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  1. 1. Environmental Enterprise and Innovation (MA) Lecture 9 Sources of Funding
  2. 2. Accessing Funds <ul><li>Personal funds or family and friends </li></ul><ul><li>Grants </li></ul><ul><li>Banks </li></ul><ul><li>Business Angels </li></ul><ul><li>Venture Capitalists </li></ul><ul><li>Corporate Venturing </li></ul><ul><li>Public Markets </li></ul>
  3. 3. Accessing Funds <ul><li>Family and Friends </li></ul><ul><ul><li>Plan ahead and for every eventuality </li></ul></ul><ul><ul><li>Divorce can be ugly! </li></ul></ul>
  4. 4. Grants <ul><li>Rules and Regulations </li></ul><ul><li>Check eligibility </li></ul><ul><li>Is it suitable </li></ul><ul><li>Read the small print! </li></ul>
  5. 5. Grants <ul><li>Smart </li></ul><ul><ul><ul><li>Technology Studies </li></ul></ul></ul><ul><ul><ul><ul><li>Grants of up to £2,500 towards the costs of expert reviews against best practice. </li></ul></ul></ul></ul><ul><ul><ul><li>Technology Reviews </li></ul></ul></ul><ul><ul><ul><ul><li>Grants of up to £5,000 to help identify technological opportunities leading to innovative products and processes. </li></ul></ul></ul></ul>
  6. 6. Grants <ul><ul><li>Smart </li></ul></ul><ul><ul><ul><li>Micro projects </li></ul></ul></ul><ul><ul><ul><ul><li>Grants of up to £10,000 to develop low cost prototypes of products and processes involving technical advances and/or novelty. </li></ul></ul></ul></ul><ul><ul><ul><li>Feasibility </li></ul></ul></ul><ul><ul><ul><ul><li>Grants of up to £45,000 to undertake feasibility studies into innovative technologies </li></ul></ul></ul></ul><ul><ul><ul><li>Development </li></ul></ul></ul><ul><ul><ul><ul><li>Grants of up to £150,000 undertake development projects. Exceptional grants up to £450,000. </li></ul></ul></ul></ul>
  7. 7. Grants <ul><li>Phoenix Fund </li></ul><ul><ul><li>Entrepreneurs in disadvantaged areas </li></ul></ul><ul><ul><li>Emphasis on job creation and building local communities </li></ul></ul><ul><li>Development Fund </li></ul><ul><li>Community Development Venture Fund </li></ul>
  8. 8. Grants <ul><li>Enterprise Grants </li></ul><ul><ul><li>Capital investment, e.g. equipment, plant, machinery, patent rights </li></ul></ul><ul><li>Small businesses </li></ul><ul><ul><ul><li>15% gross of fixed capital costs up to a maximum grant of £75,000. </li></ul></ul></ul><ul><li>Medium </li></ul><ul><ul><ul><li>7.5% gross of fixed capital costs up to a maximum grant of £75,000. </li></ul></ul></ul>
  9. 9. Grants <ul><li>Regional Selective Assistance Grants </li></ul><ul><ul><li>Discretionary scheme, relocation, expansion </li></ul></ul><ul><ul><li>Check with regional Government Office </li></ul></ul><ul><li>Early Growth Fund </li></ul><ul><ul><li>Encourage risk capital funding of start-ups </li></ul></ul><ul><ul><li>£50,000 </li></ul></ul><ul><li>Regional Venture Capital Fund </li></ul><ul><ul><li>Provide venture capital </li></ul></ul><ul><ul><li>£500,000 </li></ul></ul>
  10. 10. Where To Go <ul><li>Government Departments e.g. Department for Trade and Industry </li></ul><ul><li>Regional Development Agencies </li></ul><ul><li>Government Offices </li></ul><ul><li>Small Business Service </li></ul><ul><li>Business Links </li></ul>
  11. 11. Banks <ul><li>Popular choice for business </li></ul><ul><ul><li>Familiarity </li></ul></ul><ul><ul><li>Ease </li></ul></ul><ul><ul><li>Cost </li></ul></ul><ul><ul><li>Flexibility </li></ul></ul>
  12. 12. Debt Finance <ul><li>Loans </li></ul><ul><ul><ul><li>Agreed interest rates </li></ul></ul></ul><ul><ul><ul><li>Agreed time </li></ul></ul></ul><ul><ul><ul><li>Usually secured </li></ul></ul></ul><ul><ul><ul><li>May not be suitable for start-up </li></ul></ul></ul><ul><li>Overdrafts </li></ul><ul><ul><ul><li>Linked to working cashflow </li></ul></ul></ul><ul><ul><ul><li>Interest only charged on time overdrawn </li></ul></ul></ul><ul><ul><ul><li>Short term </li></ul></ul></ul>
  13. 13. Loans <ul><li>Small Firms Loan Guarantee Scheme </li></ul><ul><li>Unable to get conventional loan </li></ul><ul><li>Scheme will guarantee 70% of a loan. </li></ul><ul><li>£5,000 to £100,000 </li></ul><ul><li>Apply through Banks </li></ul>
  14. 14. Debt Finance <ul><li>Leasing </li></ul><ul><ul><li>No need to pay payment </li></ul></ul><ul><ul><li>Monthly fees </li></ul></ul><ul><ul><ul><li>Hire Purchase </li></ul></ul></ul><ul><ul><ul><li>Finance Lease </li></ul></ul></ul><ul><ul><ul><li>Contract Hire </li></ul></ul></ul>
  15. 15. Debt Finance <ul><li>Factoring </li></ul><ul><ul><li>Flexible loan based on company sales </li></ul></ul><ul><ul><li>No additional assets required as security </li></ul></ul><ul><ul><li>Involvement of a factoring company </li></ul></ul><ul><ul><ul><li>Fees and interest charged </li></ul></ul></ul><ul><ul><ul><li>Arrangements quick and easy to set up </li></ul></ul></ul>
  16. 16. Equity Finance <ul><li>Benefits </li></ul><ul><ul><li>No repayment </li></ul></ul><ul><ul><li>No interest rates </li></ul></ul><ul><ul><li>Not tied to assets </li></ul></ul><ul><li>In Return </li></ul><ul><ul><li>Share of business </li></ul></ul><ul><li>Business Angels </li></ul><ul><li>Venture Capital </li></ul><ul><li>Stock markets </li></ul>
  17. 17. Equity Finance <ul><li>Business Angels </li></ul><ul><ul><li>Private investors </li></ul></ul><ul><ul><li>Act individually or as a group </li></ul></ul><ul><ul><li>£25,000 to £1m </li></ul></ul><ul><ul><li>Cash and experience </li></ul></ul><ul><li>National Business Angels Network </li></ul>
  18. 18. Equity Finance <ul><li>Venture Capital </li></ul><ul><li>Long term commitment </li></ul><ul><li>Looking for: </li></ul><ul><ul><li>High growth prospects </li></ul></ul><ul><ul><li>Ambitious management team </li></ul></ul><ul><ul><li>Unique selling point </li></ul></ul>
  19. 19. Equity Finance <ul><li>Corporate Venturing </li></ul><ul><li>Investment by large companies into smaller businesses </li></ul><ul><li>Financial benefits </li></ul><ul><li>Strategic alliances </li></ul><ul><li>Mutually beneficial </li></ul>
  20. 20. National Endowment for Science, Technology and the Arts (NESTA) <ul><li>Funds for: </li></ul><ul><li>Research and development </li></ul><ul><li>Securing intellectual property rights </li></ul><ul><li>Business establishment and development for companies or individuals inventing or innovating novel technology. </li></ul><ul><li>£5,000 - £50,000 </li></ul>
  21. 21. R&D Tax Breaks <ul><li>Tax credits for small to medium sized companies carrying out research and development </li></ul><ul><ul><ul><li>Increased tax relief for qualifying non-capital research and development expenditure from 100% to 150% </li></ul></ul></ul><ul><ul><ul><li>Payable research and development tax credit for companies that are not in profit. This equates to £24 for every £100 spent on research and development </li></ul></ul></ul>
  22. 22. Shell LiveWIRE <ul><li>Promoting enterprise among 16-30 years olds </li></ul><ul><li>Information and advice </li></ul><ul><li>Annual Awards </li></ul>
  23. 23. The Prince's Trust <ul><li>Support for 18 0 30 year olds </li></ul><ul><li>Financial and business support </li></ul><ul><li>Up to £5,000 start-up loans </li></ul>
  24. 24. Financial Support <ul><li>Many options </li></ul><ul><li>What do you need the funds for? </li></ul><ul><li>If and how will you repay? </li></ul><ul><li>Think carefully </li></ul>