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Pitching  For  Investment  Masterclass December  6th  2011 Part  3:  From  Concept  to  Cash Brendan  Waters  (Johnston  Carmichael)


Let’s talk about growing your business

From Concept to Cash 7 December 2011

“Straightforward excellence in all we do”


Agenda  Who we are  About me...  What funding is available  Setting the scene  What do investors look for in a Company?  Don’t  The downside of raising equity


Who we are An  entrepreneurial,  award-­‐winning  firm 

Largest independent Chartered Accountancy firm in Scotland

One of Top 25* CA firms in UK

10 offices located throughout Scotland

Over 10,000 clients

48 partners and over 400 employees

£27.9m turnover FY11 (4% growth).

Part of the Leading Edge Alliance, an international network of independently-owned accounting and consulting firms in over 100 countries

Winner of Best Medium Firm in 2008, 2009, 2010 and 2011 Scottish Accountancy Awards

* Accountancy Age UK Top 50 League 2010


Selection of companies we have worked with

Celtic Renewables

Cloud Tomo 6


About me…  Director of Corporate Finance at Johnston Carmichael

 Technology team focus

 Scottish Investment Bank role

 Hillington Park Innovation Centre


What funding is available R&D

Start-up

Early growth

Accelerated growth

Sustaining growth

Maturity growth

Sales R&D tax credits Public sector

Grants Grants F&F

Equity Equity

Business Angels Business Angels

Venture Capital Venture Capital

“Crowd funding� Other loans

Debt Debt

BGF

SLF ABL Bank loans

Bank loans

Trade buyer / IPO


Setting the scene  GOOD NEWS  SIB completed 125 investments, putting £23m into 109 companies  This was on the back of £53.7m from the private sector  NOT-SO GOOD NEWS  many investments were follow on rounds  Bank funding not an option  Not as many exits for Angels / VCs  Irrelevant?  Great opportunities will get funded


Down to business  Many investors receive HUNDREDS of plans a year  How do you stand out from the crowd  A good pitch will clearly articulate the proposition  A great pitch will also know what the investor wants/ needs


What do investors look for in a Company? We look for teams that are committed to solving a real problem with a novel approach in a large or growing market


What does an investor want hear – quickly!

ain remise roof eople urpose


Thought process 5 Ps

Investment proposition Executive summary

Business plan


The pain  Is it a real NEED TO HAVE  Or just a NICE TO HAVE  Is this a NEED that CUSTOMER are prepared to PAY for  However Did you NEED an iPad Did you NEED Facebook


The premise  NOT a detailed technical description / schema  NOT innovation for innovation’s sake  How are you going to sell it  IP?


The proof  If you have SOLD it, ideal  If you have sold it to lots of different customers, even better  If you have sold it repeatedly to lots of different customer, best case  If not..  Prove the market size – specifically!  Prove that people will buy it


The people  Experience Of the product or service Of the market Of management Of growing a successful business Of achieving a successful exit Of failing?  Admit gaps


The purpose  How much  What for - milestones  Future funding  Exit


Don’t  Leave it until the last minute  Over-egg the financials  Under-egg the financials!  “I have no competition”  “Our market is worth $570 trillion and we will capture 10%”  “I want £1 million for 1% of my business”  Overstate the technology – don’t lose sight of the customer  “Revolutionary technologies looking for a problem” vs “Real problems being solved with evolutionary technology”


The downside of raising equity  Dilution  Control  Commercial restrictions  Exit focus (Double edged sword)  Personal restrictions  Onerous terms


Valuation


Further information

Brendan Waters brendan.waters@jcca.co.uk LLP 07801 852 068

Johnston Carmichael 227 West George Street Glasgow G2 2ND Tel: 0141 222 5800 Fax: 0141 222 5801 www.jcca.co.uk


Find  out  more  about  Hillington  Park   InnovaGon  Centre  Business  Masterclasses: www.innovaGoncentre.org

Digital  media  business  development: www.interacGvescotland.com Mul$media  recording  and  produc$on  by  Inner  Ear:  www.innerear.co.uk


Pitching For Investment Masterclass Part 3: From Concept to Cash