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

2. Let’s talk about growing your business From Concept to Cash 7 December 2011 “Straightforward excellence in all we do”

3. 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

4. Who we are  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 An entrepreneurial, award-winning firm

5. Selection of companies we have worked with Celtic RenewablesCloud Tomo 6

6. About me…  Director of Corporate Finance at Johnston Carmichael  Technology team focus  Scottish Investment Bank role  Hillington Park Innovation Centre

7. What funding is available R&DStart-up Early growth Accelerated growth Sustaining growth Maturity growth Public sector F&F Business Angels Venture Capital Trade buyer / IPO Bank loans Sales Grants Equity Debt Other loans Grants Equity Debt Business Angels Venture Capital “Crowd funding” SLF BGF R&D tax credits Bank loans ABL

8. 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

9. 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

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

11. What does an investor want hear – quickly! ain remise roof eople urpose

12. Thought process Investment proposition 5 Ps Executive summary Business plan

13. 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

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

15. 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

16. 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

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

18. 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”

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

20. Valuation

21. Further information Johnston Carmichael LLP 227 West George Street Glasgow G2 2ND Tel: 0141 222 5800 Fax: 0141 222 5801 www.jcca.co.uk Brendan Waters brendan.waters@jcca.co.uk 07801 852 068

22. Find out more about Hillington Park Innovation Centre Business Masterclasses: www.innovationcentre.org Digital media business development: www.interactivescotland.com Multimedia recording and production by Inner Ear: www.innerear.co.uk