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YABA and Hull Bondholders Accessing Finance 1 st November 2011 Susanne Gilbert YABA Ambassador North & East Yorkshire, North & North East Lincolnshire. What do Business Angels want?. Sectors/types Business plans Valuation/percentages/returns Deal structures Angel inputs Exit routes - PowerPoint PPT Presentation
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YABA and Hull Bondholders Accessing Finance
1st November 2011
Susanne Gilbert
YABA AmbassadorNorth & East Yorkshire, North & North East Lincolnshire
What do Business Angels want?
• Sectors/types• Business plans• Valuation/percentages/returns• Deal structures• Angel inputs• Exit routes• Returns
The trouble with business plans!
Usually what’s promised What gets delivered
Greater upfront due diligence = more-successful investments
Usual minimum• Right to appoint a director, as a group, or individually• Limits and consents• Rights to information (how much and when)
– Monthly management accounts– Draft budgets at least one month prior to year– Audited annual accounts– Rights of remedy if requests are not heeded
• Non-compete clauses• Confidentiality
Involvement?
What they want What they often get
Angels and exits• Consider before entering the deal• What are options for exit?
– AIM float - only small %age, not always a real exit– Trade sale - more likely, grooming needed, timing vital– MBO - may lead to break down in relationships
• EIS term – will it really be worth holding out?• Is there more potential to grow?• Is this enough return?• Finally - any exit really has to suit the founders
Which Angels are more successful?
• Previous entrepreneurs (no surprise!)• Portfolio Angels
– 2 essential, 5 minimum, 10 good• Angels with industry expertise• Much better returns if on the board • Active Angels = bigger deals and higher
returns, less likelyhood of failure BUT• if the Angel gets too involved in the business
returns are likely to be much lower.
Which Angels are more successful?
What can YABA offer
in
Yorkshire & the Humber?
Yorkshire Association of Business Angels
• Founded 1995• Not for profit• Supported by Yorkshire
Forward• Over 190 Angel Members
and Associates• Bi-monthly Investment
Forums across Yorkshire
What does YABA offer Entrepreneurs?
EXPERTISE+
YABA for Entrepreneurs
• Circulation of opportunities via e-mail & on-line
• Access to over 135 business angels who wish to invest in Yorkshire businesses
• Unique combination of funding and expertise• Presentation opportunity at bi-monthly
investment forums & sector forums• Access to mentors and NEDs• Supported by a network of associates
How much does it cost?
Cost for Entrepreneurs
• No success fees or charges on deals• £55.00 for circulation of executive summary to
all members• £130.00 to present at Investment Forum
– Includes proposition enhancement workshop
What does YABA offer Business Angels?
What does YABA offer Business Angels?
• Access to new investment opportunities• Review opportunities at bi-monthly
investment forum & sector forums• Networking with other angels through
exclusive social events• Angel master classes• Opportunity for syndicate investment• Joining and annual membership fee
Sectors and Types of Business
• No single type, all stages, all sectors– What they understand– What they like the look of– What others are interested in
• Pre-starts – for the brave, add credibility?• Start-ups – can Angel open doors?• Growth – add governance, discipline?• Turnarounds – timing and input needed
Shopping List• Compelling customer/market proposition• Strong, defensible IP• Basis of management team – qualities/mix/experience• Personal commitment – foregone, investment, effort• References - customer need, trials, user belief• Tactical plans, prospects pipeline, international view• Potential for minimum 10x growth over 5 years
What do Angels usually add?• Time
– Nearly always part-time, often flexible role– Usually NED or mentor
• “Putting something back”– Feel-good factor can be a motivator
• Skills and experience– Add credibility– Like to fill gaps, add market knowledge– Technical skills – e.g. finance, law, etc– Strategy, governance, exits
Which Angels are more successful?
Does it work?
• £5M business angel investment and resulting leveraged investment in Yorkshire and the Humber over the last 3 years
• YABA has been conduit for £21 million of investment in companies across the region creating over three hundred jobs in these investee companies over the past 10 years
YABA and the Professional Community
Questions?www.yaba.org.uk
Next Forum – York 15 November