Finance for Innovative SMEs

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Finance for Innovative SMEs

  1. 1. This project is funded by the European UnionIntegrated Innovation Support Programme Finance for Innovative SMEs Robert Sheffrin – Finance Expert IISP 2nd November 2012
  2. 2. This project is funded bythe European Union“When the wind blows, some people buildwalls; others build windmills” Chinese proverb Integrated Innovation Support Programme (IISP) 2
  3. 3. This project is funded bythe European Union Topics• Venture capital - introduction• Sources of funding for innovative SMEs• Examples of venture capital and angel backed companies• Investment readiness Integrated Innovation Support Programme (IISP) 3
  4. 4. This project is funded bythe European Union Private Equity & Venture Capital• Private Equity is the provision of long term, equity (share) capital to non-quoted companies with high growth potential• Private Equity is for PRIVATE companies• Venture Capital is a type of Private Equity focussed on start-up, early stage companies and emerging growth companies Integrated Innovation Support Programme (IISP) 4
  5. 5. This project is funded bythe European Union Business Angel “ ..an individual, acting alone or in a formal or informal syndicate, who invests their own money directly in an unquoted business where there is no family connection.” Professors C Mason & J Harrison Integrated Innovation Support Programme (IISP) 5
  6. 6. This project is funded bythe European Union Bank vs Venture Capital Bank Debt Venture Capital • Secured (collateral) • Risk funding (equity capital) • Capital & interest • Return only on success repayments • Committed • Risk of withdrawal • Partner relationship • Monitoring relationship - support • REPAYMENT – regardless of profitability • GROWTH – no repayment until sufficient profit and value Integrated Innovation Support Programme (IISP) 6
  7. 7. This project is funded bythe European UnionWhat are the funding options for innovative SMEs?Stage of development: Seed? Start-up? Early growth? Sustained growth? Integrated Innovation Support Programme (IISP) 7
  8. 8. This project is funded bythe European Union Risk Finance Ladder Integrated Innovation Support Programme (IISP) 8
  9. 9. This project is funded bythe European Union Example – Biotech start-up Activity – crop nutrition & protection products 2003 – start up funding. Owner + business angel 2004 - £50k seedcorn finance (venture capital fund) 2005 – 6 patents 2005/06 - £1m. 3 VC funds & 6 business angels 2006 - £3.85m AIM (London junior stock market)www.plantimpact.com Integrated Innovation Support Programme (IISP) 9
  10. 10. This project is funded bythe European Union Example – Service Sector start-up Activity – dental recruitment Former dental nurse Rejected by banks & local Micro-Finance Fund Received £35k investment from one angel Failed Learned from failure - started again New angel investor Integrated Innovation Support Programme (IISP) 10
  11. 11. This project is funded bythe European Union What an investor looks for High growth prospects An ambitious management team that can achieve the growth Product / service that has a good market and the ability to reach that market Competitive edge / unique selling point Willingness to share ownership Exit route Integrated Innovation Support Programme (IISP) 11
  12. 12. This project is funded bythe European Union Checklist - is venture capital for you?Need funding for growth Good growth prospects Viable product or service Management ability Willing to sell shares Willing to work with others Exit route for investor  Integrated Innovation Support Programme (IISP) 12
  13. 13. This project is funded bythe European Union Where’s the money?Some now - more in the future…2012:Serbian Business Angels Network www.sban.eu – next meeting 15th - 16th NovemberBalkan Venture Forum www.balkanventureforum.org – 22nd - 23rd November11 Accelerator Venture Fund – www.eleven.bg2013/14Western Balkan Enterprise Development and InnovationFacility (WB EDIF) – Innovation, Expansion & Loan FundsOther VC Funds - >$200m being raised for region Integrated Innovation Support Programme (IISP) 13
  14. 14. This project is funded bythe European Union Investment Readiness Knowing your potential funding market Having your “tool kit” ready for investors. Knowing your investors Knowing when to approach the market Understanding the investment process Integrated Innovation Support Programme (IISP) 14
  15. 15. This project is funded bythe European Union IISP Investment Readiness Training• Training for 100 SMEs• Coaching for 20 SMEs• Application and assessment from January 2013• Starts February 2013For pre-registration, go to www.iisp.rs and click on“investment readiness” or email sme.finance@iisp.rs Integrated Innovation Support Programme (IISP) 15
  16. 16. This project is funded bythe European Union IISP Contact info. Tel: 011 362 0923 Email: sme.finance@iisp.rs Web: www.iisp.rs Robert Sheffrin - Finance Expert Aleksandar Vesic – Innovation Funding Expert Integrated Innovation Support Programme (IISP) 16

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