1. The Funding Ladder
Bristol & Bath Enterprise Network
Tuesday, 29th March 2011
Brian Dorricott
Business Mentor, Coach and Investor
http://www.meteorical.co.uk
brian.dorricott@meteorical.co.uk
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2. Brian Dorricott
 Electrical & Electronic Engineer
 Serial Entrepreneur
◦ Founded two IT companies
◦ Sold to CISCO & Management Team
 South West Angel Investment Network
 Mentor
◦ UWE Ventures, SetSquared
 Coach
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3. Finding Money
 General principles
◦ Return on Investment
◦ Things to sell
◦ Enhancing chances of success
 The Funding Ladder
 Business Angels
 More information
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4. Return on Investment (RoI)
 Also known as:
◦ Cost of money
◦ Internal Rate of Return (IRR)
◦ “interest”
 Pays for...
◦ Inflation
◦ Deal costs
 Entry, management & exit
◦ Risk premium (investment failures)
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5. Return on Investment (RoI)
 Expressed as
◦ % Rate of Return
◦ A multiplier over a number of years
Years 1% 5% 10% 60% 100%
1 1.01 1.05 1.10 1.60 2.00
2 1.02 1.10 1.21 2.56 4.00
Return1.03 ( 1 1.16 IRR) years
3 = + 1.33 4.10 8.00
4 1.04 1.22 1.46 6.55 16.00
5 1.05 1.28 1.61 10.49 32.00
10 1.10 1.63 2.59 109.95 1024.00
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6. Things to sell
Assets
Now

◦ Cars, vans, computers, property
 Near term income
◦ Customer purchases
◦ Invoices
 Ability to pay
◦ Loans
5 years +
 Dreams
Future
◦ Equity – Soul?
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7. Enhancing Chances of Success
 Demonstrate you are “low risk”
 Sales process. Selling...
◦ Future value
◦ Ability to realise future value
◦ Not just MD / CEO nor Product / Service
 Learn from others
◦ Colleagues
◦ Advisors
◦ Dragons’ Den
H. G. Bohn
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8. Funding Ladder
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9. Friends & Family
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10. Grants & Competitions
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11. Crowd Sourcing
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12. Loans & debt
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13. Hire Purchase
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14. Factoring & CID
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15. Trade Finance
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16. Revenue Based Finance
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17. Business Angels
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18. Venture Capital
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19. Business Angels
 Scope of funds
 Key advantages & disadvantages
 Typical deal characteristics
 Finding Business Angels
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20. Scope of funds
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21. Advantages & disadvantages
BAs may help the business grow.
Money available quickly.
No security required.
Deals complex.
Equity must be sold.
High growth potential and exit.
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22. Deal characteristics
Deal size £50K - £250K
Term 3 – 10 years
Collateral required No
Business valuation required Yes
Sales Required No
Sell equity Yes
Business Development Help May be
Cost of money 30% - 60%
Deal time 2 to 9 months
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23. Finding Business Angels
 Web searches
 Business Angel Networks
◦ Angels’ Den, Envestors, SWAIN, Xenos
 Corporate Finance Boutiques
◦ Beaufort Brokers, Exigo, Pegasus Funding
Resources
 Networking
◦ Evangelising
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24. Useful websites
 Business Link
◦ http://www.businesslink.gov.uk
 Meteorical
◦ http://www.meteorical.co.uk
 Funding section
 Business Angel
Network listing
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25. The Funding Ladder
Bristol & Bath Enterprise Network
Tuesday, 29th March 2011
Brian Dorricott
Business Mentor, Coach and Investor
http://www.meteorical.co.uk
brian.dorricott@meteorical.co.uk
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