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.
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