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Venice SMEs Seeking Finance2


When seeking finance for an IP based SME beauty is in the eye of the beholder. For European Patent Office

When seeking finance for an IP based SME beauty is in the eye of the beholder. For European Patent Office

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  • 1. Problems faced by SMEs when seeking finance
    lessons to learn
    Iain C Shirlaw,
    Director Equity Financing
    Venice, November 2008
  • 2. Tangible and Intangible Book Value
  • 3. IV as % of Market Capitalisation, 2005
  • 4. IV as % of Market Capitalisation, 1975
  • 5. “Beauty is in the Eye of the beholder” Greece, 3rd Century BC
    The Inventor of IP
    The Financier
    The Manager
  • 6. The Inventor
    Typically a public sector employee
    Expert (Knows a lot about a specialised niche)
    Funding is usually a grant
    Idea is worth billions
  • 7. The Financier
    Typically an accountant
    Non Expert (Knows a little about many things)
    Funding is based on a specific target return
    Idea is worth nothing unless it has EBITDA
  • 8. The Manager
    Typically used to work for a large company
    Has been a functional specialist
    Funding is something to pay his salary
    Idea will make millions for somebody!
  • 9. The Industry
    Has shareholders to satisfy
    Has a traditional perspective
    Investors don’t want risk
    Need Proof the idea is worth anything!
    And have a lot of cash!!!!
  • 10. The Business Model
    Invest 20x$25m in R&D to get 20 candidates ($25m each)
    Invest $20m in pre-clinicals – Lose $10m
    Invest $25m in Phase 1 – Lose $12.5m
    Invest $25m in Phase 11 – Lose $16m
    Invest $50m in Phase 111/1V – Lose $25m
    Invest $50m in FDA and market Approval – Lose $25m
    Win!!!! Generate $120m per year for 10 years
  • 11. Bridging The 7 Stages of SME Growth
  • 12. The Lesson to be learned
    Aim for value at each stage
    Learn and Build your capability
    Know your buyer - Pharma?
    Be ready for change!
    Get your timing right!!
    Iain C Shirlaw,
    November 2008
  • 13. Seven Ages of Man
    Old Age
  • 14. As You Like it Act 2, Sc 7 Shakespeare
    "All the world's a stage, and all the men and women merely players;They have their exits and their entrances;and one man in his time plays many parts,His acts being seven ages.
    At first the infant, mewling and puking in the nurse's arms;And then the whining school-boy, with his satchel And shining morning face, creeping like snail unwillingly to school.
    And then the lover, Sighing like furnace, with a woeful balladMade to his mistress' eyebrow.
    Then a soldier, full of strange oaths, and bearded like the pard, jealous in honour, sudden and quick in quarrel, seeking the bubble reputation even in the cannon's mouth.
    And then the justice, in fair round belly with good capon lin'd, with eyes severe and beard of formal cut, full of wise saws and modern instances; and so he plays his part.
    The sixth age shifts into the lean and slipper'd pantaloon, with spectacles on nose and pouch on side; His youthful hose, well sav'd, a world too wide for his shrunk shank; and his big manly voice, turning again toward childish treble, pipes and whistles in his sound.
    Last scene of all, that ends this strange eventful history, is second childishness and mere oblivion;Sans teeth, sans eyes, sans taste, sans everything." )
  • 15. Iain Shirlaw
    Contact details:
    international corporate and transaction advisor
    life sciences and healthcare