1. How to raise equity investment for your tech venture
How to raise equity for your tech venture?
Dr Richard Thompson
Senior Investment Executive
Technology Venture Investments
Development Bank of Wales
5 December 2017

2. A personal perspective
Some insights from my personal experiences rather.
Not a Development Bank guide
developmentbank.wales

3. My background
10 years technology investments at the Development Bank (Previously Finance Wales)
co-investment, corporate investments, exit, IPO
Success and failure
Wales Spinout Programme
BRE Ltd. – commercial research and consultancy
Commercial R&D Australia and The Netherlands
Microelectronics manufacturing
Degree and PhD in Materials Science & Engineering
Moved from being a researcher to funding research to VC investment
TVI
50% of investments in Life Science and Healthcare
BRE – helping companies to commercialise technology
AB Electronics – scales up of new products
CONCLUSION – the funding and commercialisation of new technology is difficult BUT exciting.
Healthcare - impact for patients as well as financial returns. We all have friends and relatives where innovation in healthcare has made a huge difference.
developmentbank.wales

4. Starting point Debt Equity Debt Focus on repayment
Security – what happens if you cant pay the funds back
Lower risk
Development Bank has a range of products
Equity
Focus on the opportunity
Can the team exploit the opportunity & and raise the funding required to achieve this
Higher risk
Tech Ventures – Highest risk but greatest opportunity
developmentbank.wales

5. Equity - Long term technology investor
Seed
Early stage
Growth
Exit/IPO
We are a Broad Investor –
loans through to equity.
Large and small.
Learn from colleagues, clients and co-inestors
Technology funds – Seed through to investing at IPO.
Patient investor
We follow out money (based upon success)
developmentbank.wales

6. Healthcare companies we’ve supported
Helen – any new companies we should add?
I will talk about – Creo, MidaTech/Q-Chip, Calon, Momentum and PulmonIR
developmentbank.wales

7. Equity process – similarities to buying a house!
Valuation – what some one is prepared to pay
Complex legal transition
Multiple parties
Validation of all claims - condition, ownership etc
Diligence – buyer beware
Disclosure
Completion event
Shared ownership
developmentbank.wales

8. Fund raising strategy
You are starting out on a journey (long or short?)
How are you going to get there?
How much is it going to cost?
Have you got the right people for each stage?
Are your investors joining you for the full journey?
Don’t run out of fuel (funds) along the way
Raise funds when the future looks exciting
Create a simple fund raising diagram
developmentbank.wales

9. Things to think about
How is an equity investor going to make a return?
Is my team capable of delivering this
Is the reward great enough to justify the risk
Is there a compelling need for my products/technology
Put yourself in the investors shoes
Would you invest in you’re company/opportunity?
What would you need to see fixed or improved?
developmentbank.wales

10. Your team Does your team have the right experience?
Fund raising experience
Board level
Balance
Commercial
Technical
Financial
Other
developmentbank.wales

11. A few tips Everything takes longer and costs more
Raise more than you think you need
Build-in some contingency (funding rounds take time)
Align interests (the term sheet is key)
Build a supportive syndicate
Are investors competitors or co-investors?
Have a Plan B (and a Plan C)
Focus negotiations on the key commercial points
developmentbank.wales

12. Key mistakes Don’t refer to giving away equity!
Likely to annoy angel investors and VCs, you are competing for their investment
you don’t give away your house – you sell it
Realistic valuation (similar to selling your house)
Raise enough money
Strengthen you investor base when you can
developmentbank.wales

13. Thank you
developmentbank.wales