022710

Angels

An individual

Offer experience as well as funds

Sometimes want NED role

Rarely a quick process

Requires negotiation

Consider phased draw downs

Preparing for Due Diligence

The Innovation Centre, University of Exeter, Exeter EX4 4RN

innovation@spaceforsuccess.co.uk - 01392 262300

2013 Peninsula Innovations Ltd All Rights Reserved, Peninsula Innovations Ltd.

Registered in England under No 06022710

Venture Capital

A business

> 1M

Larger scale

Board involvement

Very High Growth

View more >