This document announces a networking breakfast event to discuss raising finance and exit strategies for companies. It will feature a speaker from EnvestorsMENA discussing challenges SMEs face in securing funding, what investors look for in proposals, and differences between angel investors and venture capital. The target audience appears to be business owners and founders seeking to better understand financing options and appealing to investors.

1. Welcome
Fit for Business
Networking Breakfast
Thursday 28thNovember
The Ivy, JumeirahEmirates Towers
Speaker: David Moleshead, Chairman
EnvestorsMENA
Topic: Raising Finance and Exit Strategies
for your Company

2. Current situation
SMEs account for more than 98% of the Dubai economy
Only 4% of UAE bank lending directed at SMEs
Trading
Manufacturing
Services
Employees
Turnover
Employees
Turnover
Employees
Turnover
Micro
<=9
<=AED9m
<=20
<= AED10m
<=20
<=AED3m
Small
<=35
<=AED50m
<=100
<= AED100m
<=100
<= AED25m
Medium
<=75
<=AED250m
<=250
<= 250m
<=250
<=AED150m

3. What stage of business are you?
Founder / Family
& Friends
Business Angels
Formal Venture
Capital
Seed
Start-up
Early
Growth
Time
Low Risk
High Risk
Capital
Needs
Flotation / IPO
Growth
Sustained
Growth

4. Long journey to secure an investor
Buy in to the product /service or sector
Buy in on basic shape of deal
Buy in on detailed legals
Investors can fall away at any time

5. What are the chances of raising finance?
2% succeed
3% failed
negotiations
10% rejected after
full day eval
25% rejected after 3
60% rejected after 30 hours
mins
The life expectancy of the average Business Plan
Mason & Harrison

6. Why do investors reject proposals?
XLittle appreciation of the risks
XLack of skills in management team
XNon credible financial projections
XNo track record or proof of concept
XInadequate financial returns
XToo complex
XNot scalable
XLack of trust
XNo clear exit route

7. Great plan but then we groan…
Laughable valuation
Serial dabblers
Top down sales approach or just ludicrous sales forecasts
Too dilutive from future funding rounds
Too complicated a deal structure
Being cute with the investors
Raising too much money / not raising enough money
No significant stage reached with planned funding
Top heavy management & board but nobody driving

8. What do investors look for?
Stage: Sales (or on the cusp of sales)
Valuation: Appropriate for risk, stage and future potential.
Management: Full time management team
Skin in the Game: Invested own money, vested interest to grow and staywith the business
Potential for Explosive growth.
Follow-on funding or new investment from the Company
Exit. Identifying trade sale targets

9. What do investors look for?
The Management
CEO key
A team rather than one individual
Relevant experience
Entrepreneurial attitude

10. What do investors look for?
The Business
High return (10x money)
Exit route
Scalability
Secure IP
Local

11. What do investors look for?
A professionally run business / due diligence:
Sound finances –credit control / regular billing
Cost control
Sound legal status (employment, health & safety)
Legal title to assets, especially IP
Sound contracts with suppliers and customers
Reliable and legal IT system
Proper corporate governance

12. Why invest?
How and why do
investors do it?

13. How long does it take?
3-12 months
-Investment readiness
-Marketing the opportunity
-Sourcing interested investors
-Meetings with interested parties
-Investigation Investor due diligence
-Valuation Agreement of terms
-Legals
-Agreement of final deal structure

14. Differences between angels and VC
Key Differences
Business Angels
Venture Capital
Personal Characteristics
Entrepreneurs
Financial Managers
Funding Characteristics
Own money
Invested funds’ money
Due Diligence
Experience based, lower cost
More formal, expensive
Geographical Proximity
Important
Not important
Legals
Simpler deal structures, with focus on fairness
Complex and demanding
Post investment monitoring
Active, hands-on
Strategic
Exit Route
Important
Very important
Based on EBAN Report Oct 2006

15. Exit options
Refinancing
Trade sale
Private equity / Venture capital
IPO

16. Exit considerations
Outright sale
Earn out
Whatever the choice, it is always important to plan early

17. Thank you
Thank you for your time.
Questions & Answers