BEN Investability Brian Dorricott

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BEN Investability Brian Dorricott

  1. 1. The Funding LadderBristol & Bath Enterprise NetworkTuesday, 29th March 2011Brian DorricottBusiness Mentor, Coach and Investorhttp://www.meteorical.co.ukbrian.dorricott@meteorical.co.uk 1
  2. 2. Brian Dorricott Electrical & Electronic Engineer Serial Entrepreneur ◦ Founded two IT companies ◦ Sold to CISCO & Management Team South West Angel Investment Network Mentor ◦ UWE Ventures, SetSquared Coach 2
  3. 3. Finding Money General principles ◦ Return on Investment ◦ Things to sell ◦ Enhancing chances of success The Funding Ladder Business Angels More information 3
  4. 4. Return on Investment (RoI) Also known as: ◦ Cost of money ◦ Internal Rate of Return (IRR) ◦ “interest” Pays for... ◦ Inflation ◦ Deal costs  Entry, management & exit ◦ Risk premium (investment failures) 4
  5. 5. Return on Investment (RoI) Expressed as ◦ % Rate of Return ◦ A multiplier over a number of years Years 1% 5% 10% 60% 100% 1 1.01 1.05 1.10 1.60 2.00 2 1.02 1.10 1.21 2.56 4.00 Return1.03 ( 1 1.16 IRR) years 3 = + 1.33 4.10 8.00 4 1.04 1.22 1.46 6.55 16.00 5 1.05 1.28 1.61 10.49 32.00 10 1.10 1.63 2.59 109.95 1024.00 5
  6. 6. Things to sell AssetsNow  ◦ Cars, vans, computers, property  Near term income ◦ Customer purchases ◦ Invoices  Ability to pay ◦ Loans 5 years +  DreamsFuture ◦ Equity – Soul? 6
  7. 7. Enhancing Chances of Success Demonstrate you are “low risk” Sales process. Selling... ◦ Future value ◦ Ability to realise future value ◦ Not just MD / CEO nor Product / Service Learn from others ◦ Colleagues ◦ Advisors ◦ Dragons’ Den H. G. Bohn 7
  8. 8. Funding Ladder 8
  9. 9. Friends & Family 9
  10. 10. Grants & Competitions 10
  11. 11. Crowd Sourcing 11
  12. 12. Loans & debt 12
  13. 13. Hire Purchase 13
  14. 14. Factoring & CID 14
  15. 15. Trade Finance 15
  16. 16. Revenue Based Finance 16
  17. 17. Business Angels 17
  18. 18. Venture Capital 18
  19. 19. Business Angels Scope of funds Key advantages & disadvantages Typical deal characteristics Finding Business Angels 19
  20. 20. Scope of funds 20
  21. 21. Advantages & disadvantages BAs may help the business grow. Money available quickly. No security required. Deals complex. Equity must be sold. High growth potential and exit. 21
  22. 22. Deal characteristics Deal size £50K - £250K Term 3 – 10 years Collateral required No Business valuation required Yes Sales Required No Sell equity Yes Business Development Help May be Cost of money 30% - 60% Deal time 2 to 9 months 22
  23. 23. Finding Business Angels Web searches Business Angel Networks ◦ Angels’ Den, Envestors, SWAIN, Xenos Corporate Finance Boutiques ◦ Beaufort Brokers, Exigo, Pegasus Funding Resources Networking ◦ Evangelising 23
  24. 24. Useful websites Business Link ◦ http://www.businesslink.gov.uk Meteorical ◦ http://www.meteorical.co.uk  Funding section  Business Angel Network listing 24
  25. 25. The Funding LadderBristol & Bath Enterprise NetworkTuesday, 29th March 2011Brian DorricottBusiness Mentor, Coach and Investorhttp://www.meteorical.co.ukbrian.dorricott@meteorical.co.uk 25

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