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Finance in Cornwall 2011

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Copy of presentation from Finance in Cornwall 2011 hosted by Winter Rule on 19 May 2011. This seminar provides a quickstep guide to the finance and support available to SMEs in Cornwall.

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Finance in Cornwall 2011

  1. 1. 1<br />Finance in Cornwall 2011- Cornwall is open for business<br />Richard Wadman, Corporate Finance Director, Winter Rule<br />
  2. 2. Administration<br />&<br />www.witerrule.co.uk<br />www.witerrule.co.uk<br />
  3. 3. www.winterrule.co.uk<br />3<br />Presenters and participants<br />
  4. 4. Structure of event<br />Background<br />BIS (National), Convergence (Cornwall)<br />Business Link and SWRDA<br />Finance, Business Support and Tax<br />The funds from grant through to VC<br />Overview only<br />Sufficient detail for you to ask one to one questions after / contact details on slides<br />Questions/ Networking<br />Finish 12 noon<br />www.winterrule.co.uk<br />4<br />
  5. 5. Government support to improve SMEs’ access to financeFinance in Cornwall 19 May 2011Seb Aslan – SME Finance Team<br />
  6. 6. Government support to improve SMEs’ access to financeFinance in Cornwall 19 May 2011Seb Aslan – SME Finance Team<br />
  7. 7. Business is the driver of economic growth and innovation<br /><ul><li> One business gets started every minute in England Wales
  8. 8. 4.8 million SMEs in the UK, 99.9% of businesses</li></ul>This Government has committed to two central things: to reduce the budget deficit and support private sector growth. <br />This Department is the ‘Department of Growth’. <br />That means stripping away the burdens and constraints on business and giving them a long term framework so that people say ‘Britain is open for business’<br />(Mark Prisk MP, Minister for Business and Enterprise)<br />
  9. 9. The UK is among the top countries in the world to start and grow a business<br />1st in Europe for ease of starting a business<br />Lowest barriers to entrepreneurship of all OECD countries<br />3rd in the world for supporting business financing needs<br />
  10. 10. Changes to Business Support and Access to Finance<br />
  11. 11. Business Support<br />Revamped Website – including Start Up Hub<br />40,000 Business Mentors<br />Business Coaching for Growth<br />Business Link advisory service closed from 25 November 2011<br />
  12. 12. Access to Finance<br />Evidence suggests that in the large majority of cases SMEs getting the bank finance they need<br />However – mismatch between what the data is telling us and what we are hearing from the Business Representative bodies<br />There are also areas of Market Failure – equity gap<br />
  13. 13. Enterprise Finance Guarantee (EFG)<br />Will now continue until 2014/15<br />Will enable up to £2bn of lending<br />New Export EFG – now live<br />
  14. 14. Bank Lending<br />Government has welcomed outcome of Merlin dialog<br />Banks will make available £190bn of new credit in 2011<br />£76bn of this new capacity will be to SMEs increase of 15%<br />Government working with the BBA and Business Finance Taskforce – data on availability/price of finance – stronger lending code/lending principles – internal appeals<br />
  15. 15. Equity Finance<br />Continuing programme of Enterprise Capital Funds – commitment of £200m over next four years<br />Government welcomed bank’s commitment to the creation of £2.5bn Business Growth Fund – will target SMEs and provide £2m - £10m to those with strong growth potential<br />
  16. 16. Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs)<br />Chancellor announced reforms to EIS and VCTs<br />From April the rate of EIS 30%<br />Next year the amount which can be invested will double<br />Size of company which can qualify for investment increasing<br />Amount which can be invested in a single company increasing to £10m<br />
  17. 17. Carleen Kelemen<br />Director<br />Convergence Partnership Office <br />for Cornwall and the Isles of Scilly<br />19 May 2011<br />
  18. 18.
  19. 19. Business Link – current position and future- Alison Miles <br />Or ‘Rumours of our demise have been greatly exaggerated’<br />
  20. 20. Current landscape:<br /><ul><li>The Business Link service currently provides information, advice and guidance to 45% of the business population in Devon, Cornwall & Somerset
  21. 21. 50,000 businesses provided with information in the last 12 months
  22. 22. Helped create over 1,700 new businesses in the last 2 years
  23. 23. Over 5,000 quality referrals for further support made to private public sector partners</li></li></ul><li>Changes to the Business Link service<br />Business Link service will continue to deliver quality information, advice and guidance up until 25th November. <br />In addition Peninsula Enterprise will provide the following contracted service:<br /><ul><li>Rural support
  24. 24. European funded growth and environmental support
  25. 25. High Growth skills service
  26. 26. International Trade
  27. 27. Specialist Social Enterprise support in Torbay and Plymouth</li></li></ul><li>Future Business Support Landscape<br /><ul><li>National website & national call centre
  28. 28. National Business Coaching for Growth programme
  29. 29. National mentoring network – 40,000 voluntary mentors
  30. 30. Entrepreneurial support for women, Black, Asian & Minority Ethnic groups & service leavers
  31. 31. Development of some Solutions for Business providers
  32. 32. for further information</li></li></ul><li>SWRDA closure and impact on funding <br />Closure 31 March 2012<br />Most funds of relevance to SMEs in Cornwall administered by SWRDA will carry on:<br /><ul><li>Take note of contact details on presenters slides
  33. 33. Speak to us
  34. 34. Website www.businesslink.gov.uk or www.bis.gov.uk</li></li></ul><li>Contact us on : 0845 602 3657<br />Alison Miles: ext 8903 <br />Max Strelling: ext 8347<br />Wayne Hackman: ext 8906<br />www.businesslink.gov.uk<br />In the South West peninsula the Business Link service is delivered by Peninsula Enterprise<br />
  35. 35. Grant for Business Investment<br />Paul Wilson – Business Investment Adviser <br />South West RDA<br />
  36. 36. What is Grant for Business Investment?<br />ERDF funded grant scheme to support innovative, knowledge based projects demonstrating productivity improvement with skilled employment.<br />
  37. 37. What type of project can be supported?<br /><ul><li>Investment in productivity improving plant and equipment in an existing business.
  38. 38. Investment in equipment as part of the commercial launch of a business.
  39. 39. Investment in additional employment.</li></li></ul><li>What’s not suitable for GBI?<br />Very small projects (£10k minimum grant).<br />Local services (including franchises).<br />Tourism normally ruled out through displacement.<br />Some sector restrictions.<br />
  40. 40. How much can I get?<br />Subject to State Aid ceilings for maximum (50% small business, 40% medium business, 30% large business).<br />Job numbers also determine the quantum. Average is equating to c£10,000 per job.<br />Need is the best place to start. Ensure rest of finance package is well developed.<br />
  41. 41. Eligibility criteria<br />Demonstrated need (No prior commitment).<br />Viability.<br />Eligible investment – normally capital projects but making increased use of salary support grants.<br />Productivity.<br />Skill levels.<br />Jobs.<br />
  42. 42. Quality features<br /><ul><li>ERDF Cross Cutting Themes (Low Carbon and Equality & Diversity)
  43. 43. High skill levels / salary levels (£20k minimum)
  44. 44. Innovation and R&D
  45. 45. Training
  46. 46. Exports</li></li></ul><li>Application process<br /><ul><li>Ensure broadly eligible and supportable before applying.
  47. 47. Full application requires business plan, financials (historic and projections) and application form.</li></li></ul><li>Payments and conditions<br /><ul><li>Paid in arrears by instalments linked to investment, jobs and productivity
  48. 48. Conditions to make the investment, deliver the jobs and achieve productivity growth
  49. 49. Security – risk dependant. (Debenture or Parental Guarantee)</li></li></ul><li>Contacts information/support<br />Paul Wilson<br />paul.wilson@southwestrda.org.uk<br />01752 234855<br />Or<br />Richard Hoskin<br />richard.hoskin@southwestrda.org.uk<br />01752 234824<br />www.southwestrda.org.uk/gbi<br />
  50. 50. The Low Carbon Grant Fund (LCGF)Stuart Farmer Cornwall Development Company<br />
  51. 51. ERDF Low Carbon Grant Fund (LCGF)<br /><ul><li>A £5M ERDF funded scheme
  52. 52. Launched by the Convergence Programme for Cornwall & the Isles of Scilly on the 26th April 2011
  53. 53. Providing grants of between £70K to £1M (subject to match)
  54. 54. Support eligible businesses to reduce carbon emissions by
  55. 55. Improving Energy / Resource Efficiency
  56. 56. Delivering Green House Gas reductions through innovation
  57. 57. Enable generation of Low Carbon Energy </li></li></ul><li>Whocan apply for LCGF?<br /><ul><li>All ERDF eligible businesses in Cornwall and IOS</li></ul>SME’s maybe eligible up to 50% funding<br /> Non SME’s eligible up to 30%<br /><ul><li>Applicants in a position to start their project within 6 months of the grant being awarded
  58. 58. New businesses are not ruled out, however additional financial due diligence will be sought</li></li></ul><li>What must applicants consider<br /><ul><li>Two stage process,
  59. 59. Stage 1, Open call for Expressions of Interest (Closes 01st June 2011)
  60. 60. Stage 2, Detailed business plan
  61. 61. LCGF will invest in projects that have GHG (Greenhouse Gas) Reduction as their primary outcome where
  62. 62. They are not supported through existing schemes (FIT / RHI etc…..)
  63. 63. Mandated through the existing regulatory framework
  64. 64. Would otherwise be undeliverable due to issues of commercial viability
  65. 65. Links to research and higher education institutes (such as ESI)</li></li></ul><li>Whatwill EOI’s be assessed on?<br />Weighting<br />20%<br />60%<br />10%<br />10%<br /><ul><li>Project Description </li></ul> (innovation will be taken into account when scoring<br /><ul><li>Carbon Saving Calculator, </li></ul> (GHG Saved Per £ Invested)<br /><ul><li>Economic benefits to the business </li></ul> (productivity / jobs)<br /><ul><li>Wider economic benefits to Cornwall & IOS (Supply-chain development/ R&D Links/ Best practice dissemination)
  66. 66. Call For EOI Closes 01st June 2011
  67. 67. Contracts Expected Autumn 2011</li></li></ul><li>Contact: Janet Bowen at jbowen@cornwall.gov.uk<br />Cornwall CouncilCounty HallTruro TR1 3AYTel: 0300 1234 100www.cornwall.gov.uk<br />
  68. 68. Funding for Business Improvement Initiatives (vouchers)<br />Josie Gough – ERDF Secretariat <br />Josie.gough@southwestrda.org.uk<br />
  69. 69. What? Vouchers to cover up to 50% of the costs for businesses on projects to realise their growth ambitions. <br />Why? Private sector feedback on how to invest Convergence funding in the 2nd half of the Programme, maximising the impact of funding.<br />Who? To be administered by objective organisation with a private sector led decision making panel. All ERDF eligible businesses looking to significantly grow will be eligible to apply.<br />
  70. 70. How? Details of how to apply will be available once the contract has been award to the administration body. Commitment to proportionality! <br />When? Hoping to get a contract finalised this summer, subject to a brief set up period, applications should be open towards the end of 2011. <br />
  71. 71. RURAL DEVELOPMENT PROGRAMME FOR ENGLAND (2007-2013)Catherine Martin<br />
  72. 72. 44<br />RDPE Funding in Cornwall <br />Axis 1: Improving the competitiveness of the agricultural and forestry sector.<br />RDPE funds available under Axis 1for;<br />Adding value to agricultural products<br />Training and skills<br />On-farm advice and small capital grants<br />Axis 3: Improving rural quality of life and diversification of the rural economy.<br />RDPE funds available under Axis 3 for;<br />Farm Diversification<br />Rural Micro-enterprise<br />Community and Social Enterprise<br />
  73. 73. 45<br />RDPE moving forwards<br />Transfer to Defra from 1st July 2011<br />Programme currently open for business<br />More information will become available in the coming weeks<br />Current team transferring across to Defra.<br />
  74. 74. 46<br />
  75. 75. Springboard Fund<br />Bob Dow<br />Project Director<br />Trellisick Gardens<br />19th May 2011<br />
  76. 76. Aims of the Springboard Fund<br />Financial help to projects that will make an<br />economic impact in Cornwall or Devon<br />Grants or loans to worthy projects that<br />would otherwise be unlikely to proceed<br />
  77. 77. Springboard Fund<br />Open to eligible projects both from businesses and from not for profit organisations <br />Projects from any sector<br />Funding can be for early stage activity to start a new project or to make a step change in growth<br />
  78. 78. What the Springboard Fund does<br />Awards of £30K to £150K <br />Application process is staged:-<br />Eligibility Initial review Full evaluation<br />Final stage being a presentation to the Panel<br />
  79. 79. Eligibility<br />Significant impact on the economy of Cornwall or Devon through new job creation<br />Other potential funding sources must have been exhausted (minimum of 25% match funding<br />The project must demonstrate viability<br />
  80. 80. Projects with potential<br /><ul><li>Impact extending beyond applicant organisation
  81. 81. Creation of new high calibre jobs
  82. 82. Creation of activity/environment that will facilitate other economic benefits in the future
  83. 83. Partial funding already secured/identified
  84. 84. Additional benefits such as positive environmental impact or up-skilling of jobs</li></li></ul><li>Projects not likely to succeed<br /><ul><li>Poor business/project plan lacking understanding
  85. 85. Impact only on profitability of applicant organisation
  86. 86. Few new jobs created/low skilled
  87. 87. Little future benefit
  88. 88. No other funding source explored or identified
  89. 89. Project could proceed without Springboard funding
  90. 90. Supporting a non viable business</li></li></ul><li>How to apply<br />All applications must be submitted via the application form on the website<br />Website has eligibility criteria, application form and further details<br />www.springboardfund.co.uk<br />
  91. 91. The South West Loans Fund<br />Launched 2009<br />Part of the South West ERDF 2007-2013 programmes<br />
  92. 92. The South West Loans Fund<br />Fund commissioned by:<br />South West RDA<br />Fund holder and contractor:<br />South West Investment Group (Capital) Ltd<br />Fund Managers:<br />SWIG Services Ltd<br />Small Loans for Business<br />Loans up to £50,000 <br />FC Fund Managers <br />Finance for Business<br />Loans up to £250,000 <br />
  93. 93. The South West Loans Fund<br />The Fund provides loans on commercial terms <br />To: <br /><ul><li>SMEs (including start-ups)
  94. 94. Based in South West Region (or relocating to)
  95. 95. Growth or growth potential
  96. 96. Financially viable proposition
  97. 97. Planned requirement for investment
  98. 98. Identified finance package
  99. 99. Eligible for ERDF
  100. 100. Cannot raise sufficient finance from banks and other sources</li></li></ul><li> The South West Loans Fund<br />ERDF - What the Fund can support<br />Capital expenditure<br />Working capital<br />Net economic benefit - ‘added value’, e.g:<br />Business A:<br />Start-up manufacturing innovative, interactive youth sports and exercise equipment. Contract to supply, but investment needed for full production set up. £50,000 SL4B growth loan agreed. The business now has a small production unit and is creating skilled jobs for local people.<br />Business B<br />Existing company designs, supplies and installs a range of energy-saving products including lighting systems for high bay warehouses and soft start motor controllers. £100K F4B loan approved to support its expansion in the UK and key export markets.<br />
  101. 101. The South West Loans Fund<br />ERDF - what the Fund cannot support<br />Displacement (e.g. Pure retail or local domestic services)<br />Other exclusions<br /><ul><li>Primary agriculture
  102. 102. Financial services
  103. 103. Speculative property development
  104. 104. Activities that the State ‘should provide’ e.g. education, health</li></ul>Re-financing <br />Not lender of last resort to business ‘in difficulties’ <br />
  105. 105. The South West Loans Fund<br />Process<br />Contact the appropriate Fund Manager<br />If we think you are eligible, complete a 2-page form <br />This helps to assess whether or not to proceed to full application<br />If all OK – proceed to full application and business plan<br />Turn around time 2-6 weeks<br />
  106. 106. The South West Loans Fund<br />At 19 May 2011:<br />
  107. 107. The South West Loans Fund<br />Contact:<br />Small Loans for Business (up to £50K)<br />SWIG Services Ltd<br />Lowena House<br />Glenthorne Court<br />Truro Business Park<br />Threemilestone<br />TRURO TR4 9NY<br />01872 223883<br />info@southwestinvestmentgroup.co.uk<br />www.southwestinvestmentgroup.co.uk<br />Finance for Business (up to £250K)<br />FC Fund Managers<br />14 High Cross<br />TRURO TR1 2AJ<br />01872 272288<br />enquiries@fcfundmanagers.com<br />www.fcfundmanagers.com<br />
  108. 108. SWAIN<br />Finance in Cornwall<br />19th May 2011<br />Bruce Colley – Investment Director<br />
  109. 109. What do we do?<br />
  110. 110. Process?<br />
  111. 111.
  112. 112. Investment Attractiveness<br />Business plan demonstrating significant sustainable growth<br />Unique product – the right price – barriers to entry – protected IP …<br />A management team -> ability to create profits (capital growth) <br />An exit strategy<br />A realistic valuation<br />Commitment<br />
  113. 113. Facts & stats<br />
  114. 114. Facts & stats<br />
  115. 115. Cloud Nine Offering<br />Low-cost modular design – fitted interiors<br />Microgeneration ready <br />Sustainable materials<br />Lego configurations<br />Short-term or long term site use<br />Affordable eco-housing<br />Indefinite life buildings<br />Can use “difficult” sites<br />Kernow Eco Housing Ltd<br />
  116. 116. The Company<br />Cornish Sea Salt is a food manufacturing business that harvests sea water to produce a pure and natural culinary sea salt in a purpose built facility. Situated just 8 metres from Grade A accredited waters – the highest to denote water purity – at Porthkerris in Cornwall.<br />The company was incorporated in July 2004 and commenced trading in February 2008, following a three year project to identify and secure a site, source and commission the technology, undertake market research and raise investment finance.<br />With a production capacity of 500 tonnes per annum, Cornish Sea Salt has developed a process that blends age-old chemistry with innovative and energy-efficient technology that is environmentally benign. <br />The company owns the harvesting building and has a X year lease for the Porthkerris site; it also has a X year lease for the Pol Gwarra foreshore and leases a 250m² warehouse unit at St Keverne (less than 1 mile from the harvesting plant).<br />Cornish Sea Salt Co bespoke harvesting plant Pol Gwarra, Lizard Peninsula<br />Key Dates<br />Cornish Sea Salt established – July 2004<br />Porthkerris site secured – Dec 2006<br />Investment agreement – June 2007<br />Harvesting building completed – Sept 2007<br />Salt Plant commissioned – Dec 2007<br />Trading commenced – Feb 2008<br />Key Assets<br />Harvesting building - £XXX,XXX<br />Salt making equipment - £XXX,000<br />Porthkerris lease – X years<br />Foreshore lease – X years<br />Warehouse lease – X years<br />Brand trade marks & domains<br />
  117. 117. 20/05/2011<br />72<br />Adding value<br />Raw <br />Fleece<br />Scour and<br /> Card<br />Knitting and<br /> weaving<br /> yarns<br />Fabric<br /> Throws<br /> Blankets<br /> Scarves<br />Garments <br /> and <br /> furnishings<br />Buy in at<br /> 50p-£10<br /> per Kg.<br />Cost £6-7<br /> per Kg.<br />Cost £14-20<br /> per Kg.<br />Cost £20-40<br /> per Kg.<br />Cost <br /> £50-100<br /> per item<br />Add to blends<br />£6-12<br /> per Kg.<br />£15 trade<br /> £30 retail<br /> per Kg.<br />£25-40 trade<br /> £60-120 <br /> retail per Kg.<br />£35 trade<br /> £90 retail<br /> per metre<br /> (o.5 Kg.)<br />£100-£500<br /> per item <br /> (o.5 Kg.)<br />
  118. 118. Data analysis<br />What we do<br />Data<br />Anonymised data and information<br />Information<br />Electricity<br />Gas<br />Water<br />Temperature<br />Humidity<br />Heating<br />Feedback devices<br />Manager / policy maker<br />Mobile phone<br />Users<br />Screens<br />
  119. 119. Deal profile<br />87 deals (14 deals per year);<br />63 businesses (64% first round); <br />£6.75m from SWAIN investors;<br />£44m total finance;<br />Ave. Stake 18.5%<br />Typical post money valuation <£1m<br />Failure rate approx 20%<br />
  120. 120. Introduction to Venture Capitalby Alistair BrewMay 2011<br />
  121. 121. INTRODUCTION TO VENTURE CAPITAL<br /><ul><li>Introduction to Octopus Ventures
  122. 122. What we do and look for
  123. 123. Current Climate for fund raising
  124. 124. Tips for fund raising
  125. 125. Conclusions</li></li></ul><li>OCTOPUS VENTURES<br /><ul><li>Division of Octopus Investments
  126. 126. Fast growing fund management company
  127. 127. £2bn FUM
  128. 128. £300m+ in unquoted VCTs
  129. 129. One of the most active SME investors
  130. 130. 24 deals in 2010 & 3 deals in 2011 to date
  131. 131. £500k-5m investment size
  132. 132. Early stage, growth capital and MBO’s
  133. 133. Equity, mezzanine and debt (via Octopus Specialist Finance)
  134. 134. Portfolio of over 60 companies</li></li></ul><li>WHAT WE DO<br />We partner exceptional entrepreneurs who wish to build big businesses that create, transform or dominate an industry sector. <br />We partner these businesses through their growth prior to selling the business and our stake to trade or financial purchasers. <br />Our objective is to make returns of multiples of our original investment from each business in which we invest.<br />
  135. 135. WHAT WE DO<br />We partner exceptional entrepreneurs who wish to build big businesses that create, transform or dominate an industry sector. <br />We partner these businesses through their growth prior to selling the business and our stake to trade or financial purchasers. <br />Our objective is to make returns of multiples of our original investment from each business in which we invest.<br />EQUITY OWNERSHIP<br />
  136. 136. TYPES OF DEAL<br /><ul><li>Development Capital
  137. 137. Acquisition Finance - Good time for bolt-on acquisitions
  138. 138. Competition struggling
  139. 139. Prices can be very low
  140. 140. Not all cash up front
  141. 141. Change of Ownership situations - MBOs</li></li></ul><li>WHAT WE LOOK FOR IN A BUSINESS<br /><ul><li>Strong growth potential deriving from inherent competitive advantage
  142. 142. Critical
  143. 143. Management team
  144. 144. Product/Service and proven business model
  145. 145. Growth Market
  146. 146. Other
  147. 147. Assets including intangible assets such as a brand
  148. 148. Deal characteristics – pricing, ‘skin in the game’
  149. 149. Exit prospects</li></li></ul><li>VENTURE CAPITAL RETURNS<br /><ul><li>Target Returns
  150. 150. 3x + money multiple
  151. 151. 30% + IRR over 3 - 4 years
  152. 152. Where returns come from
  153. 153. Earnings growth
  154. 154. Multiple Arbitrage
  155. 155. [Gearing]</li></li></ul><li>VENTURE CAPITAL RETURNS<br /><ul><li>Target Returns
  156. 156. 3x + money multiple
  157. 157. 30% + IRR over 3 - 4 years
  158. 158. Where returns come from
  159. 159. Earnings growth
  160. 160. Multiple Arbitrage
  161. 161. [Gearing]</li></ul>“GROWING THE CAKE”<br />
  162. 162. FUND RAISING - A LOOK BACK....<br /><ul><li>2007 The end of the road:
  163. 163. Easy debt – too much money
  164. 164. Box ticking due diligence
  165. 165. Lower quality thresholds
  166. 166. High prices
  167. 167. Unrealistic projections
  168. 168. THE TOP OF THE MARKET Anybody could raise money</li></li></ul><li>IMPACT OF DOWNTURN AND CREDIT CRUNCH<br />2008/9<br /><ul><li>No money available from banks or investors
  169. 169. Companies contracting
  170. 170. Conditions unpredictable
  171. 171. Weaker companies had no chance
  172. 172. Some government initiatives (Capital for Enterprise)
  173. 173. Very few deals
  174. 174. But interest rates low</li></li></ul><li>THE NEW WORLD<br />Late 2010 onwards<br />Appetite to do deals now returning but……<br /><ul><li>Limited bank funding available (sub 2x EBITDA)
  175. 175. VC price expectations lower
  176. 176. High levels of Due Diligence
  177. 177. High quality threshold</li></ul>New environment still evolving but VC’s looking for high quality deals at low prices and limited bank debt<br />
  178. 178. FUND RAISING - GET IN SHAPE<br /><ul><li>Clear vision together with ample detail
  179. 179. Know your business model/ adapt it
  180. 180. Good MIS: data is critical
  181. 181. Full management team (New Hires?)
  182. 182. Is Finance Department adequate
  183. 183. Sales management and pipeline analysis</li></ul>Investment readiness (but should be doing this anyway)<br />
  184. 184. FUND RAISING – THE DEAL<br /><ul><li>What’s the funding requirement/risk profile
  185. 185. Consider which segment of the VC market to approach
  186. 186. Be clear about what the priorities are in the deal
  187. 187. Terms important but also delivery and relationship
  188. 188. Look at post-deal value add
  189. 189. Time and energy commitment in the process
  190. 190. Flexibility</li></li></ul><li>TAKE ADVICE<br /><ul><li>Objective external advice can be invaluable
  191. 191. Financial/operational/integration/strategic
  192. 192. Listen but you do not need to accept
  193. 193. Do your due diligence on advisor</li></li></ul><li>CONCLUSIONS<br /><ul><li>It doesn’t suit everyone and it’s expensive but….
  194. 194. Venture Capital can transform your business
  195. 195. Fund raising is difficult
  196. 196. Do the groundwork ahead of starting process
  197. 197. Seek outside advice
  198. 198. Show vision and know the detail</li></li></ul><li>Winter Rule 19 MayUEC Enterprises LtdDr Mark Scibor-RylskiRob Misselbrook CFA<br />91<br />
  199. 199. What we do<br />92<br />
  200. 200. How we select – Proactive approach to-Value Proposition – why will customers buy your product or service-Market Potential – local, UK, International-Barriers – IP, know-how, relationships-Management – Experience, knowledge-Financials – What’s required, structure[ESI Impact – Environmental Benefit, Job Creation]<br />93<br />
  201. 201. 94<br />FITs, RHI and other finance for SME?<br />Aimee Phillips, Corporate Finance Assistant, Winter Rule LLP<br />
  202. 202. Overview<br />SW Cleantech Co-investment Fund<br />FITs<br />RHI<br />Energy Efficiency Financing Scheme<br />PESCA<br />EFF<br />UCP<br />R&D<br />UKTI<br />Regional Growth Fund<br />Overview and website address or contact<br />AAG: At a gallop!<br />www.winterrule.co.uk<br />95<br />
  203. 203. South West Cleantech Co-Investment Fund<br />Loan Fund to match with equity invested in Cleantech company<br />Minimum £50k; maximum £100k<br />Requirements of Company<br />SW<br />Cleantech<br />Requirements of Investment<br />Keystone Investor<br />Fresh issue of ordinary shares<br />Initial contact and more details: SWAIN<br />www.swain.org.uk/CleanTech.aspx<br />www.winterrule.co.uk<br />96<br />
  204. 204. FITs<br />Feed-In Tariffs<br />Paid by energy company to the generator of renewable electricity<br />Range of tariffs <br />FITS review published March 2011<br />FITs and Grants?<br />FITs and EIS<br />www.decc.gov.uk<br />www.winterrule.co.uk<br />97<br />
  205. 205. RHI<br />Renewable Heat Incentive<br />The heat generation equivalent to FITs<br />Details announced in March 2011<br />Two phase introduction<br />1st aimed at non-domestic/ ‘big heat users’: Summer 2011?<br />2nd phase for domestic / align with Green Deal: October 2012?<br />Range of tariffs <br />www.decc.gov.uk<br />www.winterrule.co.uk<br />98<br />
  206. 206. Energy Efficiency Financing Scheme<br />Successor to interest free loans from Carbon Trust<br />“easy, affordable and flexible ... Scheme brought to you by Carbon Trust Implementation Services (CTIS) and Siemens Financial Services”.<br />‘Leases, loans and other financing options”<br />Launched April 2011<br />Energy Efficient Equipment purchases<br />£1,000 +<br />Financing options designed to match with energy savings<br />www.energyefficiencyfinancing.co.uk<br />www.winterrule.co.uk<br />99<br />
  207. 207. PESCA<br />Links to fishing industry <br />but not retail or fishing vessels<br />PESCA business development fund<br />Interest free loans of up to £20k; one off admin fee of 5%<br />60% of allowable expenditure<br />Capital <br />Marketing costs<br />Repayable over 5 years <br />www.southwestinvestmentgroup.co.uk<br />John Peters – john@southwestinvestmentgroup.co.uk<br />www.winterrule.co.uk<br />100<br />
  208. 208. EFF<br />European Fisheries Fund<br />fishing industry to become more sustainable and to remain profitable<br />£4.8m available in Cornwall<br />Axis 2: processing facilities and marketing fully spent in Cornwall<br />May 2011 announcement on movement of funds b/w Axis?<br />www.marinemanagement.org.uk<br />Justin Williams justin.williams@marinemanagement.org.uk<br />www.winterrule.co.uk<br />101<br />
  209. 209. UCP<br />Unlocking Cornish Potential<br />“UCP matches talented graduates with progressive Cornish companies to fuel innovation, growth, creativity, competitiveness and economic prosperity in Cornwall.”<br />Projects between 6 and 12 months<br />Financial assistance for Training and Mentoring<br />Project Investment Funds available<br />Andy Peters andy.peters@cornwall.ac.uk<br />www.winterrule.co.uk<br />102<br />
  210. 210. Research & Development Grant<br />Open 4th April 2011<br />SMEs – in the South West<br />£25,000 - £250,000<br />3 types of grant <br />Markets<br />Concept<br />Prototype<br />Judging 5 times per year (7th July)<br />www.innovateuk.org<br />www.winterrule.co.uk<br />103<br />
  211. 211. UKTI – ‘taking Cornwall to the world’<br />£2million Sponsored by UKTI<br />Business network group <br />Cornwall businesses exporting<br />Support for:<br />Overseas Market Introduction Service<br />Export Marketing Research Scheme<br />Passport to Export<br />Gateway to Global Growth<br />Market Visit Support<br />Tradeshow Access Programme<br />Training Workshops<br />Export Communication Review<br />www.exportcornwall.co.uk<br />Michael Franks michael.franks@uktisouthwest.org.uk<br />www.winterrule.co.uk<br />104<br />
  212. 212. Regional Growth Fund<br />£1.4bn: England 2011 to 2014<br />Competitive bidding process<br />Lever private sector growth and job creation<br />Private sector and Public private partnerships can bid<br />Targeted at regions ‘transitioning’ from public to private sector<br />£1m minimum<br />Next deadline = 1 July 2011<br />www.bis.gov.uk/RGF<br />RGF Roadshow – Plymouth 10 June 2011<br />www.winterrule.co.uk<br />105<br />
  213. 213.
  214. 214.
  215. 215. WHAT IS COACHING?<br />“Coaching is unlocking a person’s potential to maximise their own performance. <br />It is helping them to learn rather than teaching them.”<br />
  216. 216. WHAT IS COACHING?<br />coaching and mentoring is about using our experience and training to help you to find the answers yourself. Through good questioning, followed by inspired analysis, reflection and detailed action planning. The success of coaching and mentoring will depend upon you: your ability to change your behaviour, or see things in a different way: to act on the action plans.<br />Coaching is a journey: not a quick fix. There are no right or wrong answers except in legal issues. It takes time, it will be challenging, hard work and it will be disruptive. Both the business and the coach must be agnostic as to what the solutions are.<br />
  217. 217.
  218. 218. Coachingfor High Growth<br /><ul><li>Help with creative thinking
  219. 219. Looking for a new perspective on your business
  220. 220. Refining your business model
  221. 221. Identifying new channels and markets
  222. 222. Developing new products and services
  223. 223. Sourcing new technologies
  224. 224. Raising finance
  225. 225. Developing your team
  226. 226. Extending your geographical reach
  227. 227. Achieving your goals</li></li></ul><li>
  228. 228. Starting a high growth business<br /><ul><li>Developing and delivering your business plan
  229. 229. Developing your products and services
  230. 230. Identifying channels and markets
  231. 231. Securing finance
  232. 232. Building your team
  233. 233. Sourcing new technologies
  234. 234. Extending your geographical reach
  235. 235. Achieving your goals </li></li></ul><li>Leo Dunne<br />Leo started his career with Midland Bank/HSBC in the early 80’s, gaining vast experience in the finance sector.<br /> From 1997 he was Investment Manager for the HSBC UK Enterprise Fund for Greater London, part of a network of regional funds looking to provide SME's with initial investment of up to £250k. <br />He then worked as Investment Director for Ferranti Capital Ltd. From May 2006 Leo worked as a business advisor for range of companies including travel and technology firms <br />2008 became the Manager of Thames Valley Investment Network (TVIN), the business angel network based in the Thames Valley. <br />Leo helps businesses understand their funding needs and how these may be met. He can also advise on a wide range of commercial issues including compliance, regulatory requirements<br />
  236. 236. Mike Jobson<br /><ul><li>Started career as an IT Engineer at NCR.
  237. 237. Sales, marketing and management roles with Alcan and Colgate Palmolive Ltd,
  238. 238. Guinness G.B. as Regional Managing Director
  239. 239. Diageo PLC in the UK and Africa, latterly as Sales and Marketing Director in Lagos, Nigeria.
  240. 240. Extensive experience within food and drink, retail and FMCG markets.
  241. 241. specialises in sales, marketing and business development including performance management, </li></li></ul><li>Richard Reed<br />Earth scientist and engineer <br /> Involved in the natural resources industries for most of his working life, <br />10 year career within the water and petroleum industries<br /> Joined the Cornish based marine drilling company Seacore. As commercial director he acquired considerable experience in developing and sustaining the growth of an independent business over many years and was subsequently elected managing director, a position he held for 5 years until the acquisition of the business by a European multi-national.<br />Richard has extensive management experience covering business development strategy and financial management, raising corporate finance, commercial and contract negotiations on both a domestic and international basis. <br />
  242. 242.
  243. 243. Coaching <br />A High Growth Business<br />Thank you<br />www.growcornwall.co.uk<br />Clare Whitney<br />
  244. 244. A very warm welcome to…The spirit ofCollaborationWhere might a collaboration take your business?<br />
  245. 245. Our Vision:To improve Cornwall and the Isles of Scilly’s competitive advantage by encouraging and enabling a collaborative culture of thinking throughout Cornish-based businesses <br />
  246. 246. Educate<br /> Facilitate<br /> Manage<br /> Assist<br />
  247. 247. What is Collaboration?<br />
  248. 248. Collaboration is..<br />“A co-operative arrangement in which two or more parties (which may or may not have any previous relationship) work jointly towards a common goal”<br />
  249. 249. reasons to <br />COLLABORATE<br />
  250. 250. Increase sales outputs<br />Reduce costs<br />Develop new products<br />Share risk & reward<br />Access new markets<br />Improve productivity<br />Access/improve skills<br />Joint tendering<br />Access new technologies<br />Leverage resources<br />
  251. 251. There are 3 broad types of Collaboration:<br />1. Co-development (Research & Development)<br />2. Manufacturing & Production<br /> (Supply side) <br />3. Marketing & Distribution<br /> (Demand side)<br />
  252. 252.
  253. 253. “As a result of Partner to Succeed’s involvement, we are now well on the way towards launching a co-branded legionella warning system with Silvertree Engineering.”<br />Robin Proctor<br />Silvertree Engineering Ltd<br />
  254. 254. “There is no doubt that this could have a massive impact on both our profit margins, and it’s very exciting for all those involved”. <br />Mike Quest<br />Managing Director, QES Ltd<br />
  255. 255.
  256. 256. “I knew the product could do better, and with Partner to Succeed’s help I proved that to a UK based partner. We are now collaborating to manufacture and distribute Muksak from the UK. If there are any doubts in your mind about what to expect, Partner to Succeed can help you answer them”.<br />Alison Vaughan<br />Owner, Muksak<br />
  257. 257.
  258. 258. Why doesn’t everyone collaborate?<br />
  259. 259. Trust<br />
  260. 260. Communication<br />
  261. 261. Willingness to commit<br />
  262. 262. It’s not the ‘norm’<br />
  263. 263. Consider it?<br />
  264. 264.
  265. 265.
  266. 266.
  267. 267. <ul><li>Project Management
  268. 268. Up to 8 Days of Support
  269. 269. Access to secure online software
  270. 270. Draft documentation
  271. 271. Access to Collaboration Credit</li></li></ul><li>
  272. 272.
  273. 273. Sales GrowthCollaboration Clubs<br />Discover how you can sell more by working together…<br />
  274. 274. "This has been the start of a road I've been trying to travel along for the past 2 years through a different approach. It has given me a real understanding of different sales approaches”<br />Phil Allatt<br />IT West Ltd<br />
  275. 275. Resource EfficiencyCollaboration Clubs<br />Discover how you can save money and reduce your carbon output by working together…<br />
  276. 276. “I didn’t sleep last night after the RECC yesterday. It was really more beneficial than expected and I have a plethora of ideas on my mind . . . . “<br />Mark Wright<br />Piran Technologies Ltd<br />
  277. 277. Coming soon . . . . . <br />Managing Capacity<br />Improving Competitiveness<br />
  278. 278.
  279. 279. Food for thought?Any collaboration ideas?<br />
  280. 280. For further information or advice visitwww.partnertosucceed.co.ukor call 01872 613000<br />
  281. 281. Diana Lobb<br />Leadership & Management Adviser (South West)<br />Covering Cornwall<br />
  282. 282. Leadership and Management Advisory Service – 2011 to 2012<br />Context<br />Think of a Successful Leader. This can be someone from anywhere in the world at any point in time<br />
  283. 283. Leadership and Management Advisory Service – 2011 to 2012<br />Now think of why you thought of them, why do you think this person was such a successful leader?<br />
  284. 284. Alexander the Great<br />
  285. 285. Catherine the Great<br />
  286. 286. Winston Churchill<br />
  287. 287. Mahatma Gandhi<br />
  288. 288. Leadership and Management Advisory Service – 2011 to 2012<br />Questions<br />Do You have a clear vision?<br />Do You have clear goals for your business?<br />Do You know what you want to achieve and how to get there?<br />Do You have the skills & knowledge to take your business where you know it can go?<br />Can You inspire and motivate other people to share your vision and help you achieve your business goals?<br />
  289. 289. Leadership and Management Advisory Service – 2011 to 2012<br />Answers<br />If you hesitated before answering any of those questions.<br />If you thought ‘I do all of that and pretty well but I know I can be better’<br />If you thought ‘I am not great at some of that and my business will suffer as a consequence’<br />The Leadership & Management Advisory Service may be of benefit<br />
  290. 290. Leadership and Management Advisory Service – 2011 to 2012<br />How Does is Work?<br />A programme running until March 2012 delivered by Skills South East Ltd in the South East and South West<br />The Leadership & Management Advisory Service can help identify and prioritise the right development for you to gain the skills and knowledge you need to help your business be more successful.<br />We may be able to offer up to £1000 of funding to help pay for that development <br />
  291. 291. Leadership and Management Advisory Service – 2011 to 2012<br />Eligibility<br />Are you the owner, MD, CEO or senior leader of your business or Social Enterprise?<br />Employ 2 – 249 people (full time equivalent) including yourself<br />Display the potential for high or fast growth<br />You can access up to £1,000 of funding, 50% match funded, to help with the costs of your chosen development <br />Start and claim costs of development within 90 days of grant approval<br />
  292. 292. Leadership and Management Advisory Service – 2011 to 2012<br />How do you apply?<br /><ul><li>For more information please speak to me, Diana Lobb 07917 113489 diana.lobb@skillssoutheast.co.uk,
  293. 293. pick up a flyer
  294. 294. or visit www.skillssoutheast.co.uk 0845 026 4298 info@skillssoutheast.co.uk</li></li></ul><li>165<br />The Tax Dog wags it’s tail...<br />Scott Bentley, Small Business Partner, Winter Rule LLP<br />
  295. 295. Don’t let tax tail wag the dog<br />But need to consider tax stimulus for companies to invest <br />Capital allowances<br />R&D<br />Substantial shareholdings exemptions<br />And to be invested in:<br />Enterprise Investment Scheme (EIS)<br />Entrepreneurs Relief (the 10% bit)<br />www.winterrule.co.uk<br />166<br />
  296. 296. Research and Development tax relief (for SMEs)<br />For companies only<br />Enhanced tax relief for allowable R&D costs<br />Relief for SMEs:<br />Up to 31 March 2011 175%<br />From 1 April 2011* 200%<br />From 1 April 2012* 225%<br />If loss making, can receive cash for % of R&D allowable costs or increase loss carried forward<br />14%<br />Was limited to PAYE/ NI paid * (* = s/t EU approval)<br />Issue remains – what is R&D?<br />www.winterrule.co.uk<br />167<br />
  297. 297. Capital allowances<br />Tax deduction for capital expenditure<br />Changes in March 2011 budget (effective 1 April 2012)<br />Writing down allowances will be reduced to 18% and 8%<br />Annual Investment Allowance reduced to £25,000 <br />For Enterprise Zones in assisted areas, where there is a strong focus on high value manufacturing<br />Enhanced capital allowances (ECA)<br />For equipment that meets published energy-saving criteria (http://www.eca.gov.uk/etl)<br />For capital expenditure or equivalent used for R&D<br />www.winterrule.co.uk<br />168<br />
  298. 298. Substantial Shareholdings Exemption<br />Exemptions on gains made by companies on the sale of qualifying shares<br />Investor and investee must be trading or part of a trading group<br />Must own > 10% of ordinary share capital<br />Must hold investment for at least 12 months<br />www.winterrule.co.uk<br />169<br />
  299. 299. EIS – overview<br />Enterprise Investment Scheme<br />Tax relief for qualifying individuals investing in new ordinary shares in qualifying companies<br />Tax reliefs<br />Income tax relief (30% of investment between £500 and £500,000)<br />Capital Gains tax relief on any gain if shares held for three years<br />Deferral of other capital gains at point of investment<br />www.winterrule.co.uk<br />170<br />
  300. 300. EIS – the good news<br />Certain limits on qualifying companies will be increased as follows with effect from shares issued after 5 April 2012:<br />Number of full-time employees – 250<br />Limit on gross assets increased to £15 million before the investment<br />Maximum annual amount that can be invested in the company increased to £10 million<br />Maximum annual amount that can be invested by an individual in all EIS companies is £1 million<br />www.winterrule.co.uk<br />171<br />
  301. 301. Entrepreneur’s Relief<br />Only applies to individuals (some trustees)<br />Shares in a personal trading company<br />Owned for minimum12 months prior to sale<br />£10million lifetime limit for individuals from 6 April 2011<br />Personal trading company<br />> 5% old share capital with > 5% voting rights<br />You must be an officer or employee of that company<br />Company must be trading<br />www.winterrule.co.uk<br />172<br />
  302. 302. 173<br />Finance in Cornwall 2011<br />Wrap up by John Mitchell, Chairman/Managing Partner, Winter Rule<br />
  303. 303. www.winterrule.co.uk<br />174<br />Thank you: Presenters, participants and Amy<br />
  304. 304. The Future – thoughts and actions<br />Immediate: Q&A<br />Convergence until 2013<br />The future of finance is equity<br />Cornwall is a great place to do business, increasing national profile<br />Sharps<br />Celtic Sheepskin<br />Service sector to match business requirements<br />www.winterrule.co.uk<br />175<br />
  305. 305. Final thought<br />www.winterrule.co.uk<br />176<br />

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