4. Structure of morning
•
•
•
•
Background and Grants (8.30am to 9.35am)
Key note speaker
SME, LEP and the ‘funding gap’
Grant schemes
•
•
•
SME experience, rewards, debt and equity
(9.55am to 11.10am)
Investment ready, business support and
closing address (11.30am to 12.35pm)
Q&A one to one / Networking (12.35pm to 2pm)
www.francisclark.co.uk
5. Twitter
Follow us on twitter @francisclarkllp
Tweet about this event using
#FCFinanceSW
www.francisclark.co.uk
6. Key note speaker
Michael Portillo
• Former Cabinet Minister
• Broadcaster
• The recovery, the Euro, Scotland
and future elections
www.francisclark.co.uk
10. Our BIG opportunities
Marine / City Deal
Hinkley legacy
Exeter Smart Jobs
Aerospace
Dependent on
Rail, Road and Digital Connectivity
Skills Infrastructure
11. EUSIF - background
• Proposals for
investment of:
Transit More
ion
Develop
ed
– ERDF (place blind)
ERDF £43.47 £14.41
– ESF (place blind)
m
m
– EAFRD (rural only)
ESF £28.9 £14.41
• Split by Transition
m
m
(Plymouth, Torbay and
EAFR Not split
Devon) and More
developed (Somerset) D
• Submitted 31st Jan
Total
£57.88
m
£43.31
m
£15.54
m
12. SEP Priorities
Business
People
Maximising Productivity and Employment
Opportunities
The infrastructure and facilities to create more
and better employment
Enterprise infrastructure
Investing in strategic employment sites in
our main cities and towns
Digital infrastructure
Building on our Distinctiveness
Creating a favourable business environment –
the GAIN Growth Hub
Simpler, more coherent business support
o Improved access to finance platform
o Tailoring national policies to local
potential
Achieving more sustainable and broadly based
business growth – the Global Market Growth
package
Reaching new markets – including public
sector, web-fuelled and supply chain
Globalisation (exports and inward
investment)
Support related to key opportunities –
transformational investment package
Golden opportunities – Catapult-lites and
networks
Horizontal Innovation – Capacity building,
grand challenges and Innovation for all
Creating the environment where businesses and
individuals can reach their potential:
Place
Creating the Conditions for Growth
Investing in skills and development to increase
job opportunities and move people into the job
market:
Moving people into employment - focusing
on youth, long term unemployed and
economically inactive
Careers advice and progression
Improving workforce skills
Creating a world class workforce building on our
distinctiveness and growth sectors:
Entrepreneurship and business skills
Technical and higher level skills
development and retention
Maximising the skills and employment
opportunities from our Golden
Opportunities
The Enabling Landscape
Transport and Accessibility
Sustainable solutions to flood and water
catchment management
Unlocking delivery of stalled housing sites
Energy Infrastructure
Skills infrastructure and facilities
Accessibility to education/employment
Digital Literacy for inclusion, progression
and business growth
The infrastructure and facilities needed to
support transformational change
Opening up specialist sites for marine sector
development
Investing in science park and innovation
infrastructure for nuclear, marine,
environmental sciences and aerospace
Maximising our environmental assets
13. Growth Deal
•
•
•
•
Single Pot – promised £70bn
Impact of austerity diluted the amount
Current deal might total £2bn across 39 LEPs
Money has been top-sliced from transport
and education budgets
• Timing issues and accountability still to be
resolved
16. All change!
• European Programme 2014 - 2020 – c£110m
• Starting to see grant schemes arising out of the LEPs
• State Aid
• Assisted Area Map changing – winners rather than losers
• City Deal
• c750 grant schemes
• BUT - SME funding gap remains!
www.francisclark.co.uk
17. Our successes
• £12m of grant unlocked £36m of other funding
• Create 840 and safeguard 640 jobs
• What makes a good grant application?
www.francisclark.co.uk
18. So, what is available?
National
Regional
Local
• Assisted Area status + Size
www.francisclark.co.uk
Eligibility and Level of grant
19. Regional Growth Fund
• Programmes – Assisted Asset Scheme, PWGF2 etc
• Projects – direct applications for >£1m
• RGF5 & 6
• RGF6 opens Summer 2016
• Competitive process
• Create sustainable private sector jobs
• Roadshows
• Yesterday’s news
www.francisclark.co.uk
20. City Deal
Headlines
• £300m (£34m public sector)
• Unlock commercial opportunities in marine sciences, renewable
technologies and to boost exports
• Plymouth and South West Peninsula
• Conversion of South Yard at Devonport Naval Base
• Young People
Business support and grants, including
• GAIN grants
• Innovation Vouchers, MAS and UKTI
www.francisclark.co.uk
21. Torbay Growth Fund: 2nd round
• Grants or loan up to £150k
• Minimum grant is £15k
• Up to £12k per job
• Capital or revenue projects
• Job creation
• Business investing in Torbay
www.francisclark.co.uk
23. Regional Growth Fund/Assisted Asset Purchase
Overview
Benefits for Business
Key Features
Eligibility
Exclusions
Examples
Summary and next steps
23
24. Regional Growth Fund/Assisted Asset Purchase
Overview
£2.6 Billion fund operating across England
Scheme runs from 2011 - 2016
Non repayable grants – subject to eligibility criteria and agreed job
targets
Create long term growth and sustainable employment
Encourage private sector investment
Lloyds Bank allocated £25 Million (June 13 to April 15)
24
25. Regional Growth Fund/Assisted Asset Purchase
Benefits To Business
•
Enables asset purchase (where businesses currently lack deposit)
•
Grants from £5,000 up to £500,000
•
Up to 20% of the asset cost for small enterprises (up to 50 FTE and
less than 10M Euro T/O)
•
Up to 10% of the asset cost for medium enterprises (up to 250 FTE
and less than 50M Euro T/O)
•
Non repayable
•
Amount of grant will be minimum amount required to enable us to lend
on normal lending terms
•
Remaining funding via HP / Loan (Min £100,000) facility
26. Regional Growth Fund/Assisted Asset Purchase
Key Features
•
Create / protect 1 job for every £15,000 grant received
•
Independent accountant to verify within 30 months after drawdown or 6
months after job target achieved
•
Grant is taxable income and classed as state aid
•
Unable to link in any other forms of state aid.
•
Meet normal viability criteria
•
Asset must be located in England (in an area outside London)
27. Regional Growth Fund/Assisted Asset Purchase
Eligibility
•
You need finance but lack the sufficient deposit
•
Able to commit to creating / protecting jobs for a min 12month period
•
An SME (as defined earlier)
•
No other state aid supporting purchase
•
Business not in financial difficulty.
28. Regional Growth Fund/Assisted Asset Purchase
Exclusions
•
Property investment / development – property purchases are eligible if property is for
own use and held on Co Bal Sheet
•
Air transport equipment
•
Road freight transport for hire or reward – eligible if eg vehicle for a wholesaler who
does their own deliveries
•
Fishery & Aquaculture
•
Primary production of Agriculture products
•
Coal
•
Export Related Activities – case by case
29. Regional Growth Fund/Assisted Asset Purchase
Recent Examples
Retailer – £195K RGF and £600K loan towards purchase of additional retail premises
for expansion – KIV property must be for own use and held on Co Bal Sheet
Building Contractors - £145K RGF grant and £600K loan towards purchase of new
offices
Tourism - £95K RGF grant and £380K loan towards assets to be used in refurb of
bar/restaurant/catering area and a small renewable energy scheme
Restaurant - £150K RGF grant and £450K loan to purchase their freehold premises
Manufacturing - £110K RGF grant plus loan of £385k to acquire a new R&D factory/
warehouse towards purchase price of £590K
29
30. Regional Growth Fund/Assisted Asset Purchase
Summary and next steps
•
Support SMEs with asset purchases that may have been discounted
•
Bring forward growth plans and create/protect jobs
•
Speak to your Relationship Manager/Director or Francis Clark
31. GRANTS - RGF
JOHN HUTCHINGS
PROGRAMME MANAGER
RGF GRANT FUNDS
PLYMOUTH UNIVERSITY
32. PLYMOUTH UNIVERSITY AND WESTERN MORNING NEWS GROWTH FUND 1 AND 2
PWGF 1 and 2
Management Information
RGF Round 1 – PWGF1
RGF Round 3 – PWGF2
33. ….results so far
PWGF1
• Awards made
• Average grant
• Total
• Jobs forecast to be created
• Cost per job
20
£46,000
£920,000
85+
£10,824
PWGF2 (….fully allocated…)
• Awards made
• Average grant
• Total
• Jobs forecast to be created
• Cost per job
41
£90,300
£3,705,000
449+
£8,250
……and has unlocked over £9.5M of private sector investment
35. • PWGF2 fully allocated in 9 months
• Demand still evident
• Several strong applications not
funded
• Enquiries still being received
• What next?
36. RGF4 – Plymouth and
South West Peninsula
City Deal
…now open!!!!!
37. Aims of the Fund
•
•
•
•
•
•
•
Rebalancing the local economy – more private sector employment
Creating new, and sustainable jobs
Helping local businesses to grow
Access to additional funding to enable project completion
Looking for good value for money
Co-investment from the private sector
Spend by 31st March 2015 – No pressure then!
• Projects need to be “spade ready”
38. RGF4 – Plymouth and South West
Peninsula City Deal
• A further £3 M to be “granted”
• Smaller Grants - £25k - £150k – limited to a fund of £1.168M
• Larger Grants - £250k - £1M max per applicant
•
Industry Sector focus
Marine and supply chain
Advanced Manufacturing
Digital
Environmental Technologies (……….but other industries may apply)
• de minimis or General Block Exemption
• Across the Heart of the South West LEP and Cornwall & Isles of Scilly LEP areas
• All Local Authorities are partners, Chambers (lead by Plymouth), GAIN, PCC lead
body, Plymouth University programme managers
39. ?
Speak with the Grant Team at the
end of the presentations
Thank You for listening
41. SMART
Previously known as “Grant for R&D”
Science, Engineering and Technology: New Products and Services
Grant support for SMEs:
• Proof of market (9 months, £25k, 60%)
• Proof on concept (18 months, £100k, 60%)
• Development of prototype (2 years, £250k, 35% / 45%)
Competitive / Batch Applications
Smart v R&D Tax Credits - cannot have both for same project
www.francisclark.co.uk
42. Innovation Vouchers
£6m for UK SMEs - Grants of up to £5k
Criteria
• challenge for your business/ specialist help
• first time that you have worked with the knowledge supplier
• In one of priority themes
Innovation and themes:
• “new or improved products, new or improved processes, new or improved
services, investigating new markets or managing your intellectual property”
• Agrifood; Built Environment; Energy Waste & Water; Open Data Innovators
and Inventors; Cyber Security
TSB funds generally - www.innovateuk.org/fundingsupport;jsessionid=B70572D282A5EFA40F8B31DC80CEB806.3
www.francisclark.co.uk
43. Innovation 4 Growth
SMEs and Large Companies based in the South West
Part fund R&D Projects: eligible costs incl staff salaries, materials,
equipment etc
Grants £25k to £150k (At up to 35% intervention)
Development of new or improved products, technologies, processes or
services
Job creation and/ or safeguarding
All funding to be issued by 30/4/15
Application deadline 10th March. Start with Registration Form
www.innovation4growth.co.uk
www.francisclark.co.uk
44. Other grant schemes
•
European Fisheries Fund
•
FLAG – Fishing businesses & Fishing communities
Axis 2 – Fish Processing
Energy Entrepreneurs’ Fund
•
•
Grants of < £2m
•
Innovative low carbon energy ideas
•
•
•
Opened for final £10m in January 2014
Applications judged “on their ability to cut costs of existing technologies
and the potential for future carbon savings and commercial viability”
FITs, RHI etc.
FC Blog for updates - www.francisclark.co.uk/newsviews/blog/
www.francisclark.co.uk
45. Debt..
Energy Efficiency Financing Scheme
•
•
Business trading > 36 months
•
Investment in energy efficient equipment (and renewable energy
generation?)
•
•
Siemens Financial Services and Carbon Trust
Loan e.g., Interest rate c 9% for a 7 year term loan repayable in monthly
instalments.
ReEnergise SmartEnergy Finance
•
Investment in renewable energy and energy efficient projects
•
£5m fund
www.francisclark.co.uk
47. Finance in the
South West 2014
Rewards, Debt and
Equity, but first…
Lewis Banfield - Partner
48. Structure of morning
•
•
•
•
Background and Grants (8.30am to 9.35am)
Key note speaker
SME, LEP and the ‘funding gap’
Grant schemes
•
•
•
SME experience, rewards, debt and
equity (9.55am to 11.10am)
Investment ready, business support and
closing address (11.30am to 12.35pm)
Q&A one to one / Networking (12.35pm to 2pm)
www.francisclark.co.uk
50. The Who, What, Why and How
WHO
WHERE WE ARE GOING - THE PLAN
Online advertising is now bought in
real time
Few companies in the world are able
to apply machine learning
We have built a platform to do this
Makes the best digital media
decisions in real time
SCALE + SPEED + SMARTS
275.8
127.9
38.4
0.2
5.0
Mar-14E
Mar-15E
UK
Germany
Mar-16E
New York
Mar-17E
San Fran.
Mar-18E
Hong Kong
THE HOW - KPIs & DRIVERS
THE WHY
Online advertising has failed to learn
$42bn Market
99.8% ads not clicked
>30% ads not viewed
61% traffic generated by bots
For Plymouth
STRICTLY CONFIDENTIAL
50
51. My background
Co-Founder and CFO of IO Technologies Group Ltd
20 Years in Finance with experience in Tech Startups, Investment
Banking, PE, Accountancy
In a former life:
Director of Corporate Finance at Skyscape Cloud Services
Partner at Akira Partners, London-based TMT M&A boutique
Qualified chartered accountant with Andersen’s
Key strengths:
Funding & private equity
Corporate strategy
Industry knowledge
Value creation
STRICTLY CONFIDENTIAL
51
52. Funding requirements, history and strategy
£1.4m raised to date
Date
Source
Amount
Valuation
Runway
Uses
PreMay 13
Founders
£350k
n/a
May 13
• Recruit Management Team
• Develop Plan
May 13
Round 1
F&F
£100k
+100%
Sep 13
• Grow team to 8
• Build MVP / Secure first customer
Aug 13
Round 2
HNI
£410k
+100%
Dec 13
• Grow team to 19
• Customers on platform to 4
Dec 13
PWGF 1
£100k
n/a
Jan 14
• Match Funding
• Contribution towards 12 new jobs
Jan 14
Round 3
HNI
£550k
+300%
May 14
• Grow team to 34
• Customers on platform to 12
R&D Tax Credits
Grants
£200k
£100k+
STRICTLY CONFIDENTIAL
Round 4
Round 5
Further £2.5m
Further £5m+
52
54. Stay focussed on key milestones
Clients
17
56
176
Headcount
43
67
85
ARR (£m)
£1.4m
£6.7m
£24.8m
2 HIGH VOLUME TRAFFIC
GAME ON
AND LEARNINGS
1
PREPARE PLATFORM FOR
PERFORMANCE
TOE TO TOE WITH
COMPETITION
3
Reach critical
performance
London
Dec-13
San Francisco
Jul-14
STRICTLY CONFIDENTIAL
New York
Dec-14
Jul-15
54
58. Funding and validating
local projects
Crowdfunder is the UK’s largest crowdfunding
Network.
Helping businesses, community groups and
Charities to raise funds and bring people together.
We have worked with 1000’s of projects all over
the UK and raised over £1.2m.
We are backed by Nesta’s Innovation in Giving
Fund and here in the South West by Plymouth
University.
59. The Market
What is Crowdfunding?
There are three different types of
crowdfunding
Equity
• Sell a % of your
established business for
money
• Dragons den
Lending
• Borrow money
online from lots of
people rather than
the bank
Reward
s
• Only type that builds communit
• People give money
in return for rewards
• We do rewards
based crowdfunding
60. Crowdfunding is best
explained by example
Phil from Leeds Bread wanted to setup
a co-operative organic bakery in Leeds.
The bank said he was mad, but that did
not stop him, and he setup a crowdfunder
Campaign.
He raised over £8000 from 114 people
He knew the first 30 people, but the rest were
friends of friends and other local people who
loved his idea. Great ideas spread.
The deal was simple, you put £100 into the project
and you get a loaf of bread every week for a year.
He offered the reward and people got involved.
63. Partners
Working with Partners
“Our scalable, cost effective way of reaching audience”
Crowdfundi
ng Charities
Crowdfunding
Cornwall &
The University
Crowdfunding
Food
Crowdfunding
Communities
64. Come talk
Speak to us if…
1. You have a project to fund
2. Your clients/customers have project to fund
3. You are a potential partner wanting to make a difference
4. You would like to be part of our growth
65. SWIG Finance
South West Investment Group
Call: 01872 223883
info@swigfinance.co.uk
www.swigfinance.co.uk
67. CDFI
‘
CDFIs lend money to businesses, social enterprises and
individuals who struggle to get finance from high street
banks…They offer loans and support at an affordable rate
to people who cannot access credit elsewhere…
’
A key plank of Governments’ Access to Finance Strategy
Call: 01872 223883
info@swigfinance.co.uk
www.swigfinance.co.uk
69. HOW CAN WE HELP?
We provide FINANCE to
Start up and Growth
businesses
70. Business Support
We are linked into a wide variety of business
support agencies and other sources of finance
+
Your Business
=
Business support
Business Growth
73. PEER TO PEER/CROW DSOU RCI NG DEBT
• Alternative Funding
• A Market Place to bring lenders & borrowers
together
• Varied concepts across increasing number of
Companies and Platforms
• Business loans now available
74. PEER -TO-PEER LENDI NG SEC TOR
• Began in 2005 with Zopa
• 121% sector growth in 2013
• Q4 2013- £843M lent
• To be Regulated by FCA April 2014
• UK has most advanced website platforms
• Folk2Folk 6th largest in UK
75.
76. HOW I T WORKS
• P2P Companies match creditworthy borrowers with
investors looking for competitive returns
• Loans posted onto website and auction the right to
participate in Loans
• Subscribed by multiple lenders, loan executed once
sum raised
• Website based platforms with varied models used
in assessing Loans
77. FOLK2FOLK I N T HE SOU T H W EST
• Secured Lending only
• Speed of decision making
• Auction letters of credit
• Local knowledge
• Face2Face in addition to online proposition
78. BACKG ROU ND
• Set up by the owners of Parnalls Solicitors
in Launceston
• Financial and Legal sector professionals
• Local expertise
• Quick decisions
• Personal touch
79. LENDERS B ENEF I TS
• Alternative option for their savings
• Attractive returns
• Secured loans
• Spreading risk
• Investing in the South West economy
80. B ORROW ERS B ENEF I TS
• Fast Local decision
• Any purpose
• Interest Only
• Flexible
84. OUR BROAD CRITERIA – WHAT ARE WE LOOKING FOR?
Not start-ups.
At least 3 years of
financial history
Annual turnover
£0.5m – £25m
Track record of
operating profitability
and cash generation
Proven management
teams with ambition
Privately owned
businesses rather than
Private Equity backed
Demonstrable Growth
in a combination of
sales and / or profits
85. AREAS WHERE GROWTH CAPITAL SUITABLE
Expansion projects to
drive rapid growth
Funding of proven rollout concept
Investment in New
Product Development
Investment in sales &
marketing overhead
for new products /
areas
Acquisition funding
support
Capex investment to
support growth plans
86. OUR GROWTH CAPITAL PROVIDES KEY BENEFITS TO
SMEs
Debt offering - No
warrants and no
dilution of equity
Enhanced debt
capacity - Cash flow
lend not limited to
tangible security
Preserves cash Interest only. Cash
interest is L+5%.
Rolled interest of 5%
No prepayment
penalty fees Provides flexibility on
term
Full banking and
security - No
automatic requirement
for PGs
Access to
Breakthrough
programme Additional support
87. BREAKTHROUGH PROGRAMME – NOT JUST FUNDING
The Breakthrough programme will invest £200 million in fast-growth SMEs, supporting local enterprise and community
initiatives, creating jobs, inspiring entrepreneurs of the future and turbo-boosting a private sector led economy
1. Breakthrough Growth Capital
Santander has up to £200 million to invest
in fast-growth SMEs turning over between
£500k – £25m across the UK. The
investment programme will run over the
next 3 – 5 years and invest in up to 200
SMEs.
4. Breakthrough Talent
Santander has launched an online portal for
SMEs participating in the Breakthrough
investment programme to access the best
student and graduate talent across our
partner University network – including
Universities in Scotland.
2. Breakthrough Live
Santander is running regional Breakthrough
Live conferences for fast-growth SMEs.
Working with Santander Universities the
Breakthrough Live conferences bring
together leading entrepreneurs to share
experiences.
5. Breakthrough Responsibly
In keeping with our focus on responsible
business, Santander has launched a
number of initiatives to encourage more
responsible and inclusive business practice
and to invest in Social Enterprise
development.
www.santanderbreakthrough.co.uk
3. Breakthrough Masterclasses
Santander is running a unique experience
programme for fast-growth SMEs that takes
them behind the doors of the world’s most
iconic and best fast-growth businesses, to
learn first hand how they did it – real
experience to help their own growth journey.
6. Breakthrough International
This initiative will help SMEs participating in
the Breakthrough programme to reach new
overseas markets if their growth plans and
ambitions are beyond the UK. It includes
subsidised trade missions, educational
roadshows and support accessing
information on exporting.
88. SOME OF OUR GROWTH CAPITAL INVESTMENTS
Communications Technology
Completed July 2012
£1m Growth capital loan
10 new jobs
Vet Practices
Completed July 2012
£1.25m Growth capital loan
120 new jobs
Software
Completed March 2013
£0.5m Growth capital loan
14 new jobs
Legal Services
Completed January 2013
£1.1m Growth capital
20 new jobs
Software
Completed January 2013
£0.5m Growth capital loan
6 new jobs
Engineering
Completed September 2012
£0.4m Growth capital loan
20 new jobs
Healthy Fast Food chain
Completed May 2013
£0.7m Growth capital loan
50 new jobs
Telecommunications
Completed March 2013
£1m Growth capital loan
50 new jobs
Healthy Fast Food chain
Completed March 2013
£1.25m Growth capital loan
150 new jobs
Software as a service (SaaS)
Completed April 2013
£0.5m Growth capital loan
14 new jobs
Media services provider
Completed April 2013
£0.7m Growth capital loan
15 new jobs
Women’s clothing e-tailer
Completed September 2013
£0.7m Growth Capital loan
30 new jobs
Cleaning products
Completed September 2012
£0.85m Growth capital loan
5 new jobs
Thai restaurant chain
Completed September 2012
£2.4m Growth capital loan
90 new jobs
89. THANKYOU
PETER ABEL, DIRECTOR
SANTANDER GROWTH CAPITAL, SOUTH WEST
Tel: 07809 493791
Email: peter.abel@santander.co.uk
Website: www.santanderbreakthrough.co.uk
……a bank for your ideas!
90. Equity – why
even Boris is
talking about
it..
Nick Woodmansey –
Corporate Finance
Senior Associate
91. Equity
Who is talking about it?
• Francis Clark
• CBI – “Slice of the Pie – tackling the
under-utilisation of equity finance”
• Boris Johnson - “The real opportunity for
Britain is to move away from just bank financing
towards equity financing of all kinds, to try to get
private investors to put money into startups - so
that you're not relying on the banks who've not
traditionally been brilliant.”
www.francisclark.co.uk
92. Background to equity
•
Why equity?
•
•
Ambitious growth
•
Lack of security
•
•
In banking terminology – an equity proposition!
Lack of track record
More than just the initial money
•
Drive growth
•
Mentoring & discipline
•
Introductions
•
Further capital
www.francisclark.co.uk
93. Structuring equity investments
•
Cash investment made into:
•
•
•
Shares
Loans
Required return
•
20 to 40% IRR (annual yield)
•
3 – 5 x cash multiple
•
Majority of the equity return is on exit
•
Portfolio return is lower
www.francisclark.co.uk
94. Enterprise Investment Scheme (‘EIS’)
•
Investor income and capital gains tax relief
•
Unquoted
•
Unconnected
•
Minority stake
•
But there are exclusions!
•
Watch compliance!
•
Two formats
•
EIS
•
Seed EIS
www.francisclark.co.uk
95. Enterprise Investment Scheme
Investment limit
EIS
£1,000,000
SEIS
£100,000
Investment timeframe
3 years
3 years
Income tax relief
30%
50%
Capital gains tax on sale No tax charge
No tax charge
Reinvestment of
previous gains
Exempt gain
Loss relief
www.francisclark.co.uk
Defer tax
Against personal tax liability
96. Sources of, and/ or, routes to equity?
•
Friends, Families and Fools
•
Virtual Networks - e.g. Crowdcube
•
Angel Networks - e.g. SWAIN
•
Venture capitalists and Private Equity
•
Active in SW include
www.francisclark.co.uk
97.
98. The problem
“Q1 2013 showed the lowest ever level of use of
external finance by SME’s” – SME Finance Monitor, Aug ‘13
“Access to finance is a “major barrier” to growth for
more than one in five small companies” – FT, Mar ’12
“Less than one in five SME’s have attempted to
raise finance in the last year – with 40 per cent of
applications rejected” – RealBusiness, Sept ‘13
99. The solution
Crowdcube is the world’s first and leading equity crowdfunding platform
giving entrepreneurs a new way to raise investment
Fully authorised and regulated by the Financial Conduct Authority
101. Success so far
£19 million
Stage of Growth
funded so far…
>60,000
members
£2,800
By Category
£180,000
average investment
average deal
£1.9 million
biggest deal
£250,000
largest single investment
Successfully
funded deals
95+
103. What are the benefits?
New way to raise finance
Financial return
UK wide investor reach
‘Armchair Dragon’
Easier to promote
Support friends and family
Cost effective
Participation
Marketing effect
Lower/spread risk
Crowd feedback
Simple to invest
109. Statistics
Deals done by sector
11%
18%
5%
17%
Cleantech
Food/drink
IT
24%
Manufacturing
Media/comms
8%
Medical devices
Service
17%
Copyright SWAIN 2013
110. Stats
10 years
103 companies financed
144 rounds of funding
£75m raised in total
Failure rate 29%
Ytd to March 2014
15 deals
£1.1m
4 more completions anticipated
Copyright SWAIN 2013
112. Key features business angel activity
• Personal – preferably regional
• Confidentiality
• Understand more complicated
businesses
• Add value
• Provide support
• Will follow their money because
of the relationship which has
been established
Copyright SWAIN 2013
116. Why do investors invest?
1. To make a return
2. To participate and
contribute
3. Because returns are
poor elsewhere
4. Because they get tax
relief
Right product; right
people
Add value
129. The Reality
We’re quite normal – but there is a big variety
We’re focused on growing value
We can bring expertise, further cash, opportunities
and contacts
We have some rules, but can be extremely flexible
Not every company is suitable
5
130. A Few Aspects
o Expertise: Varies by type of PE House
eg sector specific
eg issue specific
o Rules:
Information & Data
Behavioural
Ultimately relationship is key
o Flexibility: Cash In/Out
Minority / Majority
Management In / Out / New
Higher Risk / Steadier Returns
6
131. Piper
We Invest in consumer brands
Retail, Leisure, Consumer Products & Services
£3m to £15m
Passionate about brands
7
132. Our Track Record
Delivered diet company
Latin American restaurant chain
Family clothing catalogues
Luxury handmade rugs
Beach and resort clothing for men
Cocktail bar chain
Casual clothing brand
Sports nutrition products
Adult soft drinks
Food Service brand
Travel clothing retailer
Womenswear catalogue for over 45’s
Chain of Caribbean restaurants
Luxury footwear
Upholstered furniture retailer
Bar chain
Burger restaurant chain
Café / bar / restaurant chain
Exam revision specialist
We have an excellent track record and have developed deep sector knowledge in each of
these markets
Passionate about brands
8
133. What Piper Looks At
We look at:
The Consumer Proposition
Team
Growth
Exit
9
136. BGF
About us
Long-term growth capital for UK companies
£2.5bn of capital from five of the largest UK banks
Long-term business builder through expertise as well as
capital
Independent, quick and autonomous decision making
90+ staff, 7 regional offices, local deal origination, execution
and support
Growth Capital Investors
137. Investment Criteria
Long-term growth capital for UK companies
Established UK companies with sales of c. £5 – 100m
Businesses with past and potential future growth
Capable management team
£2-10 million equity requirement (per funding round)
Minority equity stakes
Growth capital funds can be used for:
Acquisitions, working capital, R&D, capital investment,
overseas expansion
Some “cash out” to shareholders but this must be less than
50% of the BGF investment
Generalist sector focus but excluding:
Property investment and development; Some regulated
financial services businesses; Some on ethical grounds
Growth Capital Investors
139. BGF
Why are we different
Focus on growth capital for SMEs
Flexible, long-term view on exit
Flexibility on investment structures
Minority investor and partnership approach
Regional office network
Huge network of experienced business leaders to support
growth at board level
Focused diligence process and sensible investment timelines
Growth Capital Investors
141. Finance in the
South West 2014
Investment ready,
Business support and
closing address…
Lewis Banfield - Partner
142. Structure of morning
•
•
Background and Grants (8.30am to 9.35am)
Key note speaker
SME, LEP and the ‘funding gap’
Grant schemes
•
•
•
SME experience, rewards, debt and equity
(9.55am to 11.10am)
•
•
Investment ready, business support and
closing address (11.30am to 12.35pm)
Q&A one to one / Networking (12.35pm to 2pm)
www.francisclark.co.uk
145. The Readiness Process
• When, why and what funding is needed
• Communicating the business proposition Business plan and projections
• Viable plan and credible management
• Building the relationship
www.francisclark.co.uk
146. Investment ready – housekeeping
• Compliance and Legal
Licences / contracts/ legal title?
IPR ownership in the company?
Statutory Accounts/management accounts
VAT, PAYE/NI, Books and records in order?
www.francisclark.co.uk
147. Requirements: Grants
• “Project” eligibility – sector, size, location…
• Timescale – prescriptive, process and panels, not
retrospective
• Match funding
• ‘Need for grant’ versus viable proposition
• Other factors - Environment, Equality, on going
requirements
www.francisclark.co.uk
148. Requirements: Debt
• Serviceability & Headroom
• Security / Personal Guarantees
• Conduits for government initiatives
• Covenants – achievable / appropriate?
www.francisclark.co.uk
149. Requirements: Equity
• Exit route and returns to the investor
• Investors expertise vs. loss of
independence?
• Be prepared to discuss valuation
• Be aware of FSMA regulations
www.francisclark.co.uk
150. Investor Ready - Conclusions
• Appropriate funding / understand the funder
• Business Case
• Plan B?
• Know the ‘deal breakers’ – due diligence
• Build in extra time
www.francisclark.co.uk
153. Structure of a business plan
•
•
•
•
•
•
•
•
•
•
•
Front cover
Contents
Executive summary
Background to the business
Products and services
Customers and markets
Business operation
Management
Financial history
Financial projections
Appendices
www.francisclark.co.uk
154. Projections: the perfect scenario
•
Monthly integrated profit and loss, cashflow and balance
sheet covering a period of three years
•
Documented assumptions
•
Ability to sensitize the model
www.francisclark.co.uk
155. Projections: the real world!
•
Choose an approach that works for the business
•
Focus on the KPIs of the business
•
Make basic assumptions
•
Compare to actual results
www.francisclark.co.uk
156. Common issues
•
Inconsistencies between Business Plan (narrative) and
Projections (figures)
•
Profit ≠ cash
•
Do not forget about tax (VAT and tax on profits)
•
•
Match funding to cash requirements, business model &
exit strategy
Read through documents ‘cold’
www.francisclark.co.uk
159. “I want to grow my
company, but.......”
"My bank won't
support me with my
funding
requirements“
"I haven't had to
raise finance before
- what are my
options?”
1
"I want an investor
who will bring in
expertise and
contacts”
“My bank want me
to factor – is it the
best option?”
160. Eligibility?
•
SMEs only - less than 250 employees, £40m turnover
•
Ambition to double in turnover, profits or employees in 3
years
•
Registered in England
•
Independently owned
•
Any sector
Access to Finance
18th December 2013, Tortworth Court, Bristol
July 2013
161. What makes this service unique?
1.
This is a Selective Service, only for those with the ambition
to double in the next three years
2.
It is Personalised to Address Your Business Challenges
3.
It is the UK Government Investing in High Growth
Businesses, delivered by a consortium of private sector
partners
4.
It use commercial, experienced coaches (800 across the
country – 200 specialist Access to Finance)
5.
Access to Finance
The service is focused on Results
18th December 2013, Tortworth Court, Bristol
July 2013
162. Progress to date?
1.
Worked with over 11,000 high growth businesses across
England
2.
Raised finance for a wide range of companies in the SouthWest – ranging from: traditional debt, invoice finance, asset
backed RDF, matched funded TSB, angel (traditional and
crowd), funding circle and VC
Access to Finance
18th December 2013, Tortworth Court, Bristol
July 2013
163. Scope of the service
Core support
Current position
Review of your
business.
Business diagnostic.
Establish eligibility
and suitability.
Review coaching and
package of support.
Access to finance
require a reasonable
business plan to be in
place
Masterclasses
Access to finance support
Funding
Investment readiness
Introduction
requirements
Fine tuning of business plan
Agreeing priorities and
Debt or equity (angels, Developing thoughts in line
schedule for introductions
crowdfunding,
with appropriate
Introductions to up to
networks, syndicates, masterclasses
three sources of finance
banks, specialist
Agreeing the opportunity note Liaising with Investment
financiers, VCs…)
and the pitch proposition
relations team
Review suitability of Identifying gaps in the due
Hand over to corporate
business plan
diligence
finance advisor / lawyer as
Agree finance action Reviewing on-going
appropriate
plan
professional support
MC1: Understanding finance - To understand advantages/disadvantages of
alternative sources of external finance
MC2: Preparing for finance - To craft a strong ‘pitch’ to increase your success of
accessing external finance
MC3: Closing the deal – Legal and Valuation - To maximise your ability to complete
a financing deal
Post funding
Connectivity
On going
leadership and
management
training
Leadership &
Management
£2000 matched funding towards leadership and management training per senior manager.
Can be effective in developing the management teams ability to further develop the investment
proposition (i.e. marketing plan, financial planning etc.)
Also available post investment to help develop management capacity
Investment
relation team
Fast track
workshops
Provides additional information on relevant VCs, banks, angel syndicate and
networks. Also providing feedback on your opportunity note
The fast track w/s programme is an intensive series of workshops backed up by
one-to-one coaching that gets you ready for finance and helps to put you in front
of investors and other sources of finance (micros and start-ups)
Access to Finance
July 2013
164. What do I do next?
Contact me:
Bruce Colley
Access to Finance
b.colley@oxin.co.uk
18th December 2013, Tortworth Court, Bristol
July 2013
07436 108297
166. GAIN…
• Is a network of business service providers
dedicated to raising awareness and
increasing take-up of the support
available
• Adds value to, and does not duplicate,
existing networks and business support
www.gaininbusiness.com
167. Helping business find the right
support…
• GAIN Business Engagement Service
– A phone / e-mail based light touch diagnostic,
signposting and brokerage service for any
business
• The GAIN Digital Exchange
– gaininbusiness.com
Both to be launched in April 2014
For more information - 0800 052 5600
www.gaininbusiness.com
168. Flexing provision and filling gaps
MAS for marine
Innovation Vouchers
Start Up Support
Export Support
Programme / Web
fuelled
Enhanced FDI
Finance Partnership
www.gaininbusiness.com
173. UKTI
Support to........
• Develop an export strategy – Passport to Export (£3,000), Gateway to
Global Growth (£3000)
• Undertake market research (including identifying potential partners) –
EMRS (50% match), OMIS (subsidised)
• Visit & develop new export markets – MVS (£200-£850)
• Improve international communications: website, email, languages &
culture – ECR (subsidised), ECR EV (£3000)
• Exhibit overseas – TAP & TAP SOLO (£1,000 to £2,500)
• Carry other marketing and sales development activities - European
funding (ERDF) (£1,000 to £30,000)
www.francisclark.co.uk
174. Business Growth Vouchers
•
•
•
•
•
Up to £2,000 support (50% match funded)
5 categories of support:
-
Managing cashflow, late payments and negotiating finance
Developing skills and taking on staff
Improving Leadership and Management
Marketing, attracting and keeping customers
Making the most of digital technology
FC registered for the first point above
http://enterprisenation.com/marketplace
https://www.gov.uk/apply-growth-vouchers
www.francisclark.co.uk
176. Finance in the
South West 2014
Thank you
and please network
Lewis Banfield - Partner
177. Structure of morning
•
•
•
•
Background and Grants (8.30am to 9.35am)
Key note speaker
SME, LEP and the ‘funding gap’
Grant schemes
•
•
•
SME experience, rewards, debt and equity
(9.55am to 11.10am)
Investment ready, business support and
closing address (11.30am to 12.35pm)
Q&A one to one / Networking (12.35pm to 2pm)
www.francisclark.co.uk
178. Summary
•
•
•
•
•
SMEs – the country needs you
SW a great place to do business
Some great businesses in the SW
Confidence?
Funding and support – options
•
Thank you
www.francisclark.co.uk
179. Network: there are here to speak to you
…and many more
www.francisclark.co.uk
180. Disclaimer & copyright
(c) copyright Francis Clark LLP, 2014
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