finance for business middlesbrough presentation

2010Middlesbrough Institute of Modern Art 22nd June 2010

A New Identity

You might have picked up on the press coverage for the NE JEREMIE venture capital fund…..this will now be known as…..

Finance for Business North East

Finance for Business North EastKey Features

• £125m fund (£62.50m EIB; £62.50m ERDF / ONE)

• One North East / ERDF covering fund management costs

• Private Sector model

• 2 Company Structure:

• Holding Fund Company• Legacy Fund Company

• Fund of Funds:

• Expected to be 7 Funds• Continuum of Finance• Flexibility

Objectives

• Investment in circa 850 SMEs

• 5,000+ jobs

• Generate significant co-investment

• Wider impact in marketplace

• £100m Legacy Fund

• Relationship with European Investment Bank

• Financial and economic development returns

Finance for Business North East - What’s New?

• Scale & ambition - £125m of capital over five years

• Holistic and coherent response to equity gap for high growth businesses in the region

• Deliberately introducing real choice for businesses seeking venture capital in the Region

• Prospect of significant legacy returns to support future VC provision in region over very long term

Finance for Business North East - What’s New?

• First of its kind in the English regions

• Engagement of major multinational partners:-

• European Investment Bank – Triple A* rated institution• EIF – largest investor in early stage VC in EU

• High calibre Investment Advisory Board (including 2 x former chairs of British Venture Capital Association)

• Step-change in regional fund management capacity

• Existing providers (North Star Equity Investors & NEL)

• New entrants (IP Group, FW Capital & Rivers Capital Partners)

What Finance for Business North East is not!

• These are investment funds not grant schemes – the managers are looking for a capital return on their investment

• They are not suitable for all businesses – talk to your accountant, lawyer or to Business Link (BENE) if you need advice

• The evaluation and due diligence process will be comprehensive and thorough so things won’t happen overnight

• The funds are there to support long-term future growth - the money cannot be used to rescue difficult situations

• The eligibility rules can appear complex but generally exclude very few small businesses – if in doubt talk to the fund managers!

What does this mean to you?

• Competition and choice on your doorstep

• The most dynamic early-stage VC market outside London

• Access to specialist investors with expertise in all sectors and development phases

• New channels to global investors and capital markets

• Availability of VC for the right opportunities through to 2015

• Exciting opportunities for business angels and other co-investors

Finance for Business North East Funds

The Funds

• North East Technology Fund

• £25m fund

• Focussed on technology

• Investing up to £1.25m – mainly equity

• Managed by IP Group

• North East Proof of Concept Fund

• £15m fund

• Primarily technology

• Very early-stage start-ups and projects – investing £20-150k

• Managed by Northstar Ventures

The Funds

• North East Accelerator Fund• £20m fund - all eligible business sectors• Early-stage businesses with high growth potential• Typical investment range £200-750k• Managed by Northstar Ventures

• North East Growth Fund• £20m fund – all eligible business sectors• Established businesses requiring development capital• Typical investment £150-200k – mezzanine & equity• Managed by NEL Fund Managers

The Funds

• North East Growth Plus Fund• £20m fund – all eligible business sectors• Established businesses requiring larger sums of development capital• Typically investing £500k – maximum £1.25m • Managed by FW Capital

• North East Angel Fund• £7.5m fund – all eligible sectors• Start-ups and early-stage businesses• Focus on working with business angels • Typically £50-150k• Managed by Rivers Capital Partners

Managed by IP Group£25m fund

Focussed on technology

Managed by Rivers Capital Partners£7.5 fund – all eligible sectors

Start-ups and early stage businesses

Managed by Northstar Ventures£15m fund – primarily technology

Very early-stage start-ups

NEL Fund Managers£20m fund - all eligible business

sectorsEstablished businesses requiring

development capital

Managed by FW Capital£20m fund – all eligible business

sectorsStart-ups and early stage businesses

Managed by Northstar Ventures £20m fund – all eligible business

sectorsEarly stage business with high growth

potential