Hui a Tau29 & 30 September, Queenstown

FUNDING

Phil Broughton and

Stephen Craig-Pearson

Business Funding

• Main types

• Funding Stages

• Equity Funding

• Debt Funding

• Q&A

Types

• Grants

• Suppliers

• Debt

• Friends/family - equity

• External investors - equity

Funding Stages

Stage 1Start Up

Stage 2Early Stage

Stage 3Growth

Stage 4Maturity

Grants – total or subsidised

e.g. – Enterprise Allowance– Poutama – Local Economic Development– Central Government– MWWL

Trade CycleTrade CycleCash

Purchase materials

Manufacturing

Inventory

Sales

Debtors

Time line

between stages (Days)

External Finance

Asked Received

Debt 34% 96%

Equity 6% 76%

Did not seek finance

64% -

Debt Finance

• Low cost

• Flexible

• No dilution and minimal control

• Repayment ability

• Security

Applying for (Debt) Finance

• How much and why

• Owner’s contribution

• Business Plan

• Profitability

• Security available

• Key issues - Understand & Have a Plan

• Communicate well - proactive, reporting, no surprises, initiate meetings

• Give the Bank every chance to advocate for you as their client

• Understand the credit process

Types of Debt Finance

• Banks

• Finance Company

• Leasing

Equity Investors

• Enables growth

• Skills and experience

• Transaction costs: legal and due-diligence

• Return expectations vary

• Dilution of voting rights

Becoming an Attractive Business

• Personal Qualities

• Business Qualities

• Product/Service Quality

Business Funding

• Grants

• Internal – creditors and profitability

• Debt – security / cash flow

• Investors – self/friends/family & external

Questions

Thank you