4iP Investment Workshop Adam - Ingenious


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4iP Investment Workshop Adam - Ingenious

  1. 1. abcrs VC’ Guide” Workshop “Becoming Investor Ready: A VC’s Guide” Adam Buchan 10 June 2010 abc ASSET MANAGEMENT, CONSULTING, CORPORATE FINANCE, INVESTMENTS, VENTURES
  2. 2. Ingenious Media The UK’s leading media investment and advisory company abcrs Offers discretionary portfolio Provides strategic and Advises media and management for private operational consulting services entertainment companies on individuals, trusts, pensions, to companies in the media corporate sales, fund-raisings charities and corporates and entertainment sector and all aspects of M&A Investment products in the Provider of venture capital to film, television, music, the media sector games, live events and entertainment content for private and institutional investors 2
  3. 3. IMAC Investment Funds abcrs • First fund: Ingenious Ventures LLP: £25m fund. 5 investments including 19 (“Pop Idol”), Lionhead Studios (“Fable”). • Second fund: Ingenious Media Active Capital (IMAC) listed on AIM in April 2006, raising £150 million. • IMAC invests in “progressive media” - companies taking advantage of changes in consumer behaviour, technology and regulation. • Sectors include - television, mobile, internet/new media, music, interactive entertainment, video games, film, print, marketing services, publishing and broadcasting. • IMAC takes significant minority or controlling equity investments predominantly in unquoted media companies. • VCT funds across Music, Live & Entertainment sectors 3
  4. 4. Sources of Funding Stage of Funding Description Sources of Funding abcrs Angels Local govt grants, Seed Small amounts, prove business idea incentive schemes Pre-Profit Working capital for businesses selling RDAs, central product but not yet profitable govt funds Venture Growth/Development Expansion capital (additional offices, new Capital service offerings) Banks Private MBO/MBI Management team finding new backers to Equity buyout existing shareholders Leveraged Buyout Large acquisitions heavily funded by bank debt 4
  5. 5. Sources of Funding abcrs Different sources of funding look for very different things: Banks • Less focus on overall value of business • Visibility of cashflows • More focus on downside scenarios, secure loan against fixed assets etc • Less control clauses Venture Capital / Private Equity • Equity position so focused on overall value of the business & exit • Likely to take more active role in runnign the business (seat(s) on Board etc) & more significant control clauses Central Government Funds (ECFs etc) • Increasingly modelled on venture capital processes 5
  6. 6. Venture Capital – Investment Criteria abcrs Market Mgmt Team • Size • Track record • Growth • Diversification • Maturity • Chemistry • Barriers to Entry Competition Company • Product differentiators • IP (owned, defensible, monetisable) • Financials (historic & projections) • Funding Requirement • Valuation – Comparable transactions • Future exit 6
  7. 7. Examples REVIEW CENTRE • User-generated consumer review website • IMAC invested June 2008 abcrs What attracted us: Opportunity: • IP – database of consumer reviews • Update user interface • Large, established user base – Increase user base • Highly geared – Increase a.r.p.u. • Diversify revenue – Other verticals – Price comparison OUTSIDE LINE • Digital marketing services agency • IMAC invested March 2007 What attracted us: Opportunity: • Market • Diversify revenue: • Mgmt team – Type of clients – Service offering • Build senior mgmt team 7
  8. 8. abcrs VC’ Guide” Workshop “Becoming Investor Ready: A VC’s Guide” Adam Buchan 10 June 2010 abc ASSET MANAGEMENT, CONSULTING, CORPORATE FINANCE, INVESTMENTS, VENTURES