The document discusses Enterprise Ventures, which has been operating for 30 years and manages £160m in funds, focusing on SME funding, with significant investment statistics over the years. It outlines the challenges SMEs face in accessing funding, particularly for growth, and highlights the importance of management structure and track record in securing financial support. It emphasizes the need for public sector intervention to help small businesses grow and achieve maturity.

1. SMEs – Funding through Transition
Paul Taberner
Enterprise Ventures
1ST JUNE 2015

2. Enterprise Ventures
.
• 30 years in operation
• £160m funds under management
• £100m invested in 4 years into 774 transactions
• £30m invested in 2014 into 220 transactions
• £170m raised since 2003

3. Enterprise Ventures
.
• Wholly owned by its management team - empathy
• Hugely experienced investors and lenders – seen it all
• Team of 32 people (20 FCA threshold competent)
• Manchester, Liverpool, Preston and Barnsley offices
• CDFA member

4. Our investments
.
2011 2012 2013 2014
Amount Invested (£) 19,391,179 24,150,485 29,877,627 29,929,126
No of transactions (No) 177 167 212 218
Average Transaction (£) 109,555 144,614 140,392 137,290

5. Our clients
.

6. Paul Taberner ACIB
• Investment Director, 33 years in SME Banking and Finance
• 15 years Barclays Bank, Management Development Programme, UK and overseas
• Corporate Manager, then 8 years with Barclays Ventures
• Joined EV in 2005 as Investment Director, Equity
• Responsible for EV’s Loans activity

7. What to we mean by SME
• £38m turnover, sub 250 employees
• Vast majority “S”, some aspire to “M”, but not many
• Lifestyle v Growth – which has greatest impact?
• Role of the Public Sector?

8. Who funds what?
• Finance based on past performance – not ideal if growing or recovering
• BANKS
• “Future Certain”
• ALTERNATIVE and ASSET BASED LENDERS – costly
• “Future uncertain”
• EQUITY – not really - 99% of applicants fail

9. Funding Stages – Start Up
• Bootstrap, redundancy, savings, family
• Debt based on personal assets, not corporate performance
• Little financial discipline
• Stakeholders passive, no security or scrutiny
• Up to 5 people, owner multi tasks
• Economic impact limited, but……….
• Stay and become “lifestyle” or……………

10. Funding Stages – Growth
• Personal wealth/security exhausted
• Limited corporate security, track record and still small, sub 25 employees
• Need external funding, stock debtors etc.
• Unless high growth equity unrealistic, but have potential
• Mainstream debt funding – “The Funding Gap”
• Management, delegation – new skills
• Financial disciplines
• Stop here……………..financial impact of getting it wrong is significant

11. Funding Stages – Maturing
• 25 employees
• Management structure
• Finance function, stakeholder management
• Management Information, Forecasts – Bankers get a warm glow
• Glow heightened by SECURITY
• Track Record is the real tipping point (remember, Bankers look backwards)
• Public Sector job done, but Access to Finance is the problem post 2008

12. Why bother?
• “Small Businesses become Big Businesses” - rarely
• Employ
• Contribute
• Need help or finance, often both
• If you endorse Public Sector intervention, then must facilitate (not deliver) both
• Ultimate goal must be to achieve maturity of scale, and eliminate the dependency