How to Attract Investors Fifth Annual Conference of the Technopolicy Network. Halifax, Nova Scotia,...
-
Upload
justin-marshall -
Category
Documents
-
view
218 -
download
3
Transcript of How to Attract Investors Fifth Annual Conference of the Technopolicy Network. Halifax, Nova Scotia,...
How to Attract InvestorsHow to Attract Investors
Fifth Annual Conference of the Technopolicy Network. Halifax, Nova Scotia, Canada
September 2008
“Show Me the MONEY !$$$$!”
Professor Alan Barrell
Attracting Investors - Some Issues….There will be more….
WHO – might be the investors? Types and motivations
Knowing their Goals and Criteria Innovative Regions and Sub-Regions - special
conditions “Investment Readiness” – A big issue…. Preparation, Support and Presentation What do Investors look for? How to find out? Connecting with Investors – importance of
Networking The “rock and hard place” of Valuation The issues of “Matching” – it isn’t just the money!
What else do we get ? The Investment Climate !!!!
Would you invest in this team ?
What DO Investors look for ?
Microsoft Corporation, 1978
When a market “BOOMS” - Venture Capital Investments in E-Commerce (U.S.A.) “When Greed
overcame Fear”. We are still recovering in the aftermath….
Source: Venture Economics
Netscape IPONetscape IPO33rdrd largest in largest inNasdaq HistoryNasdaq History
Amazon.com IPOAmazon.com IPO
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
To
tal I
nv
est
ed (
$ m
illio
n)
Stay Cool!Stay Cool!
Dilbert - Scott Adams
Stay Cool!Stay Cool!
Dilbert - Scott Adams
Stay Cool!Stay Cool!
Dilbert - Scott Adams
“You look at things and ask - why?
but I dream of things that never
were and ask -
George Bernard Shaw
why not?”
What do investors look for in an Entrepreneur ?Entrepreneur ?
And they look for “change agents”
Joseph Schumpeter (1911)
“Entrepreneurs blow gales of creative destruction.”
Role of the entrepreneur in transforming economies by developing:
New products New methods of production New ways of organizing Untapped raw materials Enhanced competitive performance
What else do investors like to see?....
Einstein on IMAGINATION….
“Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world”
Albert Einstein 1879 - 1955
Do investors really like Risk ?
If at first you don’t succeed….try again….but learn from the mistakes! Can RISK be eliminated ?
Continuous Technology Revolution “Survival of the Fastest”astest”
Compared to an average DAY in 2003….
All international phone calls1971
All airline passengers1975
All mobile phones 1984
All emails 1992
All SMS1998
Source: Analysys, World Bank and ITU
Three Converging RevolutionsThree Pervasive Technology Platforms – connecting
and networking across boundaries
BIO TECHPharmaceuticals
DiagnosticsResearch/Info
ToolsIndustrial
GenomicsBioinformatics
Proteomics
INFO TECHHardwareSoftware
Communications
NANO TECHElectricalStructural
BiomedicalEnergy & Environment
BiosensorsBiochipsBioelectronics
MicrofluidicsNanobiotechnology
Drug Delivery
NanodevicesNanosensors
Nanoelectronics
Universities and centres of academic excellence Entrepreneurs with marketable ideas and products
Business angels and established seed funds
Sources of early stage venture capital
Core of successful large companies
Quality management teams and talent
Supportive infrastructure
Affordable space for growing businesses
Access to capital markets
Attractive living environment and accommodation
Social and Business Networks - Connectivity
source :- Gibbons - Stanford University 1998
Characteristics for High Technology Regions – and potential for talent and $$$$
to meet
Sources Of Business Finance – A Reminder
Maturity
Risk
“Our Money”“Our Money”
Family and Friends and FoolsFamily and Friends and Fools
Business AngelsBusiness Angels
Early Stage VCEarly Stage VC
Expansion CapitalExpansion Capital
B
A
N
K
F
I
N
A
N
C
E
??
Seed FundsSeed Funds
Pre-IPOPre-IPO
“Softer Money” – Grants etc – they are investors….investors….
A World of its own Can be a deep well Can be bureaucratic and “rule ridden” Finding and getting it can require art, skill and
patience – different from equity investing mentality
Understanding the processes and the motivations of grant givers. Connecting….
Excellent Example – UK R and D Grants Tax Credits and similar schemes
“Show Me The Money!”- More Questions for Entrepreneurs
Basics – Investment Readiness How organised are we ? Company structure ? Management Team? Intellectual Property? Vision, Purpose,Plans and Positioning Ideas? Advisors ? “Greyhairs and Wisdom” ? Basics –
eg Accounts and Controls ? “Rumsfeld Questions” – “What we DON’T
know?”
The Early Stage Business Balance – what do investors look for? Do the
entrepreneurs know ?
The role of Chairman and NXDs
Inspired Leadership
Enthusiasm
Bullshit
Courage
OptimismVision
Creativity
Management
Research & Analysis
Caution
Process
Financial Control
Market Knowledge
Valuation – how and why? – Destroying the myths – “Valuations to die for….”
Why do we need it ? -To indicate value to potential investors
What is a company worth?
- What someone will pay for it What is this determined by?
- Other investment choices
(there are usually MANY !)
Connecting Investors to Entrepreneurs
Two Way Experiences in “The Cambridge Cluster and an
Enlightened Europe”
From – “Poacher and Gamekeeper “….
Alan Barrell
Entrepreneur in Residence – University of Cambridge
How and Where do Investors and Entrepreneurs How and Where do Investors and Entrepreneurs find each other and get connected ??find each other and get connected ??
Cambridge
source: Cambridge 2020 report - 1998
But I work in The East of England Region – and in France
Map of Silicon Valley inset
Ramsey Chatteris Littleport
Mildenhall
Bury St Edmunds
Haverhill
Saffron WaldenRoyston
St Neots
Huntingdon
HUNTINGDONSHIRE
SOUTH CAMBRIDGESHIRE
CAMBRIDGE
NORTH HERTFORDSHIRE(PART)
ST EDMUNDSBURY(PART)
FOREST HEATH(PART)
EAST CAMBRIDGESHIRE
FENLAND(PART)A
1(M)
A14
M1
1A14
A10
A14
A11
A11
A10
UTTLESFORD(PART)
A10
A1
Greater Cambridge Partnership Area –one of nine “Sub-regional Development Partnerships”
2001 GC EstimatesPopulation: 635,000
Jobs: 359,000GVA: £12.2bn
Trinity College’s History and Scientific Development – Cambridge – Science, Innovation and Invention
Trinity always had a strong scientific tradition*
First use of the word “scientist” 1835 (Whewell)
First European Science Park – 1970 – Dr Sir John Bradfield
*Alumni include Newton, Clerk-Maxwell, Rayleigh, Thomson, Walton, Rutherford, Aston, Lyle, both Braggs, Bohr, Hopkins, Klug, Kendrew
Cambridge University
1960
1970
MRC Laboratory
of Molecular Biology
CADCentre
Sinclair Radionics
CCL
Barclays Bank
1980
Cambridge Interactive
System
Cambridge Science Park
Acorn
PA Technology
Eicon Research
Ltd
Sinclair Research Ltd
1990
Analysys
Olivetti Research Laboratory
(acquired by AT&T in 1999) Judge Institute of
Management Studies
St. John Innovation
Centre
Scientific Generics
The Technology Partnership
TTP
Cambridge Research and Innovation Ltd (CRIL)
Institute of Biotechnolog
y
Cantab Pharmaceuticals
Hitachi Cambridge Laboratory
Nickerson Biotech
Laboratory
Glaxo
2000
Toshiba Cambridge Research
Laboratory
Seiko Epson Research
Lab
Unilever Cambridge Centre for Molecular
InformaticsCambridge
Network
Institute of Manufacturing
Amadeus Capital Partners
TTP Ventures
Entropic Research Laboratory (acquired by Microsoft in 1999)
Glaxo Institute of Applied
Pharmacology
BP
The emergence of high-technology clusters in Greater Cambridge
1971 1981 1991 2001 The future?
ScientificInstruments
Nanomaterials
Drugs delivery
Sensors/actuators
Informatics
Instrumentation
Medical engineering
LEPs
Drug modelling
Bluetooth
Sentient computing
Telecoms
Industrial inkjet
Biosciences
Computing
Software
ScientificInstruments
Wirelesscommunications
Telecoms
Industrial inkjet
Computing
Biosciences
Software
ScientificInstruments
Hi-tech 20,200 25,100 34,900 46,200jobs:
Computing
Software
ScientificInstruments
Industrial inkjet
1971 1981 1991 2001 The future?
ScientificInstruments
Nanomaterials
Drugs delivery
Sensors/actuators
Informatics
Instrumentation
Medical engineering
LEPs
Drug modelling
Bluetooth
Sentient computing
Telecoms
Industrial inkjet
Biosciences
Computing
Software
ScientificInstruments
Telecoms
Industrial inkjet
Biosciences
Computing
Software
ScientificInstruments
Wirelesscommunications
Telecoms
Industrial inkjet
Computing
Biosciences
Software
ScientificInstruments
Wirelesscommunications
Telecoms
Industrial inkjet
Computing
Biosciences
Software
ScientificInstruments
Hi-tech 20,200 25,100 34,900 46,200jobs:
Computing
Software
ScientificInstruments
Industrial inkjet
Computing
Software
ScientificInstruments
Industrial inkjet
50,000
Cambridge Venture Capital Scene – Estimated total value of funds: in excess of £1.5 billions
And then there were the Angels….
A Financial Cluster follows The Technology Cluster at “boom time”
- UK and Europe
- Cambridge Region only- UK only
Less than £1.0 million
More than £3.0 million
INVESTMENT SIZE
CRIL Generics Prelude 3i
ICT
Life Sciences Avlar
FNIVenture Capital
Merlin
Amadeus
PrimeTechnologyVentures
Pall MallVentures
Alta Berkeley
ETCapital
SiemensVC
Abingworth
CreateVentures
CambridgeGateway
TTPVentures
Connecting and Information Points and principles
Networks and Networking – importance +++++ Business Schools and Entrepreneurship
Centres Region wide and cross border Other Entrepreneurs / Support and Mentoring
Structures Online Channels – numerous eg….
www.funded.com “Network Nodes” – Individual referrals Cross Border contacts Attitudes and Culture
Thinking Of Angels! – we keep referring to them !
US Angels – The REAL early stage funders !
In 2000 US business Angels invested more than $200billions in early stage companies
This was much more than the so called “venture capital industry” which did not reach investment levels that year of $150 billions.
In the difficult year of 2002 – when VCS “sat on hands” – Cambridge Angels kept the early stage and emerging business sector alive and well
Cambridge Angels are adopting the US success model and working more closely together.
“Syndication Nodes” and Business Angels – Connecting in and from Cambridge
Cambridge has four active Angel Groups – Cambridge Angels, Cambridge Capital Group, Equus, G.Eastern Investment Forum
MOUs and Syndication with- Other UK Angels, Sophia Angels ( France) Luxembourg BAN, B.A.of Slovenia,US Angels Networked with all known, useful VCs and Grant bodies
Joint events, Deal and Portfolio Sharing Common Network and Portfolio Management -
Angelsoft Keeping well informed – eg. French Wealth Tax
changes – Transformational impact. Strong International VC connections
The Business Angels we help Entrepreneurs look for….Cambridge Mentors Database
Technical Expertise Marketing Expertise Contacts & Networks Decision Making skills Presentation skills Dealmaking skills Money-raising skills Other Financial skills Possible exit routes and practical help
with exit – international focus
7
Those who bring addedvalue – in one or all of….
Our Centre for Entrepreneurial Learning – Investment Readiness and Connectivity Plus….
History:
1999 - Cambridge Entrepreneurship Centre (CEC)
2003 – Centre for Entrepreneurial Learning (CfEL)
CfEL Core Activities:
To develop a portfolio of courses that inspire, and enable the start-up and growth of ventures
To respond to the needs of students, Departments and Colleges within the University of Cambridge
To share best practice with the wider community through networks and collaboration
To build a great team of teachers To deliver excellence and investment readiness Helping develop the Spirit of Enterprise!
CfEL’s Entrepreneurs in Residence
Alan Barrell Library House
Phil O’ Donovan Camrivox
Alex van Someren
nCipher
Jack Lang Serial
Entrepreneur
Dan Roach Avlar Bioventures
Ann Cotton Camfed International
John SnyderGrapeshot
Richard Green Ubisense
Walter de BrouwerFounder
of Starlab
CfEL’s Programmes CfEL’s Programmes allall connect with investorsconnect with investors
Senior Managers’Programme
How to develop and grow companies
Summer School‘Fast Tracking
Innovation to Commercial Success’
I’m a Corporate Intrapreneur or Entrepreneurial Manager
I’m a Solo Entrepreneur with a technology idea
Summer Forum
I’m an entrepreneur or an entrepreneurial academic
EnterprisersI’m a student
Enterprise Tuesday(Term 2)
Enterprise Tuesday(Term 1)
I’m a student or member of staff or local entrepreneurial individual
Undergraduate and Postgraduate Assessed Programmes
I’m a CU student and want Entrepreneurship as part of my degree
How to teach entrepreneurship
How to survive and grow in the early stages
How to get my idea started
Some new knowledge and skills in business planning
What entrepreneurship is all about
I want to learn...
Senior Managers’Programme
How to develop and grow companies
Summer School‘Fast Tracking
Innovation to Commercial Success’
I’m a Corporate Intrapreneur or Entrepreneurial Manager
I’m a Solo Entrepreneur with a technology idea
Summer Forum
I’m an entrepreneur or an entrepreneurial academic
EnterprisersI’m a student
Enterprise Tuesday(Term 2)
Enterprise Tuesday(Term 1)
I’m a student or member of staff or local entrepreneurial individual
Undergraduate and Postgraduate Assessed Programmes
I’m a CU student and want Entrepreneurship as part of my degree
How to teach entrepreneurship
How to survive and grow in the early stages
How to get my idea started
Some new knowledge and skills in business planning
What entrepreneurship is all about
I want to learn...
• A FREE evening programme open to students, staff and the business community
• Lectures on Tuesday evenings from 6pm
• About 1500 attended in 2006/07, coming from 50 different departments within the University of Cambridge, 10 other Universities and 100+ private businesses
• Close links to Cambridge University Entrepreneurs (CUE) Business Plan Competitions
• Investor Connections ++++ from UK and Overseas
• Has been copied extensively – QinetiQ; Oxford; Bedford; Essex; Sussex; UEA; France; Luxembourg; Baltic States; Auckland; Canada; Australia etc.,
Helping Entrepreneurs turn Ideas into Reality and find sources of finance….developing as a community….
Developing “Enterprisers”Developing “Enterprisers” An intensive four day residential
programme for energetic individuals, from any organisation, background or discipline .Connecting, Networking and Learning.
Focus on developing fundamental entrepreneurial skills
Networking opportunity – investors attend
Run by facilitators, Enterprisers alumni and faculty members from universities
Unlocks creativity, confidence and a ‘can do’ attitude