gmv creative innovation funding presentation
TRANSCRIPT
Funding for Innovation in the Creative Industries
16 February 2015
Welcome
Matt Ward, Senior Partnership Manager
Digital Catapult
Overview
Patrick Towell, Chief Executive
Golant Media Ventures
Who we are
• An innovation agency - not just consultants, we advise and bring whatever extra resources are needed alongside organisations to make things happen
• For creative businesses and cultural organisations and the parts of the public, education and not-for-profit sector that work with them
Who we work for, with, funded by
http://www.golantmediaventures.com/projects
Agenda
09:00 Registration/coffee
09:30 Welcome
09:35 Overview public/private/hybrid models in context of public and private financing
09:45 Intellectual Property as a driver of high growth
10:00 European funding opportunities
10:15 GrowthAccelerator and the Business Support Service
10:30 Innovation funding for Creative, Digital and Design Companies
10:45 Case Studies: Cinegi and Miracle Theatre/Live & Digital
11:05 Private finance: structures to support, hybrid with public
11:15 Understanding the private investment in innovation market
11:30 Coffee & networking
12:00 End
Funding landscape
• UK & EU
• Public & private
• R&D, enterprise support, equity investment, debt finance…
What innovation funding needs
• Compelling market opportunity
– Market dynamics, focus, segmentation
– Sizing, growth justification
– Competitor analysis and positioning
• Clear portfolio of products, services, experiences…
• Identifiable and defensible IP (and other intangibles)
• Business models
– Revenue models, pricing, profitability
– Delivery models, partnering, costs
– Channel/distribution strategy
Rosa Wilkinson, Director of Innovation
Intellectual Property Office
European Funding Opportunities
Patrick Towell, Chief Executive
Golant Media Ventures
Creative Europe
2014-2020 programme has a budget of €1.46 billion.
Media
At least 56% of this budget will be allocated to the MEDIA sub-programme, supporting training, project development, and the distribution and promotion of European audiovisual works
Culture
Around 31% of the budget will go towards the Culture sub-programme for performing and visual arts, with a further13% allocated to a new cross-sectoral strand.
Creative Europe Desk UK
http://www.mediadeskuk.eu/about-us/about-us/
Upcoming calls
Media• TV Programming 28/05/15• Video games 26/03/15• Audience development 26/03/15• Co-production 12/03/15• Distribution automatic scheme 30/04/15• Distribution selective scheme 02/07/15
Culture• Platforms 25/02/15• European networks 05/10/15
EU Horizon 2020
• Horizon 2020 - 10 year economic strategy for growth
• Part of Innovation Union - creating an innovation friendly environment
• Relevant strands
– Industrial leadership - 6 areas including ICT
– Better society - societal challenges
• Each funding call may fund
– Research innovation actions - R&D creating new knowledge or testing feasibility
– Innovation actions - new or improved products, processes or services, including testing pilots etc.
EU Horizon 2020: SME Instrument
• For single or groups of highly innovative SMEs with international ambitions
• Phase I (proof-of-concept): Scientific/technical feasibility & commercial potential
– Activities: risk assessment, market study, user involvement, partner search, IP management
– Output: feasibility report, with more detailed business plan
– Around 6 months
– €50,000
• Phase II (development & demonstration): Make business idea market-ready
– Activities: demonstration, testing, prototyping, piloting, scaling-up, design, market replication
– 12-24 months
– €500,000-2.5m
• http://ec.europa.eu/research/participants/docs/h2020-funding-guide/cross-cutting-issues/sme_en.htm
EU Horizon 2020: SME Instrument
• SME Business Model Innovation - calls close March, June, September, Dec 2015
• Cultural heritage, creative industries, tourism
• http://ec.europa.eu/research/participants/portal/desktop/en/opportunities/h2020/topics/2569-inso-10-2015.html
EU Horizon 2020: Reflective 6 (2015)
• Innovation ecosystems of digital cultural assets
• Actions should support and promote access to and reuse of cultural heritage resources as part of research and innovation.
• Projects should enable new models and demonstrations of the analysis, interpretation and understanding of Europe's cultural and intellectual history and bring cultural content to new audiences in novel ways, through the development of new environments, applications, tools, and services for digital cultural resources in scientific collections, archives, museums, libraries and cultural heritage sites.
• https://connect.innovateuk.org/documents/3220887/3676376/CI%20Horizon%202020%20Briefing%20Pack
EU Horizon 2020: Reflective 6 (2015)
• Reflective societies: cultural heritage and European identities
• Innovation actions are eligible under this call. These require participation by at least three independent legal entities, each established in a different member state or associated country. All H2020 funding calls allow the participation in consortia of third country partners who secure their own funding.
• The indicative budget for this call in 2015 is €10 million.
• Each successful proposal is expected to receive between €2m and €4m, although proposals for other amounts will also be considered.
• Closing Date: 28 May 2015
• http://ec.europa.eu/research/participants/portal/desktop/en/opportunities/h2020/topics/2104-reflective-6-2015.html
EU Horizon 2020 ICT 19 (2015)
• Transforming creative and media businesses through new forms of content and user engagement
• New ways of content creation, access, retrieval and interaction
• Closing Date: 14 April 2015
• http://ec.europa.eu/research/participants/portal/desktop/en/opportunities/h2020/topics/2104-reflective-6-2015.html
Sue Fraser, Business Growth Manager
Business Growth Service
Sue Fraser
Business Growth
Manager
GrowthAccelerator
England–wide
Coaching
Workshops and Masterclasses
Growth Community
Leadership & Management training
What is the Business Growth Service?
Business Growth Service
Business Eligibility & Suitability
SMEs
< 250
employees
< £40m turnover
Any sector
Any age
Registered in
UK
Based in
England
Eligibility
What SMEs say
We've got loads
of ideas about
how to grow but
don't seem to
find the time to
do anything
about them.
What keeps
me awake at
night is cash
flow.I can't grow the
organisation without
hiring more people,
but I can't afford to
hire anyone until we
make more money.
Who do you trust?
Support with big decisions
Former GrowthAccelerator participants in arts sector
Measures of Success
How will the Business Growth Service be measured?
• Gross Value Added (GVA)
• Jobs Created
• Participant Satisfaction
• Stakeholder Recommendation
Business Development
• coaching to overcome barriers to growth
• six ½ day workshops
Access to Finance
• Coaching to get you investor-ready
• 3 full day finance specific masterclasses
• Introductions to appropriate funders
Funding Insights on GrowthAccelerator companies
65%Equity
32%Debt
3%Grants
£766kAverage equity cheque
£374kAverage debt cheque
£262k
Average grant cheque
All service streams
• Invitation to join our Growth Community
• Access to matched funding for Leadership and
Management Training
Participant Feedback so far
98% report that they are
on track to achieve the key
milestones set out in their
action plan
97% believe that
GrowthAccelerator has been
'important' in increasing their ability
to achieve these milestones
91.2%
94.2%
90.2%
95.3%
Understanding of your business
Business experience
Technical Skills
Credibility
Participant Satisfaction with Coach Qualities
What is your contribution?
Package of Support valued at £3,500 + VAT
Includes coaching, Workshops or Masterclasses, Growth Community and
access to Leadership & Management training
To access the service, you pay:
£600 + £700 VAT 1-4 employees
government's contribution: £2,900
£1500 + £700 VAT 5-49 employees
government's contribution: £2,000
£3000 + £700 VAT 50-249 employees
government's contribution: £500
Two routes to GrowthAccelerator
We want leadership and
management training for
senior managers.
We want coaching
and workshops
Growth Impact Pilot
Matched-funding of up to £2,000 per senior
manager for L&M training
Available exclusively to businesses with a
turnover between £250,000 to £2m.
NO JOINING FEE!
Thank you
Sue Fraser, Business Growth Manager
Business Growth Service
Mobile: 07557 848 525
Creative Business
Development BriefingFebruary 2015
What is this briefing?
• A digest of useful information for UK creative industries
businesses seeking funding,financing and business
development support, updated every month
• Brought to you by the following organisations:
Contents
• Public funding calls
• Other public funding
• Private financing
• Other financing mechanisms
• Support resources
• February events
• Other information
• Create UK
Public funding calls
Building whole-life performance
Key feature: Investment for collaborative R&D projects that can lead to
improve the whole-life performance of buildings. Proposals should involve
research into new knowledge for developing products, processes or services
intended for deployment during any stage of a building’s lifecycle.
Scale:
• Up to £4m
Programme: collaborative R&D between business and academia
Closes: This is a two-stage competition that opens for applicants on 23
February 2015. The deadline for registration is at noon on 1 April 2015 and
the deadline for expressions of interest is at noon on 8 April 2015.
Details of how to register for UK brokerage events available here.
Further competition info at innovateuk.org
Public funding calls
Childcare provision for parents
Key feature: DfE is seeking the development of a new, engaging and
innovative solution which provides accurate information about childcare
provision for parents. DfE, supported by Innovate UK is using Phase 2 of the
SBRI process to support the prototype development of selected proposed
solutions.
Scale:
• Up to £200K
Programme: Small Business Research Initiative (SBRI) – relevant for SMEs
Timeline: competition opens 2nd Feb 2015; registration closes 25th March
2015; competition closes March 2015.
More info at innovateuk.org including details of how to register for a briefing
Event, March 13th
Public funding calls
Circular economy: business models
Key feature: Investment in feasibility studies into the business case for
retaining value in durable goods through reuse, remanufacture or
leasing/maintenance.
Scale:
• Up to £800K
Programme: Feasibility Studies – must be collaborative and business-led,
open to companies of any size
Closes: registration closes Wednesday 11th March 2015; deadline for
applications Wednesday 18th March 2015.
Details of how to register for a competition workshop on March 3rd at Resource
2015 available here.
More info at innovateuk.org
Public funding calls
Solving urban challenges with data – Feasibility study
Key feature: Investment for feasibility studies projects for innovative,
commercial solutions to increase the resilience, quality of life or economic
performance of urban areas by integrating environmental, social and/or
economic data with data from other sources.
Scale:
• Up to £2.5m
Programme: Feasibility Studies – must be collaborative and business led,
open to companies of any size
Closes: registration closes Wednesday 11th March 2015; deadline for
applications Wednesday 18th March 2015.
More info at innovateuk.org
Public funding calls
Better interactions between people and machines –
Knowledge Transfer Partnerships
Key feature: Investment in Knowledge Transfer Partnerships (KTPs) in the
area of user experience (UX) to encourage new, enhanced forms of
interaction between computing systems and the people who use them. This
KTP competition also runs in parallel with a competition for feasibility studies
(see following slide).
Scale: up to £1m available
Programme: KTPs – opportunity for businesses of any size to work with
academic institutions.
Competition opened 7th November 2014, and the deadline for applications
is noon on the 15th April 2015.
More info at innovateuk.org.
Public funding calls
Better interactions between people and machines –
Feasibility Studies
Key feature: Investment in feasibility studies in the area of user experience
(UX). The aim is to encourage new and improved ways for machines, their
computing systems and people to interact.
Scale: up to £500K available. Small businesses could receive up to 70% of
their eligible project costs and medium-sized businesses up to 60%.
Projects are expected to have total costs of up to £50K.
Programme: Feasibility Studies – must be collaborative and business-led,
open to companies of any size
Competition opens 16th February 2015, registration closes 25th March and
the deadline for applications is 1st April 2015. More info available at
innovateuk.org.
Public funding calls
Wearable Technologies Innovation Contest
Key feature: The IC tomorrow Wearable Technologies Innovation contest is
aimed at encouraging innovation in wearable technology across the themes
of hospitality, accessibility, entertainment, design, sport and wellbeing, health
and safety.
Scale: this contest will offer 6 businesses up to £35K each
Programme: IC tomorrow - connecting start-ups and SMEs with leading
commercial partners and investors.
More info available at innovateuk.org
BFI Film Fund
Each year the BFI Film Fund invests over £26m of Lottery funds to support film development, production and distribution activity in the UK and the budget is set to rise to £30m by 2017.
• Applications are welcomed for film projects in all genres, and we are committed to promoting diversity in the filmmakers we support, the stories they tell and the audiences they reach.
• The fund also supports: a) independent UK distributors to help ensure that the best British and specialised films connect with a wide range of audiences across a range of platforms b) sales companies that are launching new UK films at key international film festivals and markets.
Applications can be made to the Film Fund at any time, and you should expect to receive an initial response within six to eight weeks. Full application guidelines available here.
Public funding calls
Creative England film production funding
Key feature: Creative England now offers two strands of film production funding
for both feature and high-end TV drama.
• Lottery-based Production Fund: this is targeted at feature films with budgets of
up to £2m and looking to experiment with innovative approaches; the fund has
doubled from £500K to £1m for 2014/2015.
• West Midlands Production Fund: invests in the production of feature films and
high-end TV drama from companies based in the West Midlands as well as
from producers looking to establish a base to film in the region. Circa £4m
funding available for 2015, with a maximum investment of £1m per project. .
More info at creativeengland.co.uk
Public funding calls
Public funding calls
Creative Industry Finance
Key Feature: This is an Arts Council England initiative offering business
development support and access to finance to a wide range of creative and
cultural enterprises, from micro-businesses through to major institutions.
Scale: will consider applications for loans from as little as £2,500 up to £15m
Closes: there is no deadline for applying to Creative Industry Finance
More info on creativeindustryfinance.org.uk
Public funding calls
Nesta Impact Investment
Key feature: An equity investment fund investing in social ventures with
innovative products or services that are addressing some of the UK’s most
pressing challenges. Investments are made in areas that tackle:
• the health and wellbeing of an ageing population
• the educational attainment and employability of children and young people
• the social and environmental sustainability of communities.
Scale: between £150k - £1m
Closes: ongoing
More info on Nesta Investments
Public funding calls
Open Project Funding
Key feature: This fund supports the arts, screen and creative industries, with
projects that help them explore, realise and develop their creative potential,
widen access to their work, and enrich Scotland’s reputation as a distinctive
creative nation connected to the world.
Scale:
• For applications up to £15K - decisions will take up to 8 weeks from the date
application form received.
• For applications over £15K – decisions will take up to 12 weeks.
• For applications over £100K (up to a maximum of £150K) - prior approval
required from Creative Scotland before applying.
Opens: all applications accepted from 31st October 2014
More info at creativescotland.com
Public funding calls
Horizon 2020 ICT-19-2015
Key feature: R&D funding of new or emerging technologies (e.g. 3D and
augmented reality technologies) for digital content creation to support the
creative and media industries and for unlocking complex information and media
and interacting with them.
Scale: €561,000,000
Closes: 14th April 2015
Click here for a complete briefing on Horizon 2020.
Further info: Horizon 2020 website, UK list of National Contact Points for Horizon
2020 and the Enterprise Europe Networks
Public funding calls
Horizon 2020 ICT-20-2015
Key feature: This challenge encourages public procurement of innovative solutions to address the needs of the digital learning ecosystem in making better use of educational cloud solutions, mobile technology, learning analytics and big data, and to facilitate the use, re-use and creation of learning material and new ways to educate and learn online.
Scale: €561,000,000
Closes: 14th April 2015
Click here for a complete briefing on Horizon 2020.
Further info: Horizon 2020 website, UK list of National Contact Points for Horizon 2020 and the Enterprise Europe Networks
Other public funding
• Arts & Humanities Research Council – the AHRC offers postgraduate and
research funding opportunities which include opportunities in knowledge
exchange and partnerships and international research.
• Creative Europe - here you can find relevant information concerning
funding opportunities within the Creative Europe programme. .
• Arts Council of Wales – offer a selection of arts grants for creative
professionals and organisations.
• Screen Yorkshire – Yorkshire Content Fund – production finance
available; can invest £1m+ in individual film or TV dramas that will be in
production by December 2015.
Private financing
• Better Business Finance is an excellent tool for identifying the right type of
finance at all stages of a business as well as identifying providers who
can help. This section provides a searchable directory of information
about the members of the UK Business Angels Association, what services
they provide and how to contact them.
• British Private Equity and Venture Capital Association provides an
explanation of different types of financing and other resources for
entrepreneurs.
• The UK Business Angels Association is the national trade association
representing angel and early-stage investment in the UK.
Other financing mechanisms
• Crowdfunder.co.uk – UK’s largest crowdfunding network having
launched 1000’s of projects and raised over £2m, platform launched by
KEO digital and partners include NESTA and Plymouth University
• Funding Circle – an online marketplace which allows savers to lend
money directly to SMEs; the first site to use peer-to-peer lending for
business funding in the UK; as of February 2014 Funding Circle has
facilitated £223 in loans to SMEs
• Kickstarter.com – a global crowdfunding platform based in the United
States; the company’s stated mission is to help to bring creative projects
to life; since launching in 2009, 7m people have pledged $1bn, funding
70,000 creative projects
Support resources for businesses
• AIM Start Up Loans - Government supported start-up loans for the
Creative Industries.
• Creative skillset – supports businesses within the Creative Industries to
develop skills and talent
• East London Small Business Centre - ELSBC is a not for profit
organisation dedicated to helping businesses reach their entrepreneurial
potential through one to one business support and loan funding.
• Growth Accelerator – works with businesses from a diverse range of
sectors; key eligibility criteria include fewer than 250 employees and
annual turnover under £40m.
Support resources for businesses
• NESTA’s Creative Business Mentor Network - offers ambitious creative
companies one-to-one mentoring with some of the creative sectors most
successful business leaders.
• Seedcamp - a London based accelerator that provides startups with seed
money, mentorship, office space, support over a year long programme.
• School for Creative Start-ups - delivers programmes that teach people
how to start and run better businesses.
February Events
Digital Bristol Week – Bristol, 2nd -8th February
Skills empowerment workshop for women working in the games industry –
London, 2nd February
Animex Festival at Teeside University – Middlesbrough, 9th-13th February
Arts Council of Wales’ annual conference ‘Risking Delight: The Arts as a
Resource for Hope’ – Cardiff, 12th February
Digital Innovation The Shed Launch Event – Manchester, 12th February
Innovate UK Creative and Digital Meet-up Event – Liverpool, 12th February
Funding for innovation in the creative industries – organised by Golant Media
Ventures & Digital Catapult Centre, London 16th February
New Social Media & Streaming in Music & Media – London, 24th February
Other Information
• The Creative England 50 – from filmmakers to animators, app makers to
scriptwriters, this study showcases companies across England that have
turned a bright idea into commercial success.
• ‘The geography of the UK’s creative and high–tech economies’ – this Nesta
report is the first systematic analysis of employment in the UK’s creative and
high-tech economies. It analyses their size, growth and distribution across the
country
• Scotland’s Cultural Enterprise Office maintain a comprehensive list of
organisations and websites providing support to creatives working in Scotland
• GP Bullhound is a leading investment bank providing advice on M&A and
institutional capital-raising to growth companies in the technology sector. Its
‘Technology Predictions 2015’ publication offers an informed overview of key
trends currently driving innovation across the creative industries.
Other Information• The Copyright Hub provides: copyright information/education to a wide
audience; and access for users to simpler licensing, with much lower
transaction costs, via websites connected to the Copyright Hub
• International Broadcasting Convention(IBC) 2015 Innovation Awards - Call for
Entries – There are three core IBC Innovation Awards: for the most innovative
projects in Content Creation, Content Management and Content Delivery. The
deadline to apply is 21st February.
• The Business Finance Guide – a journey from start-up to growth is a joint
publication by the ICAEW Corporate Finance Faculty and the British Business
Bank. The guide sets key things to consider and outlines sources of finance
available to businesses – ranging from start-ups to SMEs and growing mid-
sized companies.
• A Short Guide For Innovate UK Competition Applicants - The Knowledge
Transfer Network (KTN) has produced this short guide to help make clear
what an assessor for Innovate UK competitions is looking for.
• Key findings from the DCMS Creative Industries Economic Estimates report
published last month include: the GVA of the creative industries is now worth
£76.9bn per year to the UK economy which equates to £8.8m per hour; in 2012 the
creative economy provided 2.6m jobs (1 in 12 UK jobs).
• Click here to read Creative Industries Council’s strategy, Create UK
• Go to www.thecreativeindustries.co.uk website for sector specific data and
information
• Visit https://app.hiive.co.uk/talent/ to find employees or join the workforce
• Read Innovate UK’s Creative Industries Strategy 2013-2016 highlighting
convergence, data and transactions as key pillars of innovation
Something else we've missed?
Please let us know, plus sign up for monthly updates at:
Thanks
Head of Creative Industries
Knowledge Transfer Network
Overview
Mandy Berry
Chair, Miracle Theatre
Founder Director, Golant Media Ventures
Mandy BerryChair: Miracle Theatre
From beach to screen
Romeo & Juliet, Lusty Glaze Beach, 2010
The Live & Digital R&D project explored the questions – can digital technology be used to:
• capture and distribute small-scale theatre productions economically and effectively to reach new audiences?
• retain the unique intimacy, engaging quality and ‘liveness’ of performances?
• facilitate a viable and sustainable business model around this?
Recording partners
Marketing partners
Sponsors
Distributors
Sales agents
Production/ post prod
Exploitation/ sales
IP frameworkDistribution network
Original production
New content for venues
Additional ways to see production
Access for remote audiences
B2B B2CDirect and indirect relationships
Public screenings – digital and satellite
Home ent DVDs etc
End AudiencesList from ACE segmentation
Cinemascommunity, cultural and commercial non cinema venues
Capture - filming and post production
Additional performance costs –actors, venue etc Rightsholders fee
from distributors and sales agents
DVD sales
Touring Theatre company
Business model chart of accounts
• Profit and loss AND balance sheet structure reflects that this is venture requiring risk capital and planned to make a profit
• Exploitation of film across multiple platforms & windows – and ancillary rights (eg soundtrack) and spin-off products (merchandise)
• What the original producer(s) of the performance take as a fee can significantly effect the profit of the film
• The costs of ‘producing’ – management, executives, commercial negotiations, business affairs (legal) – need to be factored in
• There will usually be multiple investors – and multiple other rightsholders with a share of profits – rights/profit share require administration
Learnings
• ‘Alternative content’ screening - high-growth sector but business/delivery models in flux
• New distribution models can learn from touring theatre’s management of relationships with venues and promoters
• There is an audience for this – it can bring new audiences rather than cannibalise existing ones
• But to reach these audiences requires new kinds of partners –with new kinds of deal structures
• Think about each filmed performance as a ‘mini venture’ – not a funded ‘project’ aiming to break even
Overview
Mandy Berry, Chief Executive
Cinegi
DIGITAL FILM DISTRIBUTION SERVICE
ANY VENUE CAN BE A ‘CINEMA’
MANDY BERRY, CHIEF EXECUTIVE
A SPIN OUT FROM
WHAT CINEGI DOES
Filmed media rights management
Acquire rights to a range of filmed media Rights management and exploitation that is auditable
Secure content distribution on our own platform
Industrial strength Digital Rights ManagementDownloaded over the public Internet and standard broadband
Marketing for venues
Marketing collateral and materials for content marketingGuidance, tools and support for event promotion and audience development
Better than DVDPlayed out from standard computer and ‘prosumer’ projector and sound equipment
Screening in Full HD
CINEGI PLATFORM – B2B WEBSITE
Catalogue – packaging, programming & booking
Paperless box office & admissions reporting
CINEGI PLATFORM – CINEGI PLAYER
Download Manager
In-venue Playout
• As easy to use as a catch-upTV service
• No special training required
CINEGI IPE-
Bu
sin
ess
Secu
re d
igit
al
de
liver
y
Brand
IP
Web application design & software
IP
Catalogue
IP
Customerdatabase
IP
Media, metadata& collateral
IP
Player design& software
IP
DEVELOPMENT & FUNDING JOURNEY
Public funding & corporate support 2011-12
VC Investment April 2014
- Research into audiences and alternative
venues
- Business modelling for alternative content
Public funding 2013
- Gap finance
- Market analysis, product strategy, business
planning
- Management & administration resources
- Platform & player built
- Team in place
- Initial content secured
- Private beta in South West
- Funding from public funders and commercial
partners (no equity/rights taken)
- Proof of concept – created technical,
commercial & legal blueprint
Innovation support all stages 2010-14
Digital R&D Fund for the Arts
• Keep it simple
• Be open
• Partnerships
• Tenacity
81
KEY SUCCESS FACTORS
Private finance: structures, hybrid
Patrick Towell, Chief Executive
Golant Media Ventures
John Spindler, Co-founder
London Co-investment Fund
Private investment market
Financing an Ambitious Start-up
John Spindler CEO of Capital Enterprise
84@capenterprise
…to start you need..
@capenterprise 85
No 1 source of Finance…
@capenterprise 86
Your Money, the money you can borrow, your family and friends money…
Sound advice is…
Don’t Raise… …unless
• Can’t launch a product into market without external funds..
• Need to get big fast to compete.
@capenterprise 87
“There is an opportunity gap when the scope for growing income at a very fast rate is
limited for those who have too little to invest , but expands dramatically for those who can invest a bit more.”- i.e. to win requires scale
Banjaree &Duflo- Poor Economics
@capenterprise 88
..only raise to SCALE..
-20
-10
0
10
20
30
40
50
0 2 4 6 8 10 12 14 16
Net
Inco
me
Period
Start-up Growth Pathway
… and the world is changing…
..So a Start-up in want of investment needs..
• Team, Tech & resources that is FIT for the task of creating an awesome company
• Product that is the best solution FIT for the target customers problems.
• Business Model that is FIT to be scaled.
• Smart Ass Team
• with a Kick Ass Product
• With a Business model that can “capture” a Big Ass Market
( Jeff Clavier 3 Ass-es rule)
+ Capital Efficient to create a repeatable and scalable business.
@capenterprise 91
Idea to Tech Business- Three Chasms
@capenterprise 93
Idea
Problem/ Space
Exploration
Design/ Prototype
Beta Test
Adapt/ PivotX2
Launch
Bootstrap- FFF
Innovation AwardsStart-up Loans
Crowdfunding i.e. Kickstarter
Seedrs/ CrowdcubeSEIS
Super Angels/ Angel Groups
Early Stage VC’s
Start-Up Funding road –map
Pre-Accelerators
Hackathons/ Hatcheries/ Meet-ups
Accelerators
Accelerators
Funding Product Development & BETA Testing
Grants & Awards General
• Technology Strategy Board ( R&D Funding) - http://www.innovateuk.org -http://www.innovateuk.org/content/competition/grant-for-rd-single-business.ashx
• Knowledge Transfer Networks- www.innovateuk.org
• IC Tomorrow- https://connect.innovateuk.org/web/ictomorrow
• NESTA- http://www.nesta.org.uk/
• London European Enterprise Network- http://www.een-london.co.uk
• EU Funding for SME R&D - http://www.eurostars-eureka.eu/what.do
• EU Funding for R&D collaborations: http://ec.europa.eu/research/participants/portal/page/calls
• Knowledge Transfer Partnerships funding support-http://www.ktponline.org.uk/ktp-what-will-it-cost-my-business
• J4B- Portal for grant finding http://www.j4b.co.uk
@capenterprise 94
Crowdfunding (Reward)Crowd funding Platforms-Reward based Crowdfunding platforms will help you to raise funding to build a proto-type and market test a great idea or product. Great for pre-selling cool tech hardware.
• www.kickstarter.com• www.indiegogo.com• www.hubbub.com• www.crowdfunder.co.uk• http://spacehive.com• http://crowdshed.com• https://www.banktothefuture.com
@capenterprise 95
Funding the Runway…?
• How much/ little money is needed to build and test MVP/ demonstrate viability. ?
• Usually required to fund co-founder “Ramen” salary
• Going to need a Budget, Cashflowforecast and “burn rate”
96@capenterprise
@capenterprise
Need less than £10K to get to Build and test MVP?
- Sources of Grants- www.j4b.co.uk- Competition funding £1000 issued to 10+ businesses per month- http://www.shell-livewire.org- Princes Trust http://www.princes-trust.org.uk/need_help/enterprise_programme.aspx- £1000- £20,000 Enterprise Loans for Under 25’s- www.startuploanslondon.co.uk or www.startuploans.com- New Enterprise Allowance Scheme – Check who delivers the scheme in London by e-mailing Capital Enterprise.- Community Development Finance Associations- http://www.cdfa.org.uk - Also check out North London Community Finance- ELSBC Access to Finance – Business Plan support for those looking to raise up to £10K• Soft loans for Creative Businesses- http://www.creativeindustryfinance.org.uk/
Need Less than £10K to Launch a
business
No Funds
Grant-www.j4b.co.uk
Unemployed?New Enterprise
Allowance Scheme
Self Fund
BorrowWrite a simple
Business Plan & 12 month cashflow
Community Development
Finance Institution
Start-Up Loan Bank
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Accelerators In London
http://www.f6s.com/
https://capitallist.co
Investment Readiness Test
@capenterprise 99
Are you Investment Ready?
@capenterprise 100
@capenterprise 101
1Idea Stage
2 Commitment Stage- Secure Co-Founders
3FFF funding round –Build & Beta Test Minimum Viable Product
4Seed Investment Round (Angels + Early VC’s)- Prove Business model & acquire metrics to prove scalability
5Series A Round (Angels, VC’s & Strategic Investors) – Go for scale, build out team, technology-EXECUTE
6 Exit
(Average 7 years and after many rounds) – Trade Sale or IPO
££££££££££££££
How Start-Up Funding Works Why 100% of Nothing is worth Less than 10% of something big
Investment Essentials
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Round Amount Purpose London Pre-Money
Valuation Guideline
Source of Investment What investors
like to see
Pre Seed £25K-£150K
(SEIS eligible)
Assemble Team/ Build & Test
MVP/ Proof of Concept R&D
Zero- £500K Own Money/ FFF/
Crowdfunding/ SEIS Funds/
TSB
Unfair Advantages
Seed £150-£350K BETA Test/ Launch into
Beachhead/ Proof of Product
Solution Fit
£500K-£1.5m Business Angels/
Crowdfunders/Seed VC's/
Co-Investment Funds
SMART Team- Early
Evidence of Product/
Solution Fit- Validating
customers/ users
Super Seed
(Bridging
round)
£500K- £1m Working Business
Model/Proof of Product/
Market Fit/ Demonstration of
Growth
£1.5M-£4m Super Angels/ Seed VC's Product Solution FIT
Proved- Early
Indications of Product-
Market Fit ( i.e.
revenues)
Series A £2m-£15M+ Scale £8m- £50m VC's/ Family offices and
Corporate Ventures
Revenues & METRICS
proving scalability.
Importance of Tax breaks
• EIS
• SEIS
• ECF’s
• Co-Investment Programmes
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@capenterprise
Seed Enterprise Investment Scheme-SEIS is a tax break launched in April 2012 for UK tax payers to encourage them to buy shares in start-up companies registered in the UK The Facts: • SEIS investors can input £100,000 in a single tax year rising to a maximum £150,000 over two
or more tax years in to a single company• Investors cannot control the company receiving their capital• Investors pick up 50% tax relief in the tax year the investment is made, regardless of their
marginal rate.• In the 2013-14 tax year, tax payers can roll 50% of a chargeable gain in the tax year in to a
SEIS with a full capital gains tax exemption (another 14%)• The business must be a start-up company -registered in the UK within 2 years of claim. • The company must not employ more than 25 workers.• The company must have assets of less than £200,000.• The company has to trade in an approved sector – generally not in finance or investment, for
example, a property company raise capital as a SEIS.
SEIS is…… “a game changer”?
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Proof of Product-Solution Fit
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Does the tech work/
product deliver?
Does it create value
for the customer?
Can You Capture
some of that Value? £££
Product Solution Fit
P/S Fit for Creative/ Content based start-ups…
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Am I talented?
Have I achieved “Critical” acclaim?
Do I create value for
my customers?
Product Solution Fit
Proof of Product-Market Fit
@capenterprise 107
• Team/ Resources/Plan
• Business Model
• Market• Technical
Does it workDoes it create Value for the
customer?
Is the Team fit and able to
deliver
Can you make money/ repeat &
scale.
POC P/S Fit P/M Fit
SEIS LCIF VC
What stage is your business at?
FF
Investors tend to invest for transitions…
Capital List –The Minimum Viable Introducer
“ Showcasing and connecting Entrepreneurs to champions and
investors”
beta.capitallist.co
@capenterprise 109
Send a slide deck and get introducedhttp://www.slideshare.net/slidesthatrock/how-to-pitch-a-vc-redesigned
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Ten slides. Ten is the optimal number of slides in a PowerPoint
presentation because a normal human being cannot comprehend
more than ten concepts in a meeting—and business angels are very
normal. If you must use more than ten slides to explain your
business, you probably don’t have a business. The ten topics that an
investors cares about are:
1. Summary and call to action/ what do you want?
2. Problem
3. Your solution
4. Business model
5. Underlying magic/technology
6. Marketing and sales
7. Competition
8. Team
9. Projections and milestones
10. Status and timeline
@capenterprise
Send to : [email protected]
7 Types of Early Stage Investors in London Market
1. Crowdfunders/ Platforms2. Tax Relieve Seeking SEIS/EIS Funds3. Government Backed ECF’s4. Traditional Angel Syndicates5. Super Angels6. VC’s 7. Strategic Investors ( Corporate Venture)
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Seed/ Early stage Investment Platforms
Crowdfunders.www.crowdcube.comwww.seedrs.comwww.crowdbnk.comhttps://www.crowd2fund.com
Angel Platforms- www.angel.co- www.syndicateroom.com
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“Pay to Play” Funds.
Top SEIS Funding Syndicates1. Jenson Solutions-
www.jensonsolutions.com2. Ingenious Media-
www.ingeniousmedia.co.uk3. Ascension Ventures-
http://www.ascensionmedia.com/ascension-ventures.php
4. Start-up Funding Club-http://www.startupfundingclub.com/
5. Ascot SEIS –www.ascotwm.com
Top Traditional Angel Syndicates
1. London Business Angels: http://www.lbangels.co.uk/
2. E100 (LBS)
3. Oxford Angels: http://www.oxei.co.uk
4. Cambridge: http://cambridgeangels.com
5. Envestors- www.envestors.co.uk
6. Angels Den- www.angelsden.com
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Super Seed Investors
• Playfair Capital- http://playfaircapital.com• Angel Lab- http://angellab.co.uk/• Firestartr- www.firestartr.com• Kima Ventures- http://www.kimaventures.com• Boundary Capital - www.boundarycapital.com• Venerex ( Fashion Tech- see Capital List) • Jam Jar Investments-
http://jamjarinvestments.com• No 1 Seed - www.number1seed.co.uk• Angel List Syndicates – www.angel.co
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Enterprise Capital Funds.
ECF’s
• Notion Capital – SAAS specialist- See portfolio here
• Passion Capital: Early Stage, see their portfolio here.
• Sussex Place Ventures- Early stage ( linked to LBS)
• Amadeus Capital: Early and mid-stage- just launched new fund.
• Episode1: Early Stage Software Companies
• Longwall – Oxford Based – Science backed Start-ups focus
• Dawn Capital - Fintech and SAAS
• IQ Capital – Seed and Series A
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Active Seed VC’s in London. Big 7
Accel Partners: Stage agnostic, see their portfolio here.
Balderton- Stage Agnostic- See there portfolio here
Index Ventures: Stage agnostic, see their portfolio here.
Wellington Partners: Stage Agnostic, see there portfolio here
Octopus Ventures: Early to mid-stage, see their portfolio here.
DN Capital : Early and mid-stage, see their portfolio here
DFJ Esprit: Early to mid-stage, see their portfolio here.
Cool Cats
• Profounders: Early and mid-stage, see their portfolio here.
• MMC Ventures - Series A Fund- Co-Investment fund with Mayor of London
• Piton Capital: Early and mid-stage specialize in market places.
• White Star Capital- Early stage – See portfolio here
• EC1 Capital: Early stage, see their portfolio here
• Connect Ventures- Early stage and very cool.
• Hoxton Ventures – New and focus on seed with next move to USA.
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Specialist FundsSocial/ Tech for Good
- NESTA - www.nesta.org.uk/investments
- Unltd – www.ubltd.org.uk
- Big Society Capital- http://www.bigsocietycapital.com
- Sources of Social Finance- http://www.bigsocietycapital.com/finding-the-right-investment
- Bridges Venture Fund http://www.bridgesventures.com/social-entrepreneurs-fund
- Big Issue Investment- http://www.bigissueinvest.com
- Social Finance- http://www.socialfinance.org.uk
- Social Investment Fund- http://www.thesocialinvestmentbusiness.org
Women
- Stargate Capital- Trapezia- http://www.stargatecapital.co.uk/trapezia_1.aspx- FSE-- http://thefsegroup.com/investors/business-angels/incito-ventures/- Aspire Fund - http://www.capitalforenterprise.gov.uk/files/Aspire%20Information%20Leaflet%20(v%202)%20Flyer%20brochure.pdf
Green
- Bridges Sustainable Fund- http://www.bridgesventures.com/sustainable-growth-funds
- Ingenious Media- Cleantech Fund http://www.ingeniousmedia.co.uk/investments/investment-opportunities/clean-energy
- Carbon Trust- http://www.carbontrust.com/about-us/our-investments
- Low Carbon Accelerator- http://www.lowcarbonaccelerator.com
- CT Investment Partners- http://www.ctip.co.uk
- Wellington Partners- http://www.wellington-partners.com/wp/index.html
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Corporate Players
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Who can Capitallist introduce a start-up to...
http://capitallist.co/our-investors
@capenterprise 119
Get in touch!
Building resilience and agility• Innovation and realising opportunities from digital• Making new revenues, reaching new customers• Distribution strategy and organisational change
Designing new products and services• Realising the full value of content & data• Devising new entertainment, cultural & information propositions• Developing creative, technical and business solutions
Public funding and private financing• Securing funding from a mix of funders• Being investment ready – proposition & business model
Patrick Towell patrick.towell@golantmediaventures www.golantmediaventures.com @golantmedia
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