Venice SMEs Seeking Finance2


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When seeking finance for an IP based SME beauty is in the eye of the beholder. For European Patent Office

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Venice SMEs Seeking Finance2

  1. 1. Problems faced by SMEs when seeking finance <br />lessons to learn<br />Iain C Shirlaw, <br />Tranziger, <br />Director Equity Financing<br />Venice, November 2008<br />
  2. 2. Tangible and Intangible Book Value<br />
  3. 3. IV as % of Market Capitalisation, 2005<br />
  4. 4. IV as % of Market Capitalisation, 1975<br />
  5. 5. “Beauty is in the Eye of the beholder” Greece, 3rd Century BC<br />The Inventor of IP<br />The Financier<br />The Manager<br />
  6. 6. The Inventor<br />Typically a public sector employee<br />Expert (Knows a lot about a specialised niche)<br />Funding is usually a grant<br />Idea is worth billions<br />
  7. 7. The Financier<br />Typically an accountant<br />Non Expert (Knows a little about many things)<br />Funding is based on a specific target return<br />Idea is worth nothing unless it has EBITDA<br />
  8. 8. The Manager<br />Typically used to work for a large company<br />Has been a functional specialist<br />Funding is something to pay his salary<br />Idea will make millions for somebody!<br />
  9. 9. The Industry<br />Has shareholders to satisfy<br />Has a traditional perspective<br />Investors don’t want risk<br />Need Proof the idea is worth anything!<br />And have a lot of cash!!!!<br />
  10. 10. The Business Model<br />Invest 20x$25m in R&D to get 20 candidates ($25m each)<br />Invest $20m in pre-clinicals – Lose $10m<br />Invest $25m in Phase 1 – Lose $12.5m<br />Invest $25m in Phase 11 – Lose $16m<br />Invest $50m in Phase 111/1V – Lose $25m<br />Invest $50m in FDA and market Approval – Lose $25m<br />Win!!!! Generate $120m per year for 10 years<br />
  11. 11. Bridging The 7 Stages of SME Growth <br />
  12. 12. The Lesson to be learned<br />Aim for value at each stage<br />Learn and Build your capability<br />Know your buyer - Pharma?<br />Be ready for change!<br />Get your timing right!!<br />Iain C Shirlaw,<br />Venice <br />November 2008 <br />
  13. 13. Seven Ages of Man<br />Senility<br />Old Age<br />Adult<br />Young <br />Adult<br />Adolescent<br />Child<br />Infant<br />
  14. 14. As You Like it Act 2, Sc 7 Shakespeare<br />&quot;All the world&apos;s a stage, and all the men and women merely players;They have their exits and their entrances;and one man in his time plays many parts,His acts being seven ages. <br />At first the infant, mewling and puking in the nurse&apos;s arms;And then the whining school-boy, with his satchel And shining morning face, creeping like snail unwillingly to school. <br />And then the lover, Sighing like furnace, with a woeful balladMade to his mistress&apos; eyebrow. <br />Then a soldier, full of strange oaths, and bearded like the pard, jealous in honour, sudden and quick in quarrel, seeking the bubble reputation even in the cannon&apos;s mouth. <br />And then the justice, in fair round belly with good capon lin&apos;d, with eyes severe and beard of formal cut, full of wise saws and modern instances; and so he plays his part. <br />The sixth age shifts into the lean and slipper&apos;d pantaloon, with spectacles on nose and pouch on side; His youthful hose, well sav&apos;d, a world too wide for his shrunk shank; and his big manly voice, turning again toward childish treble, pipes and whistles in his sound. <br />Last scene of all, that ends this strange eventful history, is second childishness and mere oblivion;Sans teeth, sans eyes, sans taste, sans everything.&quot; )<br />
  15. 15. Iain Shirlaw<br />Contact details:<br />tranžiger<br />international corporate and transaction advisor<br />life sciences and healthcare<br /><br />