Enterprise Ireland- 3rdApril2013

EntrepreneurshipHow and when to approach Investors.

George Kiely

Enterprise Ireland

UCD - Innovation Academy

3rd April 2013

Enterprise Ireland

Enterprise Ireland is the Government agency in Ireland responsible for supporting Irish businesses in the manufacturing and internationally traded service sectors. Specifically, Enterprise Ireland helps businesses to start-up, innovate and ultimately, to achieve global success.

Introduction

Working with entrepreneurs, EI and national programmes for entrepreneurship.

View circa 1500 business propositions and business plans each year

Meet with circa 500 entrepreneurs/ teams each year to evaluate, challenge and advise new start-up companies

Design, deliver and manage Start-up programmes for High Potential Start-Ups

Review wide range of business ideas of all shapes and sizes to make investor ready.

What I will cover …

Enterprise Ireland and the types of Start-up businesses EI supports

The importance of a Robust Investor Ready Business Plan

Indicators for Success (what we are looking for)

Common mistakes

Raising Funding – Sources of Funding for Start-Ups

Projects EI invests in

Eligibility Criteria

Manufacturing or internationally traded services

Likely to achieve significant growth within 3 yearsSales of €1m per annum Employment of at least 10 people

Export orientated

Involving industry experienced team

Irish owned or strategically controlled and located in Ireland

High level of technical innovation

Projects EI cannot invest inNOT Eligible

No export potential i.e. customers will be based in Ireland

No growth potential

The main promoters / strategic decision making is not based in Ireland

IP is not registered with an Irish company

Importing products to sell in Ireland

Not innovative – many competitors

Graduated EI assistance

1) Starting a Business: Enterprise Start 1(ES1)

2) Validating the Business Idea: ES2 or EI one to one’s.

3) Incubation and Interim Funding

IOT’s / New Frontiers Programme

4) Raising Substantial Investment :

EI High Potential Start Up HPSU.

HPSU – High Performance Start - up High Performance Start Up (HPSU). Competitive. Three part finance. Promoter/VC/EI. 10 employees/1 million euros. Full assistance

- Overseas Office

- Industry Experts

- Mentors

- Personalised Expert Advice

New Frontiers Programme Entrepreneurship Development in Incubation Centres IOT’s

Candidates and projects must have potential to grow in international scale.

Three phases / competitive. Phase1 - 8 weeks. Phase 2 - 6 months

Scholarship of 15K

Sources of Finance

� Entrepreneurs, Relatives and Friends

» Seed Capital Scheme/BES

� Debt» Bank loans, overdrafts, invoice

discounting

� Venture Capital

� Private Investors» Wealthy individuals –

» Cashed out entrepreneurs» Business angels

» BES

� Development Agencies» Feasibility Study grants» R&D grants

» Employment grants

» Preference shares

EI Innovation Voucher

Innovation Voucher

If you own or manage a small limited company with a company registration number and you have a business opportunity or problem that you want to explore - apply for an Innovation Voucher.

What is a Business Plan ? Detailed roadmap with company’s offer, plans and strategy/costs for

implementation

Necessary to raise funding from a 3rd party - bank, government agency, private investor, VC funds

Clear, well researched document that answers all the common questions that you should know and that an investor will want to know

It is not a creative writing exercise, a graphic design showcase or exhibition on excel sheet modelling

Who is the Business Plan For?

You the entrepreneur – plan the work and work the plan

For potential investors (Public and Private)

For your bank manager

For your staff – new members joining to company

Note: All different Audiences – may need different versions, may need NDA.

Investor Ready Business Plan

A Business Plan but not an Investor Ready Business Plan

We encourage entrepreneurs to think more about getting Investor

ready – i.e. “what information/evidence do I need to convince investors to part with their money

If you can do this - finance will follow

Investor Ready Business Plan – Content?

Plans should give information and detail about the entrepreneur and the business that de-risks the business in the view of potential investors

or

more simply put - adds credible evidence as to the likely success of the business

Common mistakes Value proposition is not clearly defined. Technically brilliant product

but does it deliver VALUE to the customer?

Inability to identify and qualify the customer.

“Our product has no competitors” !

Unbelievable numbers (revenue projections and costs).

Unrealistic expectations on raising cash (time needed and valuations). It will take 3-6 months. Plan conservatively.

Verbiage / inelegance

Common mistakes Inability to identify clear – and achievable – milestones.

‘Unbalanced’ Management team – dominance commercially/technically?

Inability to plan for contingencies (they will happen !!).

Important considerations 1. Competition. Where are you in relation to your competition?

2. What is different about your product or service? “Uniqueness?”

3. Elevator pitch. 10 seconds. Brutal assessment.

4. Brand. Competitive matrix.

5. Who is selling it? Emotional intelligence supported by research.

6. Technology is a given unless…….what is does for whom and better/ cheaper/ more effectively.

7. Innovation is not just technology but business model for example.

Commercial Environment - Interdisciplinary Best creative business people - classicists, natural scientists,

philosophers.

Most successful ICT entrepreneurs – non technical.

Successful businesses projects have valuable combinations of skills.

Interdependence

- the project itself

- the promoter.

Impact

Advice more important than Funding

County Enterprise Boards

Throughout REGIONS and DUBLIN

Businesses employing less than ten

Transition to EI HPSU

Close collaboration with EI – incorporated within EI

EI on boards

‘Organic’ rather than ‘scale’ growth

The Future

Recessions

Extraordinary talent.

Non - economic factors

Commercial significance of International Good Will.

Contact George Kiely

[email protected]

01 7272329