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Presentation delivered at the Business Slide show to Entrepreneurs looking to raise finance for their business.
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What’s the process?
What’s the stor
y
•Think through your story
•Define in as much detail as you can what you are looking to achieve and why.
Building
your
plan
•Build a business plan
• Document your strategy so it can be easily communicated to potential investors.
Selling you
r plan
•Sell your vision
•Identify your potential sources of funding and sell your plan.
Closing the deal
•Close the deal
•Agree the terms and get good advice.
What’s the story
Vision
Opportunity
LandscapePeople
Execution
?
Importance of execution
Prospects to Cash
Targeting Marketing Selling Deliverin
g Invoicing
Targeting
Who is my target customer?– Type of organisation– Type of individual– Motivation for purchasing
How many potential prospects?– Market size
What do I know about them already?– Using a competitor– Interests
Targeting
Marketing
Which are my most effective channels for marketing?– Online?– Direct?
What is the cost of a lead?
How many leads convert into a sale?
Marketing
Selling
Sales Effectiveness – How many deals can a sales person close in a
period?– Who are my best sales people?– What’s my cost of sale?
Competition– Who are my competitors?– Why are we winning/losing?
Selling
Delivery
Cost of Delivery– Gross margin & profitability?
Time of delivery– How long from Order to Invoice?– Can it be quicker?
Delivering
Have an execution plan
Targeting Marketing Selling Deliverin
g Invoicing
Prospects to Cash
Understand the Metrics!
Build your plan
Detailed business plan– Vision, Opportunity, Market Landscape, People,
Execution– Investment opportunity & ROI– Exit Strategy & Valuations (Comparisons)
Financial Model– P&L, Balance Sheet, Cash flow, Key Metrics
Executive Summary– 3 pages!
Angel Investors
High Net Worth Individuals
Often experienced & successful business people
Typically invest between £10k – £500k per investment
EIS qualification is often very important
Enterprise Investment Scheme
A Government scheme to encourage people to investment in small businesses
Key benefits– Investors can get 20% income tax relief– Investors can get 40% capital gains roll-over relief– Qualifying gains can effectively be tax free
There are rules– You need to be a qualifying business– You can only raise £2m at a time– There are more rules...
http://www.hmrc.gov.uk/eis/
Find Angels
Where can I find them?– Angel Networks (www.bbaa.org.uk)– Your Networks
Lawyers, AccountantsFriends & Family
What do Angels want?– Equity stake – normally ordinary shares– To see a return on their investment– To back great teams
Passion, enthusiasm, drive, expertise– Involvement
Board seat or Advisory role
Venture Capitalists
Professional Investment firms– Money from Pensions, VCTs, other institutions– Funds have sizes and a life cycle
Typically have investment criteria– Stage: Seed, Early Stage, Growth Stage– Sector: Cleantech, IT, Life Sciences, etc– Geography
Investment sizes reflect stage– Seed £500k - £1m– Early Stage £1m - £3m– Growth: £5m+
Finding VCs
Where can I find them?– European Venture Capital Association -
www.evca.eu– British Venture Capital Association -
www.bvca.co.uk
What do VCs Want?– Equity Stake, maybe debt
Focus on Internal Rate of Return (IRR)– Preference shares (different rights)– Board Seat – with a fee– Often syndication
Third Party Advisors
Benefits– Network of contacts– Can organise road show and manage process– Sounding board to validate plan– Negotiate terms
Downsides– Cost (% of funds raised + retainer)
Look for track recent track record and references
Closing the deal
Get good legal advise!
Benefits & Issues
Benefits
Investment capital
Dispassionate advise
Your increased professionalism
Credibility
Issues
Managing shareholders
Risk of different views
Change is shareholders status or strategy
What’s the process?
What’s the story• Think through your story• Define in as much detail as you can what you are looking
to achieve and why.
Building your plan• Build a business plan• Document your strategy so it can be easily
communicated to potential investors.
Selling your plan • Sell your vision• Identify your potential sources of funding and sell your plan.
Closing the deal • Close the deal• Agree the terms and get good advice.
Any Questions?
