Copyright ©UWSPLtd2013
UWSP Access to Finance
Tim Powell
Tim.powell@uwsp.co.uk
Copyright ©UWSPLtd2013
Warwickshire Rural Growth Network
Project
• Pilot Project The Rural Economy Grant – Micro
Enterpris...
Copyright ©UWSPLtd2013
100 Interactions - Business Type
Copyright ©UWSPLtd2013
Type of Funding Sourced
Copyright ©UWSPLtd2013
Sources of Funding Used
Copyright ©UWSPLtd2013
Sources of Finance
Concept/ Seed
/Micro Existing
Start-ups/Existing
Early Stage/Growing Later Stage...
Copyright ©UWSPLtd2013
Four ‘Fs’
• Founders, Friends, Family and Fools;
• Relatively ‘cheap’ money (soft
loans, gifts, che...
Copyright ©UWSPLtd2013
Grants
• Grants usually provided by government, EU and public bodies;
• Range from £500>£5m+;
• Oft...
Copyright ©UWSPLtd2013
Debt
• The lending of money, often secured against an asset, with a fixed repayment
schedule;
• Usu...
Copyright ©UWSPLtd2013
Equity
• Stranger or External Equity is suitable to very few businesses
• Three main types of inves...
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Rural firms’ Finance for growth needs - Tim Powell, Senior Business Executive, University of Warwick’s Science Park.

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Rural firms’ Finance for growth needs - Tim Powell, Senior Business Executive, University of Warwick’s Science Park.

  1. 1. Copyright ©UWSPLtd2013 UWSP Access to Finance Tim Powell Tim.powell@uwsp.co.uk
  2. 2. Copyright ©UWSPLtd2013 Warwickshire Rural Growth Network Project • Pilot Project The Rural Economy Grant – Micro Enterprise Support is part of the Warwickshire Rural Growth Network (RGN). • Rural high growth/ high value micro- enterprises in the LEP priority sectors: manufacturing/ advanced engineering, digital media, and low carbon technologies. • Overview of Interactions with 100 businesses
  3. 3. Copyright ©UWSPLtd2013 100 Interactions - Business Type
  4. 4. Copyright ©UWSPLtd2013 Type of Funding Sourced
  5. 5. Copyright ©UWSPLtd2013 Sources of Funding Used
  6. 6. Copyright ©UWSPLtd2013 Sources of Finance Concept/ Seed /Micro Existing Start-ups/Existing Early Stage/Growing Later Stage/Mature £0k £50k £100k £500k £1m £2m £5m £10m £100m Publically Backed Venture Capital Private Venture Capital Novel Debt (CDFIs) Banks Business Angels, Alternative Crowd Funding Gov’t & Public backed Venture Capital/ LEP Initiatives/ERDF schemes & TSB & other grants CDFIs Bank Public Equity MarketsPrivate Venture Capital Banks 4F TSB/ other Grants. Alternative Crowd Funding Angels The SME Funding Escalator Sources of Capital HIGH RISK LOW RISK Idea Generation Product Development Commercialisation Expansion
  7. 7. Copyright ©UWSPLtd2013 Four ‘Fs’ • Founders, Friends, Family and Fools; • Relatively ‘cheap’ money (soft loans, gifts, cheap and unstructured equity sales); • Usually quite limited (how big is your credit card limit?); • Often uncritical – reinforces your own ideas without challenging them; • To raise it, you often just need an idea and an outline business plan. • Usually done without any agreement on what happens in the future and that can be a problem later
  8. 8. Copyright ©UWSPLtd2013 Grants • Grants usually provided by government, EU and public bodies; • Range from £500>£5m+; • Often require a contribution and or match funding; • Funding is often used to drive specific policy agenda (e.g. defence technologies, nuclear technologies, young entrepreneurs); • Clear limits on what you can spend money on; • Often require fairly detailed applications and a business plan; • Grant schemes tend to be very competitive (in UK 10%>20% success rate is typical); • Sources: Technology Strategy Board, local council, Local Enterprise Partnerships, Universities • There are many different grant schemes – and they change regularly
  9. 9. Copyright ©UWSPLtd2013 Debt • The lending of money, often secured against an asset, with a fixed repayment schedule; • Usually only available to firms with a strong track record and/or valuable assets (very rarely IP); • Often requires personal guarantees from directors (e.g. charges over their homes); • CDFIs ( CWRT), asset finance, factoring; Crowd Funding (THIN Cats ) • Can have inflexible payment schedules with fixed interest but no equity ownership dilution issues • Banks – have a number of different options and all debt can be quite quick to obtain • Local Councils –administer a lot of schemes for their area
  10. 10. Copyright ©UWSPLtd2013 Equity • Stranger or External Equity is suitable to very few businesses • Three main types of investor; Business Angels (private individuals- Networks and Crowd Funding) ; Venture Capital Funds (investment firms); and Corporate Venturers and some public backed funds. • All invest in high-risk businesses but usually BAs at the risky start-up stage, VCs once the tech/model is proven and CVs once the market is proven; • Investments of £25k>£10m+; • Very competitive market (fewer than 20% of firms who approach Minerva get in front of investors, fewer than 10% raise money); • Requires very detailed business plan and probably many meetings/presentations; • Equity investors want a capital exit and need to be convinced that a business can deliver them high multiple of their initial investment; • Sources: UKBAA/BVCA/

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