1. Financing Start Up & Growth Aspirational Companies
Martin Carr
Financial Programmes Director
Exemplas Ltd
© Exemplas Ltd

2. My background Consultant with Exemplas
Develop financial solutions for SME s in the UK
Developed one of the early Angel Networks in the UK
Manage Co-Investment Fund
Developed and delivered Understanding Finance programme
Founder member British Business Angels Association in the UK
Work closely with Business Link

3. Sources of funding
Banks
Business Angels
Venture Capitalists
Publicly supported Investment Funds

4. Banks Fine margin Look for track record Dislike risks Seek security
Do not advance risk capital
Early stage finance difficult to obtain

5. Equity
£25k £50k £250k £1.5m £3m
own funds FFF Business GAP VC Stock
Angels Exchange

6. Equity What is Equity Finance
Permanent capital in the business – no obligation to pay dividends
Raising equity from outsiders involves selling (not giving away) part of the business
Potential sources of external Equity Finance
Family/friends (love money)
Employees
Business Angels
Venture Capitalists
Venture Capital Funds
Stock Exchange

7. Business Angels
Typically self made, high net worth individuals, who invest their own money directly in unquoted companies
Play hands on role in the company, bring skills and contacts
Informal end of venture capital market
Smart money cash + skills

8. Who are Business Angels?
Entrepreneur Angels
Financial
Job seeking

9. Understanding Business Angels’ Investment decision making
Initial screen
Is there merit in proposal to justify time/effort in making detailed investigation?
Angels reject 90% of opportunities they receive at initial screening stage
Important to improve this figure

10. What Investors look for in a proposition
Management, management, management
Experienced rounded team
Rather have a good team and poor proposition than poor team and good product
IPR
Unique and patented, that cannot be copied
Well thought out business, well researched
Recognition of strength/weakness : opportunities/threats
Good marketing plan
Business Plan

11. Business Plan Executive summary
Easy to understand
2 pages
Good Business Plan covering all aspects
Financials containing balance sheet projection 1-3 years
Balance Sheet projection 1-3 years
1 year cash flow
Profit & Loss forecast 1-3 years

12. Satisfaction of running successful business
Motivators of Angels
Cash returns
Satisfaction of running successful business
Altruistic – investing back into the economy
What do Investors expect?
High returns
Money back 3-5 years
> 30%pa returns
Exit 3-5 years

13. Business Angels investment criteria
Enthusiasm of entrepreneur
Trustworthiness of entrepreneur
Sales potential of the product
Expertise of the entrepreneur
Investor liked entrepreneur
Growth potential of the market
Quality of product
Perceived financial rewards
Niche market
Track record of entrepreneur

14. What do Companies expect?
Cash
Investors with skills
Share the company
Typically 40%
Smaller share of larger more profitable company
Aim to sell 3-5 years

15. Martin Carr
Exemplas Ltd