Finance in Dorset 2017 - Established (>2 Years) Session

Finance in Dorset
Martin Aldridge, Partner
Businesses trading for > 2 years…….

pkf-francisclark.co.uk
Structure of morning
• Background, Equity, Debt and Business Support (8.30am to 10am)
• Dorset Chamber
• Banks: an overview
• Equity and Grants
• Growth Hub
• Coffee Break (10am to 10.25am)
• Funding, Business Support, Investment Ready and SME
perspective (10.25am to 12noon)
• Start Up (trading for < 2 years)
• or Established Business
• Lunch and Networking (12noon to 1pm)

• 10 minute presentations on:
• Crowd – unsecured debt
• P2P – secured debt
• Growth Capital (equity)
• Venture Capital / Private Equity
• LSE/ Public listing
• Investment ready
• SME Perspective
Funding and support – for business > 2 years old

Marketplace Lending – Unsecured Loans
Sarah Beard – Business Development Manager South West
3rd March 2017

• Online platform specifically designed to revolutionise traditional banking
methods. Our priority is to secure a better deal for everyone
• Access in as little as 1 week, to fast affordable business loans for working
capital, expansion, tax funding and much more …
• Marketplace lenders are not banks. Put simply, we directly connect
business borrowers looking for finance to grow their business, with
investors who want to lend
What is a Market-place lender?

A simple model: Lenders can spread risk by lending
small amounts to hundreds of businesses
Traditional lending
Investors have control over their investment
Marketplace lending
Loan
parts
Loan
parts
Loan
parts
Loan
parts
Loan parts
Loan parts

Funding Circle – Who are we?
“Were passionate about small businesses”
“Thousands of people, financial institutions and the British Business Bank have lent
over £1.8 billion to British businesses since 2010.
At rates that suit everyone.”
3 Founding Members – set up in 2010
Over $2.5 billion lent worldwide
600 Staff in the UK
300 Staff in CE/USA
Aim is to become the leading global market-place for investing and borrowing for SMEs

Funding Circle is the leading global lending platform for small
businesses
8
0
500
1,000
1,500
2,000
2,500
2010 2011 2012 2013 2014 2015 2016 E 2017 F
FundingCircleannualorigination($m)
Group Originations*
October 2013
Launch in the US
October 2015
Launch in Germany,
Spain & Netherlands
Originated over $2.5B to tens of thousands of small businesses since 2010

Filling The Cashflow Funding Gap
At Funding Circle, we are committed to helping you:
• Grow your business
• Boost working capital
• Cover one-off business costs
• Buy an asset
• Develop a property
• Hire extra staff

Unsecured Loan
£5k - £350k
Suitable for a wide range
of purposes
6 months to 5 year term
Fixed interest rates from
4.9%
No ERP’s
Secured Loan
£150k - £1m
 All asset security
agreement
 Charge on specific
properties or
assets
Products
£150k-£3m
 Development
 Commercial
 Investment
 Fixed interest
rates
 No early
repayment fees
Property Finance

Any Sector, Any Purpose…
Loan Purpose
Working capital
Expansion/growth
Capital
Asset purchase
Other
Residential property
development
Asset finance
Refinancing a loan
Tax payment
Tax liability
Sector
Automotive
Finance
Leisure & Hospitality
Education &
Training
I.T and
Telecommunications
Agriculture
Consumer Services
Healthcare
Manufacturing and
Engineering
Other

Funding Circle – Top Deals
• Garage repair centre. Borrowed £52,000 (7.5% rate) 60 months. Risk Band A+
Raising funds to purchase new equipment, plus marketing and recruitment spend
• Haulage company. Borrowed £30,000 (10.5% rate) 60 months. Risk Band B
To purchase new equipment and help with cashflow
• Hotel. Borrowed £205,000 (7.5% rate) 60 months. Risk Band A+
Working capital and wanted to carry out refurbishments
• Scaffolding business. Borrowed £298,000 (9% rate) 60 months. Risk Band A
To purchase assorted scaffolding equipment for new and ongoing contracts

Underwriting - Simple Credit Criteria
A minimum
of 2 years
trading history
At least 1 year
of filed or formally
prepared accounts
No outstanding CCJs
larger
than £250
What We Look For…
• Sole traders, partnerships, LLPS and Limited companies eligible
• Trading for 2 years with at least 1 years of filed accounts
• Clean personal credit – no CCJs, CVA, CVL or liquidated companies within past 6 years
• No consecutive losses
• Beneficial ownership in UK
• Non limited – must be a home owner
• Limited companies – will only lend up to £50k for non homeowner

14
• In 2013/14 the British Business Bank lent Funding Circle £60m, which has
been channeled into more than 10,000 businesses across the UK.
• To this day, 10% of every loan funded on the partial loan marketplace is
financed by the UK government
• In January 2017 Funding Circle proudly announced it had secured a further
£40m from the government to continue to support UK SMEs
The Government’s commitment to supporting SMEs
through Funding Circle

P2P Secured Debt
David Brown
Managing Director, Folk2Folk

AgendaWhat is P2P secured debt?

•Individuals lending
money

money
•Typically faster

money
•Typically faster
•Backed by collateral

A FAIR way of enabling
individuals to lend money to
others while mitigating the risk
of default by providing collateral.

We want to offer the
best protection
for Borrowers &
Lenders

Yes we can
• Need a quick decision
Get a yes or no within 24-48 hours
• Need funds within weeks rather than months
• Time poor
• Wearing many hats
• Turned down by their bank

Yes we can
Funds within 7-10 days
• Time poor
• Turned down by banks

Yes we can
• Time poor
Easy application

Yes we can
• Time poor
Easy application
Simple and straightforward

Yes we can
• Time poor
Easy application
Simple and straightforward
We don’t follow same judgement criteria

We’ll sort out the finance so you
can focus on your business.

If you believe
you can, we
believe you
can.

Simple process
1
Apply online, call us
or drop into a branch

Simple process
1 2
Decision within 24-48
hours

Simple process
1 2 3
Decision within 24-48
hours
Funds released in 7-
10 days

Amount:
• Min £25,000
• Max 60% LTV
Duration:
• Fixed or flexible loans
Security:
• Land or property (not your home)
Cost*:
• Interest only loans at 5.5% or 6.5%
• 2% set up fee, 1% annual service charge
Straightforward loans
* 3rd party fees and disbursements also apply

Your property against which the loan is secured could be at risk if you
do not meet payments.

Growth Capital Investors
EdwinDavies, Investor
Edwin.davies@bgf.co.uk 07880
384983
Introduction to BGF
Greg Norman, Investor

BGF is an investment
firm that provides
growth capital of £2m -
£10m to UK businesses
with turnover of £5m -
£100m.
Who we are.
Funding for growth and equity release
Initial investment of £2m – £10m for a
minority stake
Investing into existing businesses
typically £5-100m turnover
Long-term and patient capital, no forced
exit
Access to huge network and support
Fast and focused investment process
Providing capital to accelerate delivery of your plan, with our support but not interference…

BGF in numbers…
£2.5bn–total fund
£1.1bn–investedtodate
160 –total currentinvestments
102 –non-executives introduced
40% –maximum stake
9–investorsinthe South Westteam(officesin Bristoland Reading)
9–UKoffices
£5m –minimum turnover threshold
The most active investor in our space
Access to our Talent Network
Always a minority investor
Sector Agnostic

Equityproviders
Whodoes what and where
does BGFfitin?
friends
& family
listed
markets
private
equity
venture
capital &
crowd
funding
Growth capital: Long term equity funding that
allows a business to accelerate its expansion,
manage the risks of growth in a sustainable way,
keep control, and work in partnership with an
investor to build shareholder value.
Typical uses:
 hiring people
 investing in systems
 supporting an export drive
 buying new plant and machinery
 funding an acquisition
 new store roll-out
 strengthening the balance sheet
 cash to de-risk/realign existing shareholders

Day 1 investment of
£2m-£10m
Cash-in: to support long term growth
Cash-out: for existing shareholders
Equity stake of
up to 40%
Always a minority partner – you retain
control
What we can offer.
Workingalongsidethe
banks,BGFprovides
growthcapitalinawaythat
meets companies’needs.
No closed fund
pressures
Patient capital. No drag rights, no forced
exit
Ability to follow our
money
Significant capital and the ability to take
a longer term view. No need to ‘change
horses mid-race’

Fast and focused
investment process
Minimises disruption and fees
What we can offer.
Workingalongsidethe
banks,BGFprovides
growthcapitalinawaythat
meets companies’needs.
Flexible structures –
equity / loan notes
Meets the needs of the company and
shareholders
Fair legal approach Less onerous investor legal protections
More than money Access to impressive network
and support

May 2012
£4.0m
Online garden products
retailer
Reading
December 2012
£3.5m
Niche developer of mobile
phones for major brands
Reading
South West Portfolio.
December 2012
£7.0m
Design & manufacture of
high composite pipes for oil
& gas
Portsmouth
April 2013
£3.9m
Design, manufacture &
distribution of branded
travel products for kids
Bristol
April 2014
£4.0m
Cloud based IT services to
the public sector
Corsham
August 2014
£8.0m
Manufacturer & retailer of
luxury kitchens
Devizes
August 2014
£3.6m
Sustainable energy
business that designs &
installs systems
Tetbury
August 2014
£6.0m
Furniture retailer with 40
stores across the UK
Slough

April 2016
£9.0m
Production of high quality,
bespoke technical fabrics
Bridgwater
August 2016
£2.0m
Liquid waste removal and
drainage services
Cardiff
August 2016
£2.0m
Data analytics
Corsham
South West Portfolio.
October 2016
£3.0m
Retailer of solid wood
kitchen worktops
Gloucester
October 2014
£7.0m
IT managed services and
cloud hosting
Cirencester
March 2015
£4.0m
Communications
infrastructure and
outsourced IT services
Chippenham
July 2015
£10.0m
Multi-channel retailer of
clothing, footwear,
household and fishing
tackle products
Brecon
January 2016
£4.4m
Web-based email
marketing solution
Oxford

65
BGF South West and
South Wales Team
James Austin
Investor
07872 819093
Greg Norman
Investor
07557 747302
Edwin Davies
Investor
07880 384983
Paul Oldham
Regional Director
07887 657697
Dan Tapson
Investor
07964 904443
Ned Dorbin
Investor
07800 682195
Alex Garfitt
Investor
07770 582021
Alex Snodgrass
Investor
07766 781923
James Skade
Investor
07967 816583

Regional Investment for Growing Businesses
FI NANCE I N DO RS E T
March 2017
JONATHAN SIMM

Overview
Based in Southampton Only invest inSouthern England
Equity investment of
£1 - £4 million
Highly experienced private
equity team
Altitude is not a tax driven
fund
A regionally based private equity fund investing in established businesses
Small team enables fast
decision making

Investment Strategy
Regional generalist investor
Strong, ambitious management
teams who are receptive
Building a diversified portfolio of
businesses
Typically 3-5 year investments but
flexible
Targeting established companies
with a minimum £2m turnover,
£200k EBITDA and cash
generative
Do not invest in MBI’s or property
development
Development capital, MBO’s and
shareholder restructuring

Altitude as a Strategic Partner
‘Interested Investor” involvement in strategic
decisions but not operations unless requested
Developing and driving clearly defined
growth strategies
Supporting management to provide the
resources for growth
Board position on all investee companies
Keeping a clear board focus on creating
value
Improving corporate governance and
management information

Is Growth Funding Available?
Equity investment for smaller
businesses is available
Altitude seeks alignment of
interests with other shareholders
Alignment of goals is key – equity
risk v bank risk
Always prepared to discuss most
appropriate funding for
businesses
Equity investment does not mean
losing control of your business
Should be relationship driven and
adding value

Contacts
Jonathan Simm
Partner
jsimm@altitudepartners.co.uk
Simon White
Partner
swhite@altitudepartners.co.uk
Andrew Syvret
Business Development Partner
asyvret@altitudepartners.co.uk
Altitude Partners LLP
Kenneth Dibben House, Enterprise Road
Southampton Science Park, Southampton SO16 7NS
Tel: 023 8000 2030
www.altitudepartners.co.uk
Altitude is a member of the British Venture Capital Association and regulated by the Financial Conduct Authority

Supporting small and mid cap growth
March 2017
Claire Dorrian

Introduction
EU RegulatedNot public Exchange regulatedMarket
designation
Official List & EU Regulated
An attractive platform for growing businesses from any
sector or geographical location to raise capital
throughout their business lifecycle - providing access to
a broad investor base within a balanced regulatory
framework & the opportunity to improve their visibility
with investors & stakeholders.
Private Equity
Venture Capital
Seed Capital
Business
Angels
Friends
Family
Start - Up Early Stage Expansion Consolidation &
further capital raising
Diversification of investors, M&A
and International Expansion
Concept &
seed stage
Fundingrequirement
£500k
£1m
£50k
£150m
£1bn
Strategic consideration

74
Source: Bloomberg and Dealogic, January 2017
Further Issues on London Stock ExchangeIPOs on London Stock Exchange
Number of FIs Money raised via FIs ($m)
Main Market AIM Main Market AIM
2015 179 270 47,461 7,633
2016 163 318 27,688 5,243
% change -9% +18% -42% -31%
Number of IPOs Money raised at IPO ($m)
Main Market AIM Main Market AIM
2015 62 31 19,376 908
2016 27 38 6,095 1,496
% change -58% +23% -68% +65%
0
5
10
15
20
25
30
35
40
45
50
0
2
4
6
8
10
12
14
16
18
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
2010 2011 2012 2013 2014 2015 2016
VFTSEIndex
DealValue(USDbn)
0
5
10
15
20
25
30
35
40
45
50
0
2
4
6
8
10
12
14
16
18
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
2010 2011 2012 2013 2014 2015 2016
VFTSEIndex
DealValue(USDbn)
Challenging IPO Markets in 2016
But a positive year for AIM

-
2
4
6
8
10
12
14
16
18
MoneyRaised(£bn)
Further
New
Source: LSE statistics, 31st December 2016
*25 companies either suspended or undetermined value
AIM - £100 billion raised since launch
982 companies*,
aggregate value of
£80bn (173 Int’l
companies)
*ICB industry classification
Since 1995 over £100bn
raised in total (£58bn
through further issues)
Profile of AIM Companies Admissions to AIM – 1995 to 2016
Industries* Represented – by Number of CompaniesFundraisings on AIM – 1995 to 2016
71
106 104
199
147
138
113
52
20
7
£0 - 2 m £2 - 5m £5 - 10m £10 - 25m £25 - 50m £50 - 100m £100 -
250m
£250 -
500m
£500 - 1bn £1bn+
121
142
107
75
102
277
177
160 162
355
520
462
284
114
36
102 90
73
99
118
61 64
0
100
200
300
400
500
600
No.ofAdmissions
Int'l UK
Oil & Gas, 100
Basic Materials,
149
Industrials, 159
Consumer Goods,
61
Health Care, 90
Consumer
Services, 104
Telecommunicatio
ns, 13
Utilities, 13
Financials, 173
Technology, 120

76
Access to capital to grow the business
Broaden the shareholder base
Enhance profile & visibility - with
customers & suppliers
Currency to fund business acquisitions &
expand into new markets
Long term incentives for the employees
Benefits of Listing in London
Access to the deepest pool of international
capital in the world
Access to a stable and loyal investor base
Quality of advisory community and sell-
side research coverage
Respected and balanced regulatory
environment
Enhanced profile and status
76

77
460+
COMPANIES
25
COUNTRIES
170,000
EMPLOYEES
€ 39 bn
AGGREGATE
REVENUE
250+
IINVESTORS & ADVISORS
ELITE Company Transactions
45 21 6
PE deals Bond
issuances
AIM Listed
ELITE Companies
120
M&A / JV
deals
ELITE – Supporting Growth Companies
ELITE prepares companies for the next stage of by offering
enterprises improved access to sophisticated skill-sets,
networks and a diversified capital pool.
ELITE is dedicated to ambitious companies to share
best practices and enhance long-term growth
opportunities also through the understanding of
financial markets.

78
PHASE 1
A comprehensive training
programme for founders
and managers to stimulate
cultural change and
evaluate long term
financing opportunities
PHASE 2
Progressive adoption of
new management
practices in order to be
prepared to deal with
investors
PHASE 3
Capitalize on the benefits
associated with the new
model and access new
business, networking
opportunities and funding
options
2 YEARS No time limit
Continued access to the entire ELITE Community across Europe via the online platform
ELITE – A 3-Phased Programme

79
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Legal Disclaimer

Investment Ready
Andrew Killick

.
Funding options

.
Business Strategy Business Plan
• What are you trying to achieve?
• Thinking and evaluation time
• Document the assumptions
• Financials should follow the narrative

.
Management
• Roles and responsibilities
• Any changes or additional requirements?
• Track record
• Personal investment/commitment

The
Business
Case

.
The numbers
• Match funding to cash requirements and business
model
• Monthly profit and loss, cash flow and balance
sheet projections
• Review
• Cash headroom and sensitivities

.
Investment ready - housekeeping
 Licences / contracts / IPR
 Books and records in order and up to date?
 VAT, PAYE/NI, Corporation tax
 Statutory Accounts/management accounts
 Website

.
Requirements: Equity
• Equity funder requirements » growth
• Exit route and returns to the investor
• Investors expertise vs. loss of independence?
• Be prepared to discuss valuation

.
Requirements: Grants
• “Project” eligibility – sector, size, location…
• Timescale – prescriptive, process and panels
• Match funding
• ‘need for grant’ versus viable proposition
• On going requirements

.
Requirements: Debt
• Serviceability & Headroom
• Security / Personal Guarantees
• Conduits for government initiatives
• Covenants – achievable / appropriate?

.
Investment ready - Conclusions
 Suitable funding
 Robust Business case and appropriate
Management
 Detailed financial projections and
documented assumptions
 Know the ‘deal breakers’
 Allow sufficient time

Finance in the South West – wrap up
Martin Aldridge, Partner

.
Summary
• Dorset is a great place to do business and
has great businesses
• Dorset is full of entrepreneurial spirit
(businesses and funding options)
• Funding and business support here…
• http://www.francisclark.co.uk/news-views/blog
• Thank you

Presentations
And more… (24 presentations in total, covering “full range” of funding and business support options)

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Finance in Dorset 2017 - Established (>2 Years) Session

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