Finance in Cornwall - 10 May 2016 (Segment 3)

PowerPoint Presentation

Finance in Cornwall 2016

Richard Wadman - DirectorCornwall, we have lift off!

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Structure of morningBackground, EU calls, grants and Banks (8:30am to 9:50am)LEP, Cornwall Chamber, FSBGrants and Banks (intro)Funding and Business Support stratified by age of business (10:10am to 11:20am)Equity, Business Support and Company presentations (11:40am to 1pm)State AidCrowdcube pitch.. Q&A one to one/ Networking (1pm to 2pm)

pkf-francisclark.co.uk

Of general interest

Company presentations Business AngelsCrowdfunding - equityPeer to Peer (secured)Business Support x 2State AidInvestment Ready

Networking

Ben Treleaven

April 2013

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May 2013

April 2014

September 2014

November 2014

January 2015

September 2015

January 2016

Business AngelsRob Misselbrook

IntroductionPrivately owned company that helps its clients:Raise Capital an integrated approachEstablish client/sales relationshipsDevelop robust sales opportunities

Hard Cash

Active in all sectors, focus on Digital Economy, Marine Tech, Agri Tech, E-Health and Aero

Three Main Funding SourcesMylor Ventures Angel Network (MyVAN)and/or.Crowd (Crowdcube, Funding Circle)and/or.Grants

[VCs EBITDA>0.5m]

MyVAN (member of UKBAA)Businesses withStrong Value propositionsLarge marketsIntellectual PropertyCredible ManagementCapital EfficientEIS/SEISWillingness to let Angels participate[NED Register]

MyVAN ref Crowd & GrantsCrowd (Fixed timeline)Pump priming (MyVAN)Detailed preparationAlongside corporate/VC/PEGrants (Non dilutive)When availableRD&ICornish approach

What Angels Look for - PreparationInvestment Readiness ToolkitTemplatesIMs, Models, PresentationsDocumentsNDAs, Contracts, SH AgreementsPoliciesProcurement, Ethical, EnvironmentalAdvisory or Light TouchIts always a buyers market but good companies well prepared always get funded

Process - DeliveryMyVANApply at www.mylorventures.co.uk/angel-network/Investment Readiness (1 2 months)I pager yes/noMeetings/SkypeAgreement/ParticipationExecutionCrowd note timelineGrants non dilutive

[email protected] 282106

RICHARD ECKLEYSenior Investment AnalystEquity Crowdfunding

There are alternative front slides available depending on how professional/low-key the audience is. Use the New Slide option on the Home tab of the tool bar.28

The Power of the Crowd

We believe in the power of the crowd & in the democratisation of investment. Equity Crowdfunding fundamentally serves to allow any business to raise investment from anyone, and for anyone to invest in any business.

The principle of crowdfunding is that lots of people can contribute small amounts of money

Equity crowdfunding sits within the alternative finance space though as well see later on, its become more than just an alternative

Has anyone raised capital via crowdfunding. Has anyone invested in a business via a crowdfunding site?

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Why Crowdfund?

Global Investor ReachCost effectiveMarketing effectCrowd feedbackExpertiseFair TermsFinancial returnArmchair DragonSupport friends and familyAccess exciting investmentsLower/spread riskSimple to invest

Why do People Use Crowdfunding:For Entrepreneurs Gives you global investor reach, and its cost effective both in terms of expenses and time. Average investment round we hear is around 8 months. With us. from application to cash in the bank it should be a little over 2 monthsMore than that the marketing effect remains key on average businesses that raise money through crowdfunding will see a 3-fold increase in sales through the heightened awareness

For investors ease of access to venture stage investment before crowdfunding, this was the preserve of hnws now ANYONE can access. Investors tell us that as well as financial returns (and we have now seen returns last year we saw the first two exits to generate returns for investors), they want to back great british businesses that interest them over 25% are interested in helping in an advisory capacity30

How it works more than anything this is an exercise in awareness raising if entrepreneurs go out with the objective of connecting as positively as possible, with as many people as possible, they cant lose. This take the form of traditional networking as well as email, social media, digital advertising, can take the form of print/outdoor media as well.

Like all platforms we provide an online pitch page the shop window. which allows you to present information through a video, text and images31

Text & images explaining what you do, why youre awesome, whos behind itDocuments financial forecasts, full business plan32

Theres also a forum both for updates broadcast by the founding team, and discussions. This is all about creating dialogue.

In this respect, crowdfunding is a little different to other methods of fundraising this is public. Trial by crowd.

This means that if someone asks a tough question how did you arrive at your valuation is a common one and their answer is poor, the crowd will let them know. Similarly, entrepreneurs who communicate openly and effectively are handsomely rewarded.

So As I say - crowdfunding is fundamentally an exercise in awareness raising, and that awareness can be tied into other activity Just park were hiring and had 2000 job applications in a week whilst live, compared to around 100 in the month prior. GripIt last week received 3 times the number of commercial enquiries than normal.Typically 3 months start to endLike most fundraising activity, it takes time and effort, but a lot of entrepreneurs, particularly those who have raised before through other means, compare it to a sprint rather than a marathon efficient use of time and resources, delivering cash, marketing, awareness, an army of brand advocates and valuable expertise and introductions. All starts with a simple application on our websiteWe have inhouse lawyers and financial experts to call upon where necessary both structuring and due diligence Work with you on marketing planning networks and investorsWrite your pitch and create your videoWell make due diligence as easy as possibleWe work with you on finalising paperwork and agreements, issue share certs and EIS certsInvestor Relations PortalFees only on success interests totally aligned. If we take you on, our mission is to see you fund. We work with around 10% of the businesses we speak to.

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The Evolution of Success

In terms of the types of business that have successfully used crowdfunding were sector agnostic, though the easier to understand and the more exciting the business, the easier it is to crowdfund fundamentally, there needs to be a crowd that might be interested in investing, and there needs to be a way of getting to them.

This means that historically businesses in Food & Beverage & technology have tended to do well

Eden project raised 1.5m in a matter of hours

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GripIt backed by Deborah Meaden and the most successful Dragons Den Business - 2m in 5 days. Its a plasterboard fixing!

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Innovation Makers - Marcus and Samantha - 179k and 439k from prototyping & patenting to manufacturing in China and international orders first shipments are landing this summer36


Shericks shakes Andy was a buyer for M&S he knew his milkshakes. Came to us and raised 279k now in waitrose, Selfridges, harrods and are rebranded as M&Ss own label37

In terms of what weve seen in the wider finance industry - growth. In 2015, 80% of seed deals were crowdfunded, and over 60% of venture deals38

52% UK MARKET SHARE

As for where Crowdcube sits within that we have over 50% market share39

TOP INVESTOR

#1 FOR SEED STAGE DEALSTOP INVESTOR

#1 FOR VENTURE STAGE DEALSTOP INVESTOR

#1 FOR LONDON DEALS

BEAUHURST REPORT MAKING SENSE OF UK EQUITY INVESTMENT 2014/15

In Beauhursts 2015 report, we were found to be the most active equity investor in Europe, as well as #1 for seed deals#1 for venture deals#1 for London deals40

160 MILLION +Successfully raised

Weve raised a lot of money

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399Successful raises

For nearly 400 companies42

41%35%24%

Companies at varying stages of Growth43

1,000,000Largest single investment

3,700,000Biggest deal

366,239Average deal

2,500Average investment

65%Pitch success rate

250,000Average monthly sessions

I wont go through all this data but I will point out that the largest single investment was made at 10 minutes to midnight, from a mobile phone. 44

280,000+Investor community

Who invests via Crowdfunding well theres a lot of them as of this morning just over 280,000 in our community

And Its growing over 100,000 joined Crowdcube last year we assume a similar growth rate across the industry

Graph number of people joining

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3%1%2%14%5%17%47%6%3%3%Our investors

What do we know about them? Our investor base covers over 90 countries. Around 64% our investors are in London and the SE, the SW has the greatest concentration afterwards.46

DIVERSE COMMUNITY

Theyre a diverse age range certainly more diverse than youd typically see in traditional early-stage investment over 60 % of investors are under the age of 44

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70,000Annual salary59%Investment from high net worth & sophisticated investorsTechnologyMarketingFinancial ServicesManagement ConsultingVC and Private EquityTOP JOBSTOP 5

investor employers

Theyre serious people the crowd have had a bad rap over the years some even described them as dumb money we know theyre smart, well paid, well educated, and work for respectable firms. A recent study by LSE shows that they make economically rational decisions akin to institutional money. Theyre also experienced around 50% of investors have held the title of CEO, founder or director at some point.

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The FutureCollaborations will be a regular occurrenceProfile of Crowdfunding will be raisedThe Crowd will become a pre-requisite for future funding

In terms of the future Id like to offer 3 predictions:

Profile deals will get bigger, collaborations will become more prominent, more investors will see returns, businesses will fail though whilst wed expect 30-50% of businesses to fail in the first 3 years 85% of businesses funded by Crowdcube are still in operation

Collaborations were seeing more and more collaboration whether thats Santander & Funding Circle or Metro Bank & Zopa Crowdfunding is alternative, NOT replacement, and the industry wants to work alongside the existing players to build a more fertile enterprise landscape

The Crowd will become a pre-requisite for future funding Just as crowd investors draw comfort from safety in numbers and proof of a businesses market fit though crowd validation, we can see this becoming something of a pre-requisite in the traditional investment space, particularly for b2c businesses we expect the question of why havent you crowdfunded to become normal in investors

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Richard EckleySenior Investment Analyst@re_crowdcubewww.crowdcube.com@crowdcube

THANK YOU

Thank you, love to talk to you afterwards if youd like to know more

Id now like to introduce Andrew Finley of Oxford Innovation50

Business Coaching Andrew FinleyStakeholder & Relationship Director

OI delivered the Coaching for Growth Programmes during Convergence 2009 - 2015Collaborative working with other projectsFocus on innovative new methodologies

History

The New ProgrammesCoaching for Growth C4GCornwall Business Start Ups CBSLearning from the Convergence projectsPartnership with Unlocking Potential

What's New?Additional sectors can be supportedGraduate placementsStage Gate processSeamless support from Pre-trading to mature businesses

What Remains the Same?Highly experienced Commercial CoachesBespoke engagementsInteractive workshopsChallenging and transformational

Andrew Finley

[email protected]

Presented by: Matt Borne09/05/16

Cornwall & Isles of ScillyGrowth Hub

What is it?Single point of access for businesses to local and national business supportWebsite Navigators/Connectors Business support partnersIn depth diagnostic of client businessDetailed understanding of business support servicesIntelligent and effective signposting

To be the best Growth Hub in the countryand the go to place for business information and guidanceOur vision:

Operating principles:We will always put the interests of the client first.Impartial information and signposting.Co-designed with businesses and business support providers.Responsive & evolving: we will continually adapt and improve practice and processes in light of feedback.

The Process

The service is accessed by registering on the website:www.ciosgrowthhub.com

WORKING TOGETHERTO GROW YOUR BUSINESS

State Aid:The Right State of Mind

Mark TylerFrancis Clark: Finance in Cornwall seminar May 2016

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State Aid: The Right State of Mind10 May 2016

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Know your funders requirements

If you are getting a grant- invariably State Aid

Who are you relying on?Your funding will have strings attached

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Why does this matter?

What are the implications of getting it wrong?

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Dont ignore State Aid.Seek advice at an early stage Get your State Aid story straightDont rely on the funder to have addressed itDont expect the funder to provide you with a guarantee Comply with your funders conditions

Obtaining and holding on to your funding

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State Aid: the Right State of Mind10 May 2016

Cornish manufacturer to create 20 jobs following grant success

Pendennis Shipyard completes extensive expansion

European funding for SMEs available to drive innovation

If you get it right...

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Mark TylerSenior associate Corporate

Stephens Scown LLPTel: 01872 265100Email: [email protected]

Tim LaneSolicitor Corporate

Stephens Scown LLPTel: 01872 265100Email: [email protected]

The information in this presentation is intended to be general information only and should not be interpreted as legal advice. English & European law is subject to change so whilst Stephens Scown LLP seeks to ensure the information contained in this presentation is up to date and accurate, the law can change quickly and no guarantee is made as to its accuracy which means the information should not be relied upon. Presentation slides should not be viewed as an alternative to professional advice and Stephens Scown LLP does not accept liability for any action taken or not taken as a result of this information.

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Case StudyTom Roach10th May 2016

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Finance in Cornwall 2016

Richard Wadman - DirectorCornwall, we have lift off!

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SummaryUK and World view uncertainties prevailCornwall is a great place to do business and has great businessesCornwall (and wider SW) full of entrepreneurial spirit (businesses and funding options)Funding and business support herehttp://www.francisclark.co.uk/news-views/blogThank you


Presentations and other participants..

And more (30 presentations in total, covering full range of funding and business support options)


But before you go to lunch

The remainder of the day


The ROC 5K 500

Tuesday 28th June 2016 5.30 for 6.30pm startLemon Quay in Truro

www.roc-uk.org/ROC5K500Twitter: @roc_uk #ROC5K

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Finance in Cornwall - 10 May 2016 (Segment 3)

Business

Transcript of Finance in Cornwall - 10 May 2016 (Segment 3)