PKF Francis Clark is hosting a seminar which brings together providers of business funding, including both debt and equity; business support agencies including grant specialists; our own corporate finance experts and business owners themselves to provide short, sharp presentations in order to assist business owners and managers in assessing which funding stream is right for them.
Falcon Invoice Discounting: The best investment platform in india for investors
Finance in the South West 2017 - Established (>2 Years) Session
1. Finance in the South West
Nick Farrant, Partner
Businesses trading for > 2 years…….
2. pkf-francisclark.co.uk
Structure of morning
• Background, Debt and Business Support (8.30am to
10am)
• Heart of SW LEP
• Banks: an overview
• Equity and Grants
• Growth Hub
• Coffee Break
• Funding, Business Support, Investment Ready
and SME perspective (10.25am to 12noon)
• Start Up (trading for < 2 years) or Established Business
• Lunch and Networking (12noon to 1pm)
3. pkf-francisclark.co.uk
• 10 minute presentations on:
• LEADER (grant)
• Marketplace lending – unsecured loans
• Peer to Peer – secured debt
• Debt – the range
• Growth Capital (equity)
• Venture Capital / Private Equity
• Investment ready
• SME Perspective
Funding and support – for business > 2 years old
5. Background to LEADER
•Part of the Rural development programme
•Managing authority is RPA (Rural Payments Agency)
•Focus on jobs/growth/economy
•Primarily capital investment
•Greater Dartmoor LEAF £1.5m
•South Devon Coastal LAG £1.2m
•Runs to 2020 – Brexit?
6. Greater Dartmoor LEAF / South Devon Coastal
LAG
(Rural Development Programme for England 2015-2020)
7. Greater Dartmoor LEAF / South Devon Coastal LAG
(Rural Development Programme for England 2015-2020)
•Grant or loan?
•Who can apply?
•How much for?
8. Greater Dartmoor LEAF / South Devon Coastal LAG
(Rural Development Programme for England 2015-2020)
•What to include in an application
•What’s the process and how long does it take?
•How and where do we start!
www.drcompany.co.uk 01837 658643 admin@drcompany.co.uk
9. Greater Dartmoor LEAF / South Devon Coastal LAG
Selection of successful
projects so far…..
10. Marketplace Lending – Unsecured Loans
Sarah Beard – Business Development Manager South West
22nd February 2017
11. • Online platform specifically designed to revolutionise traditional banking
methods. Our priority is to secure a better deal for everyone
• Access in as little as 1 week, to fast affordable business loans for working
capital, expansion, tax funding and much more …
• Marketplace lenders are not banks. Put simply, we directly connect
business borrowers looking for finance to grow their business, with
investors who want to lend
What is a Market-place lender?
12. A simple model: Lenders can spread risk by lending
small amounts to hundreds of businesses
Traditional lending
Investors have control over their investment
Marketplace lending
Loan
parts
Loan
parts
Loan
parts
Loan
parts
Loan parts
Loan parts
13. Funding Circle – Who are we?
“Were passionate about small businesses”
“Thousands of people, financial institutions and the British Business Bank have lent
over £1.8 billion to British businesses since 2010.
At rates that suit everyone.”
3 Founding Members – set up in 2010
Over $2.5 billion lent worldwide
600 Staff in the UK
300 Staff in CE/USA
Aim is to become the leading global market-place for investing and borrowing for SMEs
14. Funding Circle is the leading global lending platform for small
businesses
14
0
500
1,000
1,500
2,000
2,500
2010 2011 2012 2013 2014 2015 2016 E 2017 F
FundingCircleannualorigination($m)
Group Originations*
October 2013
Launch in the US
October 2015
Launch in Germany,
Spain & Netherlands
Originated over $2.5B to tens of thousands of small businesses since 2010
15. Filling The Cashflow Funding Gap
At Funding Circle, we are committed to helping you:
• Grow your business
• Boost working capital
• Cover one-off business costs
• Buy an asset
• Develop a property
• Hire extra staff
16. Unsecured Loan
£5k - £350k
Suitable for a wide range
of purposes
6 months to 5 year term
Fixed interest rates from
4.9%
No ERP’s
Secured Loan
£150k - £1m
All asset security
agreement
Charge on specific
properties or
assets
Products
£150k-£3m
Development
Commercial
Investment
Fixed interest
rates
No early
repayment fees
Property Finance
17. Any Sector, Any Purpose…
Loan Purpose
Working capital
Expansion/growth
Capital
Asset purchase
Other
Residential property
development
Asset finance
Refinancing a loan
Tax payment
Tax liability
Sector
Automotive
Finance
Leisure & Hospitality
Education &
Training
I.T and
Telecommunications
Agriculture
Consumer Services
Healthcare
Manufacturing and
Engineering
Other
18. Funding Circle – Top Deals
• Garage repair centre. Borrowed £52,000 (7.5% rate) 60 months. Risk Band A+
Raising funds to purchase new equipment, plus marketing and recruitment spend
• Haulage company. Borrowed £30,000 (10.5% rate) 60 months. Risk Band B
To purchase new equipment and help with cashflow
• Hotel. Borrowed £205,000 (7.5% rate) 60 months. Risk Band A+
Working capital and wanted to carry out refurbishments
• Scaffolding business. Borrowed £298,000 (9% rate) 60 months. Risk Band A
To purchase assorted scaffolding equipment for new and ongoing contracts
19. Underwriting - Simple Credit Criteria
A minimum
of 2 years
trading history
At least 1 year
of filed or formally
prepared accounts
No outstanding CCJs
larger
than £250
What We Look For…
• Sole traders, partnerships, LLPS and Limited companies eligible
• Trading for 2 years with at least 1 years of filed accounts
• Clean personal credit – no CCJs, CVA, CVL or liquidated companies within past 6 years
• No consecutive losses
• Beneficial ownership in UK
• Non limited – must be a home owner
• Limited companies – will only lend up to £50k for non homeowner
20. 20
• In 2013/14 the British Business Bank lent Funding Circle £60m, which has
been channeled into more than 10,000 businesses across the UK.
• To this day, 10% of every loan funded on the partial loan marketplace is
financed by the UK government
• In January 2017 Funding Circle proudly announced it had secured a further
£40m from the government to continue to support UK SMEs
The Government’s commitment to supporting SMEs
through Funding Circle
26. AgendaWhat is P2P secured debt?
•Individuals lending
money
•Typically faster
•Backed by collateral
27. AgendaWhat is P2P secured debt?
A FAIR way of enabling
individuals to lend money to
others while mitigating the risk
of default by providing collateral.
28. We want to offer the
best protection
for Borrowers &
Lenders
32. Yes we can
• Need a quick decision
Get a yes or no within 24-48 hours
• Need funds within weeks rather than months
• Time poor
• Wearing many hats
• Turned down by their bank
33. Yes we can
• Need a quick decision
Get a yes or no within 24-48 hours
• Need funds within weeks rather than months
Funds within 7-10 days
• Time poor
• Wearing many hats
• Turned down by banks
34. Yes we can
• Need a quick decision
Get a yes or no within 24-48 hours
• Need funds within weeks rather than months
Funds within 7-10 days
• Time poor
Easy application
• Wearing many hats
• Turned down by banks
35. Yes we can
• Need a quick decision
Get a yes or no within 24-48 hours
• Need funds within weeks rather than months
Funds within 7-10 days
• Time poor
Easy application
• Wearing many hats
Simple and straightforward
• Turned down by banks
36. Yes we can
• Need a quick decision
Get a yes or no within 24-48 hours
• Need funds within weeks rather than months
Funds within 7-10 days
• Time poor
Easy application
• Wearing many hats
Simple and straightforward
• Turned down by banks
We don’t follow same judgement criteria
37. We’ll sort out the finance so you
can focus on your business.
41. Simple process
1 2 3
Apply online, call us
or drop into a branch
Decision within 24-48
hours
Funds released in 7-
10 days
42. Amount:
• Min £25,000
• Max 60% LTV
Duration:
• Fixed or flexible loans
Security:
• Land or property (not your home)
Cost*:
• Interest only loans at 5.5% or 6.5%
• 2% set up fee, 1% annual service charge
Straightforward loans
* 3rd party fees and disbursements also apply
53. Your property against which the loan is secured could be at risk if you
do not meet payments.
54.
55.
56.
57.
58.
59.
60.
61.
62.
63. Growth Capital Investors
EdwinDavies, Investor
Edwin.davies@bgf.co.uk 07880
384983
Introduction to BGF
Daniel Tapson, Investor
daniel.tapson@bgf.co.uk 07964 904443
64. Growth Capital Investors
BGFisaninvestment firm that
provides growthcapitalof£2m
-£10m toUKbusinesseswith
turnover of£5m -£100m.
Who we are.
Funding for growth and equity release
Day 1 investment of £2m – £10m for a
minority stake
Long-term and patient capital, no forced
exit
Access to huge network and support
Fast and focused investment process
65. Growth Capital Investors
BGF in numbers…
£2.5bn–total fund
£1.1bn–investedtodate
160 –total currentinvestments
102 –non-executives introduced
40% –maximum stake
9–investorsinthe Bristolteam
9–UKoffices
£5m –minimum turnover threshold
66. Growth Capital Investors
Day 1 investment of
£2m-£10m
Cash-in: to support long term growth
Cash-out: for existing shareholders
Equity stake of up to
40%
Always a minority partner – you retain
control
What we can offer.
Workingalongsidethe
banks,BGFprovides
growthcapitalinawaythat
meets companies’needs.
No closed fund
pressures
Patient capital. No drag rights, no forced
exit
67. Growth Capital Investors
Fast and focused
investment process
Minimises disruption and fees
What we can offer.
Workingalongsidethe
banks,BGFprovides
growthcapitalinawaythat
meets companies’needs.
Flexible structures –
equity / loan notes
Meets the needs of the company and
shareholders
Fair legal approach Less onerous investor legal protections
More than money Access to impressive network
and support
68. Growth Capital Investors
May 2012
£4.0m
Online garden products
retailer
Reading
December 2012
£3.5m
Niche developer of mobile
phones for major brands
Reading
South West Portfolio.
December 2012
£7.0m
Design & manufacture of
high composite pipes for oil
& gas
Portsmouth
April 2013
£3.9m
Design, manufacture &
distribution of branded
travel products for kids
Bristol
April 2014
£4.0m
Cloud based IT services to
the public sector
Corsham
August 2014
£8.0m
Manufacturer & retailer of
luxury kitchens
Devizes
August 2014
£3.6m
Sustainable energy
business that designs &
installs systems
Tetbury
August 2014
£6.0m
Furniture retailer with 40
stores across the UK
Slough
69. Growth Capital Investors
April 2016
£9.0m
Production of high quality,
bespoke technical fabrics
Bridgwater
August 2016
£2.0m
Liquid waste removal and
drainage services
Cardiff
August 2016
£2.0m
Data analytics
Corsham
South West Portfolio.
October 2016
£3.0m
Retailer of solid wood
kitchen worktops
Gloucester
October 2014
£7.0m
IT managed services and
cloud hosting
Cirencester
March 2015
£4.0m
Communications
infrastructure and
outsourced IT services
Chippenham
July 2015
£10.0m
Multi-channel retailer of
clothing, footwear,
household and fishing
tackle products
Brecon
January 2016
£4.4m
Web-based email
marketing solution
Oxford
70. Growth Capital Investors
70
BGF South West and
South Wales Team
James Austin
Investor
07872 819093
Greg Norman
Investor
07557 747302
Edwin Davies
Investor
07880 384983
Paul Oldham
Regional Director
07887 657697
Dan Tapson
Investor
07964 904443
Ned Dorbin
Investor
07800 682195
Alex Garfitt
Investor
07770 582021
Alex Snodgrass
Investor
07766 781923
James Skade
Investor
07967 816583
71. Private Equity, Mobeus and the South West
Richard Babington, Partner, Mobeus Equity Partners
72. Private, Mobeus and South West
72
• What private equity is not
• Private equity – what it is and what it all means
• Where does the money come from and how does it all work?
• How does the private equity market segment itself?
• How does the investment process work?
• What should you look out for in an adviser and a private equity partner?
• Mobeus and the South West
73. Private, Mobeus and South West
73
• What private equity is not
• Private equity – what it is and what it all means
• Where does the money come from and how does it all work?
• How does the private equity market segment itself?
• How does the investment process work?
• What should you look out for in an adviser and a private equity partner?
• Mobeus and the South West
75. Private Equity and Mobeus
75
• What private equity is not
• Private equity – what it is and what it all means
• Where does the money come from and how does it all work?
• How does the private equity market segment itself?
• How does the investment process work?
• What should you look out for in an adviser and a private equity partner?
• Mobeus and the South West
76. What is private equity?
76
Long term capital investment in
unquoted companies in return
for an equity stake
Average investment
period > 5 years
Growth is key
Companies are
privately held
PE house and
management are both
shareholders
77. Private, Mobeus and South West
77
• What private equity is not
• Private equity – what it is and what it all means
• Where does the money come from and how does it all work?
• How does the private equity market segment itself?
• How does the investment process work?
• What should you look out for in an adviser and a private equity partner?
• Mobeus and the South West
78. Where does the money come from?
78
Borrow 10-year money from financial institutions
(Limited Partners “LPs”)
Form an investment vehicle to invest the money in a series
of privately owned businesses (General Partner “GP”)
First 5-6 years investing in businesses alongside
management teams and growing them
Last 5-6 years growing the businesses and
exiting the shareholdings
Proceeds distributed back to the LPs,
management teams and the GP
79. Where does Mobeus’s money come from
79
Fund IV still in the investment phase
£150m raised from pension funds, insurers, Mobeus partners
Mobeus IV formed June 2016
Kinneir Dufort MBO (October 2016), Factor 21 MBO (November 2016)
Investments from earlier funds in the process of
being developed and exited
80. Private Equity and Mobeus
80
• What private equity is not
• Private equity – what it is and what it all means
• Where does the money come from and how does it all work?
• How does the private equity market segment itself?
• How does the investment process work?
• What should you look out for in an adviser and a private equity partner?
• Mobeus and the South West
81. How does the private equity market segment itself
81
Stage of development
Investment mindset
Scale of investment
Investment horizon
Sector specialty
Start up Development capital Established Turnaround
Passive ActivistActive
£500k-£2m £2m-£20m £20m-£100m £100m-£1bn £1bn+
2 years 10 years5 years
Specialist Generalist
82. Private, Mobeus and South West
82
• What private equity is not
• Private equity – what it is and what it all means
• Where does the money come from and how does it all work?
• How does the private equity market segment itself?
• How does the investment process work?
• What should you look out for in an adviser and a private equity partner?
• Mobeus and the South West
83. How does the investment process work?
83
Direct approachesIntroductions from
advisors
Inbound enquiries
Meetings with management, site visits,
exchange of information and expectations
Heads of terms and a period of exclusivity agreed
Due diligence (financial, commercial, legal, management plus
specialist), negotiation of legal agreements and building out of
5-year strategic plan
Legal completion and execution of the strategic plan
4 weeks
4 weeks
8 weeks
84. Private, Mobeus and South West
84
• What private equity is not
• Private equity – what it is and what it all means
• Where does the money come from and how does it all work?
• How does the private equity market segment itself?
• How does the investment process work?
• What should you look out for in an adviser and a private equity partner?
• Mobeus and the South West
85. Questions for yourself and your adviser
85
• Is your company prepared for the process?
• Corporate and financial records all complete and up to date
• Strategy for advancing the company in place
• “Transaction blockers” removed or capable of being contained
(outstanding legal actions, rogue shareholders, short leases)
• How should you go about choosing an adviser
• Match their capabilities (horsepower, network) with your needs
• Meet the entire team who will work on your transaction
• Examine the company’s track record in what you are trying to achieve
• Reference the firm, reference the individuals
• No question is a stupid question
• Consider talking to an advisor if the above is not the case
86. Questions for your private equity partner
86
• What experience does the PE firm have with what you are trying to do
with your business now and in the future
• Does the PE firm’s approach match what you want from a business
partners
• Are the people you are dealing with the decision makers at the firm
• How established is the firm and does it have committed funding lines
• Reference the firm. Reference the individuals you are dealing with. Do
the references on your terms, and talk to investments that haven’t
gone so well in addition to the stars
• Reference them again
87. Private, Mobeus and South West
87
• What private equity is not
• Private equity – what it is and what it all means
• Where does the money come from and how does it all work?
• How does the private equity market segment itself?
• How does the investment process work?
• What should you look out for in an adviser and a private equity partner?
• Mobeus and the South West
88. Mobeus and the South West
• Founded 1998, doing mid-market transactions ever since and active in
the South West from day 1
• One of the most stable and successful teams in UK private equity
• £400m under management, £150m currently being invested from
Mobeus IV
• Investing £2m to £20m in MBOs, equity releases and development capital
89. Private Equity, Mobeus and the South West
Richard Babington
richard.babington@mobeusequity.co.uk
+44 7909 994 665
https://www.linkedin.com/in/richard-babington-343ab63
95. pkf-francisclark.co.uk
.
The numbers
• Match funding to cash requirements and business
model
• Monthly profit and loss, cash flow and balance
sheet projections
• Review
• Cash headroom and sensitivities
96. pkf-francisclark.co.uk
.
Investment ready - housekeeping
Licences / contracts / IPR
Books and records in order and up to date?
VAT, PAYE/NI, Corporation tax
Statutory Accounts/management accounts
Website
100. pkf-francisclark.co.uk
.
Investment ready - Conclusions
Suitable funding
Robust Business case and appropriate
Management
Detailed financial projections and
documented assumptions
Resolve the ‘deal breakers’
Allow sufficient time
101. In-Chip Sensors
Market leading embedded monitoring IP
solutions for today’s technologies
GLOBAL IN-CHIP MONITORING
Finance in the South West 2017
22nd February 2017
V2, 15mins
Stephen Crosher
Managing Director
102. 102
The Challenges Posed …
Advanced Technologies:
Mobile Communications
Data centres
Automotive
IOT
Challenges to advanced product design:
Increased integration
Physical conditions
Continued advancement and complexity:
• Artificial intelligence
• Self driving vehicles
Solution: Monitoring ……
103. 103
Moortec Semiconductor
Semiconductor Design Company (‘IP Vendor’)
Licensing of circuits & sub-system solutions
Mission: To become world #1 for in-chip monitoring solutions
Located in the Plymouth Science Park
Global customer base
Silicon Valley China
S.Korea
IsraelUK/EU
Taiwan
Japan
104. 2005 - Founded in 2005
2005 to 2010 - Chip Design Services
2010 - IP Product Development
2014 - Innovate UK (TSB) Grants
Project#1 July 2014
Project#2 Oct 2014
2015 - Turning point
Pure-Play IP Product Model
Market Traction
TSMC IP Alliance Membership
Sought investment
2016 - A Big Year!
Received Investment for Growth
TSMC Open Innovation Platform® Partner of the Year New IP Award
Largest customer order
2017 - Growth
104
Timeline
2005
2010
2020
2015
Industry Awards
Industry Alliances
Foundry Alliances
Investment - Altitude Partners
105. 105
Lessons
The ‘Right’ Team:
Board structure
Define roles and employ the best
Culture (‘can do’ attitude, quality, personal learning & development)
A Ruthless Focus
Marketing
Sales
Product Roadmap (standing still is not an option)
Mentoring
Seek from various sources
Learn to prioritise
Burn-out v Delegate
Especially within a start-up culture
Recognise your successes!
106. 106
Next Stage of Journey
Focus on Revenue
IP Sales doubling each year
Increasing headcount
High-tech work force
Increased by 50% in the last year
Customer Reach
Account management
New Global Offices
Mission: To become world #1 for in-chip monitoring solutions
Silicon Valley
Hong Kong
UK/EU
108. Finance in the South West – wrap up
Nick Farrant, Partner
109. pkf-francisclark.co.uk
.
Summary
• The South West is a great place to do
business and has great businesses
• The South West full of entrepreneurial spirit
(businesses and funding options)
• Funding and business support here…
• http://www.francisclark.co.uk/news-views/blog
• Thank you
111. pkf-francisclark.co.uk
Structure of morning
• Background, Debt and Business Support (8.30am to
10am)
• Heart of SW LEP
• Banks: an overview
• Equity and Grants
• Growth Hub
• Coffee Break
• Funding, Business Support, Investment Ready
and SME perspective (10.25am to 12noon)
• Start Up (trading for < 2 years) or Established Business
• Lunch and Networking (12noon to 1pm)
112. (c) copyright PKF Francis Clark, 2017
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Clark in any format whatsoever unless you have obtained prior written consent from PKF Francis Clark to do so and entered into a licence.
To the maximum extent permitted by applicable law PKF Francis Clark excludes all representations, warranties and conditions (including, without limitation,
the conditions implied by law) in respect of these materials and /or any services provided by PKF Francis Clark.
These materials and /or any services provided by PKF Francis Clark are designed solely for the benefit of delegates of PKF Francis Clark.
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copy of which is available on request.
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Editor's Notes
Affordability still key
We will try to do the deal if we can