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The Regional Landscape: Seedcorn Funding
www.finance-yorkshire.com
Agenda
• Seedcorn Finance generally
• FY Seedcorn Fund
• Other Seedcorn Funding sources
www.finance-yorkshire.com
Seedcorn Funding
• Our definition:LSE: “The financing of the development of a business concept. High risk;
usually provided by venture capitalists, entrepreneurs or business angels..”
• Characteristics•Highest risk class of investment
•Possibility of great returns
•Massive and constant change required
www.finance-yorkshire.com
Finance Yorkshire Three new funds...
• Seedcorn Finance (up to £780k) £15m
• Business Loans (£15k – 150k) £27m
• Equity Linked Finance (£100k - £2m) £48m
www.finance-yorkshire.com
Seedcorn Finance Objectives
www.finance-yorkshire.com
• Yorkshire potential
• Impact of “Beacon Companies”
• Challenge- 10-15 Potential Beacon Companies
• Importance of Legacy
Seedcorn Finance Investment Characteristics
www.finance-yorkshire.com
• Some investments start with £50k-£780k• Usually spread over tranches/rounds
• Investments of £2m+ when syndicating with other funds
• Fast (3.5 yr fund)
– Self sustainable companies in 2-3 yrs
– Exit in 3-5 yrs
Seedcorn Finance Target investments
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• Pre-revenue or early-revenue
• “Huge” market opportunity
• Competitor barriers at exit
– Patents, Data lock-in, Approvals etc.
• Management open to “change and growth”
Seedcorn Finance What it isn’t...
www.finance-yorkshire.com
• Not grant money- investment for financial return
• Not easy to get- (best 1-2%)
• Not project finance- companies must be “exitable”
• Not sales roll-out funding- other funds...
• Not a bank loan
• Not a purely financial transaction
• Not a “content” fund...
Seedcorn Finance: Case Study
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• Vidiactive Ltd
• Universal web video viewer for TV’s
• Portal/server system for content management and sharing
Seedcorn Finance: Case Study 2
www.finance-yorkshire.com
• Invested at prototype stage- universal web video viewer for TVs
• £50k first investment to explore the opportunity
• Helped recruit team (Chairman, CEO, CTO, etc.)
• Invested from 2 funds- £1.4m total to date
• Good progress- Intel, Orange, Vodafone, Cisco etc.
Seedcorn Finance Other funding sources: Direct
www.finance-yorkshire.com
• You, Friends and Family
• 4IP, Nesta, Pembridge, Ingenious Media
• Other VC’s (see www.bvca.co.uk)
• Grant for Research and Development
• University-related Funding
• Business Link innovation schemes
• Banks (very very rarely without PG’s!)
• Specialist content funds in NE and NW
Seedcorn Finance Other funding sources: Indirect
www.finance-yorkshire.com
• Connect Yorkshire
• Yorkshire Association of Business Angels
• Business Link Access to Finance advisors
Summary
www.finance-yorkshire.com
• Seedcorn Funding is hard (harder still for content plays)
• FY Seedcorn fund is a first step for the region, but not a panacea
• Lots of sources of help- allow plenty of time to raise money
