Lancashire Business Growth Forum Steve Wall Manager North west - - PowerPoint PPT Presentation

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Lancashire Business Growth Forum

Steve Wall

Manager North west Business Angels – Access to Finance

UK Business Angel Investing

• Ensure Viable NW SMEs Are Investment Ready
• Support The Process Of Obtaining Appropriate Funding
• Impartial / Independent
• Experience / Knowledge
• Complementary
• Fully Funded – ‘Free To Access’

‘Matching Businesses With Finance’

CAPITAL NEEDS TIME

Seed Start-up Early Growth Sustained Growth High Risk Low Risk

3 F’s Business Angels & Co-investment Funds Formal Venture Capital / Corporate Venturing

Trade Sale IPO (AIM)

Proof of Concept, R&D Grants & Loans

The Innovation Funding Ecosystem

Equity Crowdfunding Accelerators Incubators

Who Are Business Angels?

• High net worth individuals
• Sophisticated Investors
• Company directors looking to diversify their businesses
• Investment syndicates ( Groups of individuals )
• Increasingly anyone with an interest via Crowdfunding Platforms !

UK Angel Investing Market

UK Business Angels Invest £800m- £1bn p.a. (UK EIS stats) Approx 18,000 Angels ( Iceberg Effect ) VC Investment : £340m pa (BVCA 2015) Angel Investment = 3 x Early Stage VC Investing

UK Angel Investing Market

Business Angels – Observations

• Angels Invest Own Money
• Equity / Business Experience / Contacts
• Average Angel Deal - £50k - £250k First Round
• Angels Invest In Syndicates , Pooling Finance / Skills, Usually Around A Lead

Angel

• Entrepreneurial Angel Groups - “Super Angels” Establishing Funds /

Accelerators - Often Replacing Seed VCs

• Angels prepared to do follow-on funding rounds
• Angels Co-Invest With VCs / Banks / Crowdfunders , also R&D grants

What Are Angels Looking For ?

• Entrepreneur Or Team –
• Skills / Drive To Build Growth Business
• Passion / Commitment !
• Business Addresses – Global / Social / Market Challenges
• Generally Post Proof of Concept
• Scalable Business Model - 10x x return
• Can Be Pre-Profit – Clear Strategy To Achieve High Turnover / Growth

Attracting Angel Investment

• Customer validation – Demonstrable Customer Commitment / Orders /

Will Pay The Price For Product / Service

• Defensible Competitive Position - IP Protection ( Patents ) Or First

Mover Advantage

• Differentiate From Your Competitors
• Prepared To Have Investors On The Board / Take Strategic Advice
• Evaluate Potential Tax Advantages – SEIS / EIS
• Clearly Identify How Will Exit – Angels Need Liquidity !

Seed Enterprise Investment Scheme - SEIS

• Investors Receive Up To 50% Tax Relief
• Also Exemptions From Capital Gains Tax
• Investor Can Invest £100k Each Year
• Maximum Business Investment Total £150,000
• Early Stage Business - <25 Employees / Assets <£200,000
• Trading < 2 Years - Can Be Pre-Trading Or Business Incorporated For

Longer.

• Business Must Gain Advance Clearance - HMRC

Enterprise Investment Scheme

• Investors - Up To 30% Tax Relief + Capital Gains Tax- Deferral
• Investors Can Invest £1m Each Year - Company Can Receive £5m EIS

Investment PA

• SME - 250 or fewer staff
• Restrictions On Certain Sectors
• Investor Cannot Be Connected To The Business
• Investment Must Be Held For 3 Years
• Essential - Gain Advanced Clearance From HMRC

• Process - Typically 1 - 3 Months
• You Need To Kiss A Lot Of Frogs!

Finding Angels

North West Business Angels

What do we do ? We match entrepreneurs seeking investment with investors looking for new opportunities .

How do we do it

1.We see up to 40 businesses per month. 2.We review the business for suitability for angel funding 3.We support with investment readiness

How do we investment ready the Business

• We help client to produce a fit for purpose business plan
• Support client with the production of a business plan summary
• Help prepare a suitable presentation and coach the client with its delivery

Presentation to Business Angels

1.We arrange a meeting of the Angel investors . 2.Clients will then present their opportunity at an event . 3.Clients also have a showcase at the event and enable direct communication with interested angels .

Message to the Angel network

• Not every one can attend our events
• We therefor circulate the business plan summaries to our angel population

Businesses grow and may need more funding

• We follow up to see if your business is fully prepared for future development .
• If additional funding requirements are forecast , we can introduce you to follow on funders who

can help you .

Steve Wall

North West Business Angels www.nwbusinessangels.co.uk 07824472105