Ramada Hotel Digital Circle 19.08.09 V2

All-island Seedcorn Business Competition 2009 Ramada Hotel, Belfast, 19 August 2009 Gráinne Lennon, InterTradeIreland www.seedcorncompetition.com

www.seedcorncompetition.com Agenda

Previous winners & finalists

Why enter?

Eligibility & selection criteria

Which Region & Category?

Prize money split

The road map

The business plan

Common mistakes

www.seedcorncompetition.com So is the competition all about the money? € 360,000!

www.seedcorncompetition.com “ The competition attempts to re-create the investment process and stimulate investment activity…. we need your business plan”

www.seedcorncompetition.com 2008 Overall Emerging International Company winners Mcor Technologies

www.seedcorncompetition.com 2008 Overall Emerging Company winners Media Light Box

www.seedcorncompetition.com Sectors – 2008 regional finalists Software Energy Munster Digital Media & Web 2.0 Software Munster Digital media & Web 2.0 Medical Devices Munster Digital media & Web 2.0 Food NI Manufacturing & Industrial ICT NI Digital media & Web 2.0 Software NI Medical Devices Entertainment C&L ICT Food C&L ICT Manufacturing and Industrial C&L Online Florist Consumables Dublin ICT Energy & Technology Dublin ICT Medical Devices Dublin Emerging International Region

www.seedcorncompetition.com

www.seedcorncompetition.com Why enter?

Improve your cash flow !

Validate your business plan

Improve your ‘investor readiness’ (master classes)

Make contacts, gain exposure to investors, alumni association

Leverage the prize/opportunity to raise new equity

PR/increased profile/video clip

Feedback available on business plan

www.seedcorncompetition.com Eligibility

Have you raised < €1million in equity?

Is your company incorporated?

Have you a new equity requirement in excess of:

At least €500k – High Growth Category

At least €100k – Emerging Category

Selection Criteria

Select region

Select category

High Growth Company – Previously ‘Emerging International’

Emerging Company

Select university spin-out or platform programme

www.seedcorncompetition.com Which region?

Northern Ireland

Dublin (city & county)

Munster

Connacht & Leinster

Which Category?

High Growth Company Category

Less than 5 years old at 25 September 2009

Sales targets in excess of €5m*

Emerging Company Category

- Less than 3 years old at 25 September 2009

- Sales targets less than €5m*

* Please note that criteria has changed

www.seedcorncompetition.com New Prize fund - €360,000! € 360,000 Total prize fund € 10,000 Best University spin-out or platform programme € 150,000 6 Regional prizes (3 in each category) €25,000 each € 100,000 Best Emerging Company € 100,000 Best High Growth Company

www.seedcorncompetition.com Roadmap No. of Companies 2 8 8 24 173 328 26 November – Overall final 16/17 November – Master Classes Mid November – regional finals End October – top plans selected Submit business plan by 1pm 25 September Register for competition

www.seedcorncompetition.com In the Investor’s Mind Is this the right team? What’s the entrepreneur’s motivation? Is this a billion dollar opportunity? Is it a game changer? How competitive is the space? How defensible is the product? How much is this thing going to take? How long to maximise value and exit?

Business Plan objectives

Plan Objective : Convince a potential investor that the business is a worthwhile investment

Plan must:

Attract the investor's interest

Emphasise the strengths of the business and its position in the market, especially compared with competition

Convince the investor that management has the expertise and commitment to realise the potential

Recognise the risks

Project the development of the business (milestones)

Demonstrate exit opportunity

The Business Cube

can be applied to any

stage of a company’s

development

Marketing Plan Management Team Market Opportunity Industry & Competition Funding Key Risks Operations & Legal Product/ Service Proposition Financial Plan

Business Plan structure

Regardless of stage of evolution, all key components should be

addressed in a business plan

Executive Summary 9. Key risks

Business Overview 10. Financial plan

Market Opportunity 11. Funding

Industry & Competition 12. Exit strategy

Product Proposition 13. Summary

Marketing Plan 14. Appendices

Management Team

Operations

Tailor the content to your business and sector

Executive Summary

Most important part of the plan

Objectives:

Convey the main points of the investment proposal to

the potential investor

Attract his attention and encourage him/her to read on

Answer the potential investor's basic questions

Typically 2-3 pages in length (maximum 4-5 pages)

Must have verve, punch and passion

Stick to the hard facts

Market Opportunity Who are the potential customers we are going to sell to? What defines customer segments? What needs does the idea satisfy? How do customers currently satisfy this need? How many customers are in this market? What is the projected growth in this market? What is the proposition for customers? Why is this approach innovative and compelling? What are the implications to the customers of buying from us? What do we need to do to confirm the size of this market? How fragmented is this market ? KEY QUESTIONS Marketing Plan Management Team Market Opportunity Industry & Competition Funding Key Risks Operations & Legal Product/ Service Proposition Financial Plan

Industry & Competition Which competitors are there in this market? What are your competitors market share and finance? Their strengths and weaknesses? Who else is working on these solutions? Why is your approach better than our competitors? What is your source of competitor advantage e.g. IP? Are distribution channels are available? How long can we stay ahead of the competition? How are competitors likely to respond? What will they do to prices? How much room is there in this market for competitors? What barriers will you face or can you create? KEY QUESTIONS Marketing Plan Management Team Market Opportunity Industry & Competition Funding Key Risks Operations & Legal Product/ Service Proposition Financial Plan

Product/ Service Proposition Why is this the right proposition? How is it different from existing products/services? Will it become obsolete and how it may change? Why is now the right time? Why is it unique and what is the USP? Is the business protected to have a ‘virtual monopoly’? What stage is the product in development e.g. trails? What regulatory and technology proving is needed? How will this solution take advantage of existing distribution channels? KEY QUESTIONS Marketing Plan Management Team Market Opportunity Industry & Competition Funding Key Risks Operations & Legal Product/ Service Proposition Financial Plan

How will you win the initial customers, pilots and sales? What is the business model e.g. B2C, B2B etc Which distribution channels will you use? Promotional strategy that will be used? Who will be the key customers? What is the approach to distribution and channels? What is your pricing and discount approach? How will you structure the sales team and process? Which markets could you address first to gain revenue? What is the current sales and order book? KEY QUESTIONS Marketing Plan & Route to Market Marketing Plan Management Team Market Opportunity Industry & Competition Funding Key Risks Operations & Legal Product/ Service Proposition Financial Plan

Management Team and Partners Is this the right executive and board team to deliver the venture? Can you show the experience and achievements to deliver the new business? How is the team motivated and working together? Does the team have the energy to make this venture happen? Can you outline the skill gaps and how they will be filled? Have the stakeholders been identified? What capabilities are required from partners? Have we identified the right partners? Key Questions Marketing Plan Management Team Market Opportunity Industry & Competition Funding Key Risks Operations & Legal Product/ Service Proposition Financial Plan

Operations & Legal Is the venture proposition based on proven technology? Will the proposed technology work? Is the technology and / or process protected by patents? Is there a reliable source of materials and critical inputs e.g. raw materials and skilled staff? Can you effectively produce and deliver the product or service? Can we maintain/repair and/or support the new business? Is the business liable to any litigation risks on use of technology or operational issues? KEY QUESTIONS Marketing Plan Management Team Market Opportunity Industry & Competition Funding Key Risks Operations & Legal Product/ Service Proposition Financial Plan

Are key risks understood? Has the risk of market adoption been recognised? What is the competitor reaction? Delay effect of getting regulatory approval? Are key market risks for this venture acceptable? Are the key technical risks for this venture acceptable? What constraints must be challenged to launch this venture? Are the risks and constraints reflected in the financial models? Key risks & Constraints KEY QUESTIONS Marketing Plan Management Team Market Opportunity Industry & Competition Funding Key Risks Operations & Legal Product/ Service Proposition Financial Plan

Financial Plan What is the financial history? Have the financial models used a range of assumptions? Are the revenues significant and are drivers understood? What are the one-off and ongoing operating costs? What are the one-off and ongoing capex costs? What are the key P&L numbers? What percentage of available funds will this require? Are pricing and margin projections realistic? What are the cash and finance projections? KEY QUESTIONS Marketing Plan Management Team Market Opportunity Industry & Competition Funding Key Risks Operations & Legal Product/ Service Proposition Financial Plan

Funding & Exit What is the requirement and approach to funding? Are the funds being looked for sufficient? Equity investment and loans that are currently utilised? Sources and approach to funding rounds over three years? What commitment is being made by management time to funding? What are the milestones and potential phasing of the release of funds? Who are the advisors to gain more information or make an offer? What is the potential exit route e.g. trade sale, IPO? KEY QUESTIONS Marketing Plan Management Team Market Opportunity Industry & Competition Funding Key Risks Operations & Legal Product/ Service Proposition Financial Plan

Financial Schedules* should include:

Detailed financial history covering 3 to 5 years

Detailed financial projections for the next 3 years, phased monthly

for at least the first year

Monthly cash flow projections up to maximum requirement

Principal assumptions underpinning the projections (e.g. pricing,

market share, product launch dates, capital expenditure, utilisation

of capacity, interest rates, exchange rates, collection of debtors and

payment of suppliers)

*P&L / Balance Sheets / Cash flow Statements

Business Plan mistakes

Use the ‘old’ nuggets e.g. ‘we have no competition’, ‘we will achieve 5% of the global market’

Restrict your market (export sales are usually required)

Too long (aim for 25 pages max, 40 pages incl. appendices)

Forget how to spell, present clearly, address it for the reader

Exhaustive detail, too much jargon…focus on the key areas of interest to the investor e.g. the market; the product; the distribution channels; the management team