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Transformative Funding for growing businesses and social enterprisesImpact Report 2016

2 The FSE Group Impact Report 2016 1

Over the past 14 years we have seen many changes in the funding landscape affecting small and medium sized businesses. The evident decrease in availability of bank finance has been accompanied in recent times by an unprecedented upsurge in alternative finance such as peer to peer lending and crowdfunding platforms.

Welcome to The FSE Group 2016 Impact Report.

Whilst these platforms are proving highly valuable to many companies looking to grow, there remains space for a funder that can really get to know a business and truly support it on the journey to achieving its goals. A funder that can share its team’s years of knowledge and experience to help that business succeed.

As a Community Interest Company, The FSE Group has a blended ethos which combines its commercial discipline with impact – both social and economic – objectives. It is this ethos that characterises the way we operate and is one of the reasons that many of our customers return to us when seeking further funding. When we ask our customers what’s important to them this comes through clearly. It is apparent just how much they value the personal relationship they have with us. You can read more about this in the pages that follow.

This report sets out our position and role within the funding landscape, providing information about the funds we manage, the kinds of businesses we support and why. But more significantly, it tells you about our impact; how we are helping to create jobs, contribute to economic prosperity and, through our impact investments, make a real difference to disadvantaged individuals and communities.

As well as the facts and figures around our operational activity, you will also find case studies to give you an insight into the range of businesses we work with.

The FSE Group, with its team of dedicated fund managers, has achieved a great deal since it was set up in 2002, of which we are very proud. We look forward to continuing this work and helping more businesses and social enterprises to reach their full potential.

Kevan Jones Chief Executive

The FSE Group Impact Report 2016

2 The FSE Group Impact Report 2016

Access to appropriate finance has long been recognised as one of the most significant factors in enabling business growth.

Our SME clients have experienced average employee growth of 50% and average turnover growth of 64% since working with us.**based on an average relationship of 34 months

of our customers would recommend

The FSE Group. 96%

Enterprises supported

400

Supporting growth.

Lent / Invested

£45mCurrent funds

under management

£46mJobs created / safegaurded

1800+Private investment

leveraged

£200m

The funding requirements of many early stage and growing SMEs (small and medium enterprises) fall into a gap that is not met by mainstream institutional finance providers such as banks, large venture capital fund companies or indeed, most of the crowd funding platforms.

With this in mind, FSE was set up in 2002 by two former government agencies in the South East, to provide improved access to finance and coordinate the support needed to enable the region’s ambitious businesses to reach their full potential.

With the creation of an arms-length company to deliver funding activity across the South East, SMEs with high growth potential had access to professional fund managers with commercial expertise to guide them on their funding journey.

Initially offering SME loans of up to £100,000 from its inaugural Accelerator Fund, FSE provided some of the region’s first alternative finance for growing companies. Further assistance was provided through seminars and workshops to help businesses prepare for investment, together with a mentoring scheme and a business angel network. With the addition of its first equity fund in 2007, South East Seed Fund, a full package of funding and associated support was now available.

In January 2012 FSE C.I.C. was born, now with no geographical boundaries. With a clear undertaking to continue its focus on providing growth finance and support for SMEs, FSE added the new dimension of social impact investing to its mission. Attracting a mix of public and private investment, FSE is committed to developing and delivering finance packages for the growth of both SMEs and social enterprises. Today The FSE Group provides a range of finance solutions that can be tailored to the needs of its customers. Offering loans and equity investments covering a range of £25,000 to £1million, its specialist fund managers combine their commercial track record with impact objectives to recognise and nurture true growth potential.

Over the last decade and more, The FSE Group has provided funding to businesses at varying stages of development from across a range of sectors, with one key goal: to support growth.

A Community Interest Company (C.I.C.) Limited by guarantee

FCA authorised Via 100% subsidiary FSE Fund Managers

Growth funding track record Unsecured lending and investing since 2004

Providing market gap funds To deliver social and economic impact

Innovative product portfolio Equity instruments, mezzanine, loans, grants

A blended ethos Focused on commerical and financial returns but also delivering alongside wider social objectives

Highly skilled team In early stage investment and lending

The FSE Group

3The FSE Group Impact Report 2016

4 The FSE Group Impact Report 2016 5The FSE Group Impact Report 2016

Case study iAbraWe understand the challenges facing small and medium sized businesses and the risk management challenges in investing and lending to this market. As a fund manager working with high growth SMEs for over a decade, our experience makes us the ideal partner to deliver growth funding initiatives to ambitious companies on behalf of a range of public sector and private investors.

Working in collaboration with these organisations has allowed FSE to continue providing funding to SMEs with the potential to grow, create jobs and contribute to the economic prosperity of the areas in which they are based.

Current funds include our pioneering Funding Escalators, run on behalf of three of the Local Enterprise Partnerships (LEPs) in the south east, the Regional Growth Loan Scheme operating across the East of England on behalf of a further five LEPs, as well as the South East Seed Fund, Bedford Business EIS Fund and Adimpetus EIS Fund which are now fully invested but with active portfolios.

Our loans and investments are for a variety of growth and expansion activities including marketing and sales team development, operational scaling up and new product or service enhancement. This funding flexibility, which is reflected in the variety of sectors that we have supported to date, results in an exciting and diverse portfolio that includes fledgling high tech businesses together with retail, food and drink and manufacturing companies.

Our funding escalators offer both Growth Equity Funds and Expansion Loan Schemes, as well as in some areas, a Pre-Revenue and Commercialisation Loan Scheme and a Trade Finance Loan Scheme. This means that companies can access the right type of funding appropriate for their stage of growth.

The enterprise iAbra was set up in 2011 to develop its deep learning neural networks within the field of machine vision technology. Machine vision software affords machines the human-like ability of vision, i.e., seeing and interpreting the world around them and making decisions based upon what they have seen. The company has been exploring several applications for its software and has identified a number of key markets, including financial services, industrial applications, defence and, at the forefront, driverless car technology.

In this context the software can identify objects in the traffic environment and respond appropriately. For example, it ‘learns’ that a pedestrian at a zebra crossing means stop.

The ambition With the race to driverless cars in full throttle, iAbra’s technology is fast gaining traction as a platform to be reckoned with in this field. Having established strong relationships with some of the key players in the automotive industry, the company is now setting its sights on global success.

The funding An initial investment was made by the Bedford Business EIS Fund alongside angel investors. An investment from the Enterprise M3 Growth Fund was made as part of a later funding round, together with additional funding from the Bedford Business EIS Fund and corporate investors. This latest funding will be used to facilitate the rapid expansion that iAbra is currently facing.

The impact The funding has allowed iAbra to focus fully on the most suitable applications for its technology, exploring the best options for achieving its potential. The company has now expanded in a move that has made Petersfield its sales and marketing base, creating a number of new jobs in the process. The management team is now looking to grow the infrastructure and increase headcount in both Bedford and Petersfield, positioning the company for the strongest possible growth.

SME funds.

“Having an institutional investor of such credibility has helped us enormously with attracting both additional angel and corporate investors.” Ian Taylor CEO, iAbra

South East Seed Fund - £7m British Business Bank, University of Brighton, University of Reading, Oxford Brookes University, Bucks New University, University of Sussex, Prologis

Thames Valley Berkshire Funding Escalator - £8.3m Thames Valley Berkshire LEP

Enterprise M3 Funding Escalator - £5.5m Enterprise M3 LEP

Coast to Capital Funding Escalator - £5m Coast to Capital LEP

East of England Regional Growth Loan Scheme - £6.5m Hertfordshire LEP, South East LEP, SEMLEP, New Anglia LEP, Greater Cambridge Greater Peterborough Enterprise Partnership

South East Sustainability Loan Fund - £2m European Regional Development Fund

Adimpetus EIS Fund Angel Investors

Bedford Business EIS Fund Angel Investors

Over

£28m Invested / lent

£35.7mFunds under management

1300Jobs

created

220Companies supported


Case study ChillistickDebt funding.

The enterpriseChillistick was set up by chemical engineers, Mike Ashe and Chris Buchanan, in 2011 to launch its inaugural product of the same name – a drinks stirrer which uses dry ice to create a ‘fog’ around a soft drink or cocktail. Originally developed for a Smirnoff Vodka campaign, the ground-breaking Chillistick incorporates a one-way valve to allow dry ice to be safely contained in the stirrer, a feature missing from any similar products.

On the back of its success the team turned their focus to developing further products that would allow the impressive effects of dry ice to be used in the hospitality and home markets. Diversifying its offering to take advantage of new markets and stay ahead of the competition, the company has gone on to develop an innovative range that includes ‘smoking’ shot glasses, pitchers and champagne buckets as well as home party kits for Halloween and other events. Chillistick also provides a dry ice education resource and to date has supplied its dry ice products to over 500 schools and colleges throughout the UK.

The ambitionHaving established the business as a market leader in the UK, Mike and Chris recognised an opportunity, fuelled by further developments in their technology, to exploit wider geographical markets and are now working to grow the business at an accelerated rate.

The fundingTo help them reach this goal, Mike and Chris successfully secured £200,000 from the Enterprise M3 Expansion Loan Fund which they will use to facilitate the introduction of the new ‘fog jug’ product line as well as support the overall expansion of the business including marketing and promotional activity, improved facilities and equipment.

The impactThe loan will support Chillistick’s overall growth with specific focus on expansion into new territories and development of new product lines. This will in turn enable the company to create 12 new jobs over the next two years.

“From the off we felt a genuine interest in our business from The FSE Group. They have provided rounded support over and above the loan itself.”Chris Buchanan Director, Chillistick

The FSE Group is dedicated to bridging the funding gap for innovative, ambitious and scalable SMEs. Providing medium term debt finance to high growth SMEs has been central to The FSE Group’s offering and objectives since its launch in 2004. We have consistently delivered loans to businesses that demonstrate realistic and significant growth potential but find it difficult to secure mainstream finance due to their risk profile.

Customer surveys and research indicate very high client satisfaction ratings with FSE as a lender and our clients overall have achieved growth in excess of market trends.

We achieve this by taking the time to understand each business we support, focusing on the future potential of its product or service and crucially, the strengths and motivations of the management team. We are committed to supporting our clients throughout their expansion and maintain a proactive relationship, meeting regularly, signposting management to relevant sources of advice and engaging our mentor network where appropriate.

We provide loan funding for businesses at various stages of growth, from pre-revenue and early commercialisation, through to expansion and strategic trade-finance and bridging support. Our expertise and focus means that we can manage and reduce exposure to the risks inherent in funding growth businesses, whilst harnessing positive economic returns.

Coast to Capital Loan Scheme Expansion loans up to £500k

Our Debt Funds

Thames Valley Berkshire Loan Scheme Pre-revenue loans up to £30k Commercialisation loans up to £50k Expansion loans up to £200k Trade finance/short-term loans up to £200k

Enterprise M3 Loan Scheme Expansion loans up to £200k

East of England Regional Growth Loan Scheme Expansion loans up to £200k Trade finance/short-term loans up to £200k

South East Sustainability Loan Fund Loans on matching terms for businesses with clear environmental benefts inherent in their product or service

£20.7m £21.5m

800+£40m

Revolving funds under

management

Already lent across 184 loans

Jobs created / safeguarded

External finance leveraged

Providing loans between

£25-500k

Separate Debt Funds

5

feel their relationship with us has contributed to the success of their business.93%

1

2

3

4

5



With a growing equity portfolio, our investment strategy centres on early stage companies with exceptional potential.

The FSE Group has an outstanding track record in early stage investing, managing growth funds across our three funding escalators, as well as two fully invested, specialist EIS funds. The South East Seed Fund was established in 2007. Its investors now include British Business Bank, five of the region’s universities as well as the private sector. It has a diverse and thriving portfolio of emerging technology and is leading the UK performance of similarly positioned funds, whilst driving international expansion and skilled employment across the South East.

Our hands-on portfolio management approach means that we work closely with our client companies to drive optimum growth over the investment period. Our team can assess, appraise and structure the best possible deals and manage them proactively for a strong exit. We operate a well-established business angel network and this, together with our relationships with institutional investors, means that we can facilitate investee fund-raising, both at initial investment and follow on stage.

The enterprise Vigilant Applications is a software developer providing advanced solutions for monitoring and managing employee behaviour. Its software helps organisations meet a wide range of IT Governance, Risk and Compliance (GRC) obligations, mitigate exposure to risks arising from accidental or malicious actions of employees, and identify fraudulent activity of various types.

The company operates across a range of sectors including retail where, by integrating with existing in-store electronic point-of-sale and CCTV systems, its LiveStore product monitors for and highlights unusual, out-of-policy or potentially fraudulent staff behaviour, reducing shrinkage and allowing tight operational control to be maintained across geographically diverse locations.

Its technology is also applied in enterprises across a range of other sectors - most notably police, healthcare and financial services - to protect sensitive information and ensure complete auditability.

The ambition Following highly successful early ventures in both sectors, the company has received considerable interest from major players in both the UK and global markets and is now looking towards significant expansion throughout the UK, Europe and the U.S.

The funding A £200,000 Thames Valley Berkshire Expansion Loan was initially provided, alongside external equity investment, to enable the company to further the sales and marketing strategy. Later funding of over £500,000 was facilitated by The FSE Group and included a £200,000 investment from the Thames Valley Berkshire Growth Fund with the remainder raised from FSE’s business angel network.

The impact Initial funding from the Expansion Loan Scheme has been used to fund overheads during the pilot stage and allow the company to fully explore new channels. The business is now in a strong position to enter its next phase of growth and take full advantage of current opportunities, moving into further vertical markets including the financial services sector. The latest funding round will be used to expand the current team, focusing on engineering and sales, as well as increase brand presence. It will also help to improve the balance sheet of the business, giving clients greater confidence in its ability to meet their needs.

Case study Vigilant ApplicationsEquity funding.

“It’s refreshing to work with a funding partner that understands the challenges facing businesses going through significant, but at times hard to predict, growth.”Mike Williams CEO, Vigilant Applications

65 Investments in

40 Companies

£15m Under management

£7.3m Invested

OverOver

£114m Co-investment

leveraged

600+ Jobs created/ safeguarded

of our customers feel we are knowledgable of and responsive to their

business needs.96%

Separate Equity Funds

6


Coast to Capital Growth Fund Currently investing up to £200k

Our Equity Funds

Thames Valley Berkshire Growth Fund Currently investing up to £250k

Enterprise M3 Growth Fund Currently investing up to £175k

South East Seed Fund Providing investment to support the existing portfolio

Bedford Business EIS Fund and Adimpetus EIS Fund Managing the active portfolio of these specialist EIS funds

1

2

4

5

3

10 The FSE Group Impact Report 2016 11The FSE Group Impact Report 2016

A key area of focus for The FSE Group is funding provision in the social impact space – a growing sector that aligns well with our own status as a Community Interest Company.

With our first social offering, the Community Generation Fund, we were able to support communities in creating their own renewable energy infrastructure.

Now we are providing debt finance to a wider range of social enterprises through our Social Impact Accelerator (SIA) Loan Scheme.

Why is it needed?

Social enterprises have business models which are designed to generate surpluses like traditional businesses whilst trading with the primary objective to tackle social and environmental problems, improving communities and people’s life chances. They aim to make profits from selling their goods or services but they achieve impact through the way they conduct their business and/or by the way they allocate those profits. The task they face is huge; today, one third of the UK population suffers from multiple deprivation, a figure that has more than doubled since 1983.

The good news is that UK social enterprises are thriving and are making a real difference to society and the economy. They compare well to their mainstream SME counterparts in many key areas: turnover growth, workforce growth and job creation, innovation, business optimism, start-up rates and diversity in leadership.

There are challenges, however. Almost half of social enterprises are under five years old and funding remains a key barrier to participants of all sizes.

We started the SIA fund at the beginning of 2014 to provide financial support to UK social enterprises looking to create a step change in their impact and resilience.

There are only a small number of funders in the UK that can help social enterprises unable to access enough support from traditional (bank) sources, to fulfil their aspirations at meaningful scale. The SIA can provide up to £1 million of funding for expansion projects across a wide range of social themes. We have supported young businesses which are not yet breaking even through to larger, more established charities, but they all share two key things in common:

They are helping some of the most disadvantaged groups in UK society.

Social impact funding.

From a standing start in 2014 we have committed £3.5million of funding to UK social enterprises. This support has helped businesses providing early years education & family support, training and apprenticeships for disadvantaged young Londoners, housing for vulnerable adults in Greater Manchester, community transport, affordable loans for low-income households in Lancashire and South Wales and even, potentially, a community colliery in West Yorkshire.

All of these organisations were unable to get enough – and for some, any – funding from traditional sources.

Progress so far

Why FSE?

£3.5m of funding to UK social

enterprises so far

1. 2.

18m people can’t afford adequate housing

12m people are too poor to engage in common social activities

All figures according to The Poverty and Social Exclusion in the United Kingdom (PSE) project

1.5m children live in households that cannot afford to heat their home

of our customers feel we provide a

unique service70%

They are ambitious; they want to expand, both to increase their social impact, but also their resilience as organisations and to secure their long term futures.

5.5m adults go without essential clothing

4m children and adults are not properly fed by today’s standards

12 The FSE Group Impact Report 2016 13

The enterprise Moneyline was established in 2001 to provide more affordable credit to low income households and is now one of the largest community lenders in the UK. It has grown from a single branch to operating 16 branches across north-west England and south Wales. Moneyline lends to households who pay a premium for access to credit. A key focus is to create choice for these low income households by offering loans with the opportunity to save alongside borrowing by rounding up repayments. Moneyline also offers flexibility to its customers that allows them to manage the variation and uncertainty they can experience in their income, making a difference to their longer term financial stability.

The ambition Moneyline’s ambition is to expand its services across a greater area, providing affordable loans to more people who need them. It is looking to open new delivery channels and increase its annual lending of £9million in 2015 to £40million by 2019. This is expected to boost the number of loans made to around 58,000 in the same period.

The funding An unsecured SIA loan of £750,000 was provided as part of a £3.25milion funding package, alongside other social and commercial investors.

The impact Moneyline works to relieve poverty in disadvantaged communities, with over 70% of customers falling into the most deprived 20% of households. Its increased activity will further tackle the ‘poverty premium’ i.e. the additional cost (currently thought to be around £1000 per annum) that low income individuals find themselves paying due to higher pricing for basic goods and services, including the cost of credit. Moneyline estimates that during 2014 it saved its customers more than £2.5million in interest by providing an alternative to payday and doorstep lenders. As its services increase, so will this saving.

Case study Moneyline

“We have previously experienced a one size fits all approach with other finance providers which can be limiting but with The FSE Group there was a more flexible approach to structuring an investment deal that would work with a wider portfolio of investors.”Diane Burridge CEO, Moneyline

Social enterprise provision is growing and so is the social investment market needed to support it, particularly in the unsecured lending space that FSE occupies.

We are working hard to attract more funds into the market so we can play our part in supporting this future growth.

In the meantime, the information below provides more detail on some of the projects FSE has supported and how this is enabling meaningful growth in the social impact of our clients.

Social impact funding.

Area: North West (Bolton, Manchester)Activity: Helping vulnerable adults achieve independent, community livingAmbition: Expand from 70 individuals supported to more than 400 over a 3 year period

My Space Housing Solutions (Charity)

£500k Term Loan Facility

Area: UK wideActivity: Provision of community transport & employment /training servicesAmbition: Expansion of fleet & services to provide an additional 240,000 subsidised journeys per year

HCT Group (Charity)

£750k Revenue

Participation Note

Area: UK wideActivity: Helping vulnerable families via children’s centre, nursery & wider family support servicesAmbition: Capacity building / central resource enhancements, to enable support to over 80,000 families

4 Children (Charity)


Area: Lancashire and South walesActivity: Provision of affordable personal finance to low-income householdsAmbition: Expansion of loans and inviduals supported to 36,000 loans per year by 2018

Moneyline (Community Benefit Society)



Having an independent and experienced person to provide a sounding board and help a business owner uncover options they hadn’t thought of, could be the difference between failure and success.

Under our current mentoring programme we have over 30 trained mentors ready to work with SME owners and managers, offering their time for free, to help those businesses achieve their goals. As well as ensuring the mentors are appropriately trained, our role is to match an individual seeking business mentoring with a suitable mentor and oversee the six month long mentoring relationship.

Over the last two years our mentoring programme has trained 32 mentors and matched 27 relationships, with 50% of these continuing beyond the initial six month period facilitated by The FSE Group.

Mentoring.

The value of a good business mentor is well understood by The FSE Group. Indeed, we have been training mentors and matching them with high growth companies for over ten years and see the benefits this brings to the businesses we support.

The funding The company has received a total investment of £430,000 investment from the South East Seed Fund and the Coast to Capital Growth Equity Fund, through a series of funding rounds that have also included angel investment facilitated by The FSE Group. The latest funding will allow the company to increase its presence within additional university towns, scale its technology and drive user growth.

The impact The funding and support from The FSE Group, which has included helping to secure a chairman for the business, has helped FIXR to refine its product offering, grow to 11 employees, fully focus on its student market and establish considerable traction across the UK. The company has over 90 student brand managers operating in ten markets and has formed relationships with high profile event organisers and venues.

The enterprise FIXR is a technology company reinventing the organisation and booking of student events. It provides professional ticketing software to anyone and everyone for free, which empowers event goers to become event organisers.

FIXR’s web and mobile platform allows consumers to book tickets, tables and guest list for events directly. Users can also book entry to invite only private events, such as house parties or university socials.

FIXR provides event organisers, large or small, with a tailored sales channel and allows them to take advantage of last minute bookings. Entry systems are also simplified with the FIXR Entry Manager App, which syncs automatically with consumer purchases, updating bookings in real time and allowing door staff to scan tickets at the point of entry. This complete data capture allows event organisers to understand customers and enhance their marketing strategy.

The ambition Having gained significant traction in the student event market, FIXR is focused on continuing to develop its product fit and establish itself as the primary platform through which students host and access events. The company’s growth plans include adding additional university markets, expanding into international territories and, as the current users graduate from student life, adding events aimed at young professionals.

Case study FIXR

“Most investors take a short term view but with The FSE Group you’re bringing on board a genuine partner who is with you for the long term and willing to follow their money.”Nick Stone CEO, FIXR

“My FSE mentor has proved something of an inspiration.

This support is invaluable.”

I hold huge value in our discussions and debates. He has given me confidence to

pursue initiatives which, had I not had such a mentor, I would have delayed and probably not pursued the strategies. He has absolutely

saved us time and money and helps our business stay focused.

It allows you to ‘give back’, using your experience to help those who

need it the most, when they feel they have no-one to talk to.

“The Mentoring programme from FSE is an exceptional opportunity for

successful business owners of the past or present to assist those currently

undergoing their business challenges.

If you ever felt that way when you were running your own business, here is your

chance to restore some balance.”

Lamia Walker Founder,

HouseSitMatch

Kash Bhagwat-Brown FSE Mentor

The FSE Group Impact Report 2016 1514 The FSE Group Impact Report 2016


say we are a straightforward

organisation to deal with.96%would recommend

The FSE Group. 96%

feel their relationship with us has contributed to the success of their business.93%

feel we provide a unique service.70%

believe their development would have been delayed or abandoned

without our assistance.80%

The enterprise Omega Ingredients is run by husband and wife team, Steve and Elizabeth Pearce, skilled biochemists who have built an innovative business delivering flavours, fragrances and ingredients to the food, drink and cosmetics industries. Their unique fusion of biochemistry with high quality, natural materials has established their reputation for excellence within the sector.

By providing a range of ‘off the shelf’ products alongside bespoke offerings developed hand in hand with their clients, Omega presents a complete service for companies seeking flavourings and fragrances for their merchandise.

The ambition As a supplier to many of the major players in the flavour and food and drink sectors, it is essential that Omega has the capacity to service the major contracts available to it. The company has spent time developing an extensive product range to meet its customers’ needs and is now looking to take full advantage of the opportunities this brings, both in the UK and overseas.

The funding Omega has received a total of £300,000 from the East of England Regional Growth Loan Scheme by way of three separate loans over the last seven years, allowing the company to invest in specialist skills, new property and equipment and extend their product offering. Finance East has also facilitated two New Anglia Growing Business Fund grants totalling £50,000 for further capital expenditure and fit out costs.

The impact Omega Ingredients’ ongoing relationship with The FSE Group has enabled its owners to achieve considerable growth whilst maintaining control, returning for further funding as the business outgrew its facilities and required further manpower. The loans have supported an almost tripling of the workforce to its current 17 and an accelerated expansion into international markets, particularly the US where the business is experiencing significant demand.

Case study Omega Ingredients

“We would not be the strong business we are today, now facing major growth, without the support of this organisation.”Elizabeth Pearce Director, Omega Ingredients

*Based on an average relationship of 34 months.

The result.

feel we are knowledgable of and

responsive to their business needs.96%

Our SME clients have experienced average employee growth of 50% and average turnover growth of

64% since working with us.*

The FSE Group Impact Report 2016 17


“With the impact of equity dilution in mind, we were keen to secure the required financing as a mix of equity and debt, albeit the conventional debt funding criteria of most lenders made this challenging. Whilst the due diligence leading up to the lending decision was thorough, the process was quick and straightforward. Since providing the initial loan, FSE have been very supportive and encouraging of our business. It’s refreshing to work with a funding partner that understands the challenges facing businesses going through significant, but at times hard to predict, growth.” Mike Williams Vigilant Applications

Borrowing money of any sorts is a daunting prospect and in business terms there always follows an arduous process. In the case of FSE we felt very much supported through the application process and help was on hand whenever we needed it from the team; indeed as a client we asked a lot of questions and these were all dealt with in a detailed and respectful way. Communication from the team at FSE has been clear and concise, and we have found a genuine interest in our business, its plans and its developments.” Nicola Bell Motion Simulation Room

“We have previously experienced a one size fits all approach with other finance providers which can be limiting but, with The FSE Group, there was a more flexible approach to structuring an investment deal that would work with a wider portfolio of investors. Our fund manager built rapport and trust with our management team from the outset. He spent a considerable amount of time really getting to know our business model and gaining a solid foundation of understanding. The way in which the whole deal process was conducted gave us confidence in the future and in the strength of the ongoing relationship with FSE.” Diane Burridge Moneyline

“We have found the FSE Group to be very professional, with very clear procedures and practices, and very flexible in supporting our ongoing business needs. At the time we received the loan we had low revenues and were pre-profit. A conventional bank would not have been interested in supporting us at that early stage. The FSE Group looked at the bigger picture, saw where we were going and were therefore prepared to provide the support we needed. For a small, high growth company seeking capital they should be on the top of the list of organisations to approach.” Dan Daly Lein Applied Diagnostics

“Our fund manager was very helpful in navigating us through the loan application and we felt FSE were prepared to understand our business and not just confine their due diligence to our ability to repay. It felt like they were investing in us rather than just lending us money to make a profit; FSE cares. With competitively priced finance, reasonable personal guarantee requirements and a willingness to consider complexities such as the requirements of existing lenders, as long as FSE are competitive and willing to lend to us, I can’t see why we’d go elsewhere.” Steve Swindon Basemap

“At a time when the bank wasn’t interested and just told me ‘don’t even bother filling out the forms’, my FSE fund manager was very responsive, professional, friendly and helpful. But at the same time he was straight, honest and challenging – something I hadn’t experienced with any other finance house but which made me feel he was genuinely interested. I have been used to a complete lack of communication, being kept at arm’s length by a faceless entity. I believe FSE saved my business; had it not been for this organisation I would have gone bust in year one.” Austin Bailey Lacka Foods

“Very quick, decisive and friendly, for up to £200,000 FSE is an ideal partner. This level of funding is very difficult to raise from traditional lenders or private equity players for small businesses. The FSE team are bright, committed and supportive in both the due diligence stage, deal doing and post transaction cooperation. The funding does not require the same level of security and bells and whistles demanded by traditional lenders and there are also no restrictive covenants, which allows complete flexibility for the owner to grow their business.” Jeremy Brassington Conversor

What our clients say.

“For a small, high growth company seeking capital FSE should be on the top of the list of organisations to approach.”

“It feels like a team effort and not a lender borrower relationship.”

“I had been using FSE mentoring services and, impressed with the professional service, explored the funding options available to me through Finance East (FE). The personal touch and the close working relationship, coupled with the experience in using funds for growth, should not be overlooked. I have found the staff across FSE and FE efficient, professional and caring – it feels like a team effort and not a lender borrower relationship. To anyone considering funding from The FSE Group I would say it’s not all about the funds; consider the full support package to realise your growth and return on investment.” Jagjit Singh In-Form Consult

“Our experience of dealing with The FSE Group has been fabulous – our fund manager has been highly supportive and incredibly helpful and FSE’s goals are aligned with those of existing shareholders and our management team. Dealing with FSE has been collaborative, particularly during the due diligence process. There were no ‘hiddens’ within the legals or term sheet, providing a much more transparent experience. With FSE it is definitely not just about the money. Start-ups tend to be ultra-focused on their own market; FSE have a wider view of trends etc. that can help expose opportunities and drive operational efficiencies in the business.” Andrew Carroll YOCUDA

“The FSE Group has a genuine willingness to back early-stage companies and fund their initial growth at a time when many equity funders are not interested. Furthermore the wider support helps the company in more ways than simply providing money. Our fund manager is responsive and always available to discuss any issues we might have. Most investors take a short term view but with The FSE Group you’re bringing on board a genuine partner who is with you for the long term and willing to follow their money.” Nick Stone FIXR

“Finance East has been an instrumental partner in building the solid foundations for our long term growth. They were able to see the potential of our business at a time when conventional funders were extremely risk averse. As with any growth phase, there have been bumpy times, but Finance East understood; some funders would have pulled the rug at the first sign of difficulties. We would not be the strong business we are today, now facing major growth based on these foundations, without the support of this organisation.” Elizabeth Pearce Omega Ingredients

“Our experience with traditional lenders was that they would say they would/could lend to us but the decision makers were three to four levels removed from us hence our application would fail for reasons that would never be clearly explained. By contrast, working with FSE was a pleasure. We had a clear understanding of the process with our questions answered clearly and in a timely manner. We felt that FSE cared and actually wanted to lend us money. We also felt that the people we dealt with were empowered to make decisions and recommendations that would influence the success of our application.” MC Patel Emotion Systems

“From the off we felt a genuine interest in our business from The FSE Group. With our bank we are, by and large, just another small customer. It didn’t seem worth going through a lengthy application when the likelihood of success was pretty low. But with The FSE Group, the application process itself was really valuable – it helped us focus on what was important for the growth of the business and, even without the funding, this was so useful. Being a smaller organisation, FSE is quick and easy to work with, but still well connected to local business support systems. They have provided rounded support over and above the loan itself.” Chris Buchanan Chillistick

“The FSE Group has been a vital supporter to iAbra at two important phases of our evolution. Having an institutional investor of such credibility has helped us enormously with attracting both additional angel and corporate investors. FSE has been invaluable in many aspects of our growing enterprise.” Ian Taylor iAbra



Our partners.

D e f i n i n g t h e f u t u r e

HertfordshireLocal Enterprise Partnership


FSE C.I.C. Riverside House4 Meadows Business ParkStation ApproachBlackwaterCamberleyGU17 9AB

01276 608510 [email protected]

www.thefsegroup.com

Finance East LtdUnit 1Basepoint Business Centre70-72 The HavensRansomes EuroparkIpswichIP3 9SJ

01473 [email protected]

FRONT COVER - TITLE Transformative Funding - LOGO … · Equity instruments, mezzanine, loans,...

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