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Finance for Innovative SMEs
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Finance for Innovative SMEs

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  • 1. This project is funded by the European UnionIntegrated Innovation Support Programme Finance for Innovative SMEs Robert Sheffrin – Finance Expert IISP 2nd November 2012
  • 2. This project is funded bythe European Union“When the wind blows, some people buildwalls; others build windmills” Chinese proverb Integrated Innovation Support Programme (IISP) 2
  • 3. This project is funded bythe European Union Topics• Venture capital - introduction• Sources of funding for innovative SMEs• Examples of venture capital and angel backed companies• Investment readiness Integrated Innovation Support Programme (IISP) 3
  • 4. This project is funded bythe European Union Private Equity & Venture Capital• Private Equity is the provision of long term, equity (share) capital to non-quoted companies with high growth potential• Private Equity is for PRIVATE companies• Venture Capital is a type of Private Equity focussed on start-up, early stage companies and emerging growth companies Integrated Innovation Support Programme (IISP) 4
  • 5. This project is funded bythe European Union Business Angel “ ..an individual, acting alone or in a formal or informal syndicate, who invests their own money directly in an unquoted business where there is no family connection.” Professors C Mason & J Harrison Integrated Innovation Support Programme (IISP) 5
  • 6. This project is funded bythe European Union Bank vs Venture Capital Bank Debt Venture Capital • Secured (collateral) • Risk funding (equity capital) • Capital & interest • Return only on success repayments • Committed • Risk of withdrawal • Partner relationship • Monitoring relationship - support • REPAYMENT – regardless of profitability • GROWTH – no repayment until sufficient profit and value Integrated Innovation Support Programme (IISP) 6
  • 7. This project is funded bythe European UnionWhat are the funding options for innovative SMEs?Stage of development: Seed? Start-up? Early growth? Sustained growth? Integrated Innovation Support Programme (IISP) 7
  • 8. This project is funded bythe European Union Risk Finance Ladder Integrated Innovation Support Programme (IISP) 8
  • 9. This project is funded bythe European Union Example – Biotech start-up Activity – crop nutrition & protection products 2003 – start up funding. Owner + business angel 2004 - £50k seedcorn finance (venture capital fund) 2005 – 6 patents 2005/06 - £1m. 3 VC funds & 6 business angels 2006 - £3.85m AIM (London junior stock market)www.plantimpact.com Integrated Innovation Support Programme (IISP) 9
  • 10. This project is funded bythe European Union Example – Service Sector start-up Activity – dental recruitment Former dental nurse Rejected by banks & local Micro-Finance Fund Received £35k investment from one angel Failed Learned from failure - started again New angel investor Integrated Innovation Support Programme (IISP) 10
  • 11. This project is funded bythe European Union What an investor looks for High growth prospects An ambitious management team that can achieve the growth Product / service that has a good market and the ability to reach that market Competitive edge / unique selling point Willingness to share ownership Exit route Integrated Innovation Support Programme (IISP) 11
  • 12. This project is funded bythe European Union Checklist - is venture capital for you?Need funding for growth Good growth prospects Viable product or service Management ability Willing to sell shares Willing to work with others Exit route for investor  Integrated Innovation Support Programme (IISP) 12
  • 13. This project is funded bythe European Union Where’s the money?Some now - more in the future…2012:Serbian Business Angels Network www.sban.eu – next meeting 15th - 16th NovemberBalkan Venture Forum www.balkanventureforum.org – 22nd - 23rd November11 Accelerator Venture Fund – www.eleven.bg2013/14Western Balkan Enterprise Development and InnovationFacility (WB EDIF) – Innovation, Expansion & Loan FundsOther VC Funds - >$200m being raised for region Integrated Innovation Support Programme (IISP) 13
  • 14. This project is funded bythe European Union Investment Readiness Knowing your potential funding market Having your “tool kit” ready for investors. Knowing your investors Knowing when to approach the market Understanding the investment process Integrated Innovation Support Programme (IISP) 14
  • 15. This project is funded bythe European Union IISP Investment Readiness Training• Training for 100 SMEs• Coaching for 20 SMEs• Application and assessment from January 2013• Starts February 2013For pre-registration, go to www.iisp.rs and click on“investment readiness” or email sme.finance@iisp.rs Integrated Innovation Support Programme (IISP) 15
  • 16. This project is funded bythe European Union IISP Contact info. Tel: 011 362 0923 Email: sme.finance@iisp.rs Web: www.iisp.rs Robert Sheffrin - Finance Expert Aleksandar Vesic – Innovation Funding Expert Integrated Innovation Support Programme (IISP) 16