Tag Archives: investment readiness

Time for a change?

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Ah, I get it now; there were more people who did not want to see my friend’s band than did! The ‘out of comfort zone ‘ was too much, then risk too great. I understand, nothing ventured and all that. Risk profile too high; however exposure to risk varies greatly depending on which hilltop you reside.

It surprises me the way we humans fail to learn from past models that have been unsuccessful; it is as if we are paralysed or fearful of trying something new, getting it wrong or getting fired. Given that shareholder value remains the key objective with great exits playing a huge part in this, indeed the primary objective; why aren’t more investor funds exploring alternatives, why are they not seeking out ways to reverse current trends, why are they not actively seeking ways to change their approach?

It turns out that some are. Since my last announcement it looks like we will be nearer 14X ROI if we close the current fundraising. We are now being contacted by funds and fund managers asking to how we achieved such returns particularly in such a poor economic climate and inquiring as to how we might work together. We welcome this; we want relationships with investors like the Carbon Trust, where we can add value in this level either as partners in JV’s or partnerships.

Therefore if you are seeking to attract and raise additional funds or have portfolio investments that need to get to revenue; we offer a proven approach and successful track record that offers a significant differentiator; indeed if you have companies that really need accelerating to unlock the value, or indeed if you wish to know if they won’t, then again we would be happy to talk to you about how we can assist.

We work in various ways: a strategy to scale programme; time and expertise for equity models; new innovative approaches to qualify commercial viability; generation of quality deal flow; IP FTO diligence; outsourced sales channel capability; understanding and control of the commercial process; or even to be your commercial expert on the board. We have proven our value through our approach in hundreds of early stage companies over the last ten years. We pride ourselves on a great value proposition that offers an inside track into deal flow and a clear route to maximise exit strategies.

It is a combination of these approaches and in working with fund and portfolio managers that have enabled us to deliver such a significant ROI.

Please call 01235 831777 or email info@conduitpartners.co.uk to discuss how your fund or your portfolio companies can benefit from our experience and approach.

Conduit Partners Deliver 11:1 Return on Investment

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Conduit Partners are delighted to have our contract with the Carbon Trust extended for a further two years, this follows on from an extremely successful three years whereby Conduit have delivered and 11:1 ratio return on their investment in our services to the Carbon Trust. During this period the Carbon Trust has build renowned reputation as the premier support service of choice devoted to low carbon entrepreneurs and, as such, Conduit demonstrated exceptional expertise and experience to be selected as one of a small number of preferred suppliers.

The services provided, delivered and managed by Conduit to 30 companies included:

  • Understanding Market Opportunities
  • Supporting Patenting and Intellectual Property Policies
  • Finding Customers and Partners, and Assistance in Negotiations with them
  • Securing Sales and Building Pipeline
  • Providing Interim Management and Mentoring
  • Building the Case to Attract External Investment, and making introductions to Investors
  • Supporting Companies to Define and Refine their Business Strategy
  • Teambuilding
  • Venture Due Diligence
  • Research and Development Grant Project Appraisals, Mentoring and Project Management.
  • Fundraising

Conduit also provided Carbon Trust client companies with valuable insights into technology commercialisation and venture business development and made a material difference to the success of some of the UK’s most innovative clean tech ideas through the Carbon Trust relationship. Conduit engaged directly with venture teams and industry and have a “hands-on” approach that enables us to deliver practical solutions and resolve complex problems; we have proven that this approach  adds much more value than purely providing generic advice. The Carbon Trust benefitted from our ten years of experience and found it particularly useful that we were able  to communicate and work equally well at board and senior management level as well as with technical, sales and operational teams. They found us effective at tackling difficult situations in which conflicts or tensions are present. The Carbon Trust held regular formal KPI performance reviews and Conduit consistently came out a top-rated, high quality supplier.

The success of these services can be judged by the success of the companies supported. Conduit was involved in over 30 Carbon Trust early stage companies, which subsequently leveraged £11.1m of external funding or direct sales revenue. These figures made Carbon Trust the most successful low carbon entrepreneur support service in Europe, a result which was to a very large extent due to the direct support to entrepreneurs provided by Conduit, and one of which we are extremely proud of being involved in.

I have been showing anyone who would take notice the NESTA figures proving that expert support intervention delivered in the early stage of a companies gets them to revenue quicker and builds valuation. The returns on this early investment by a ratio of 6:1 (NESTA FIGURES) these latest Carbon trust figures go to further prove that experienced focused and dedicated expert intervention, working closely with management teams, stake holders and investors delivers nearly double that return and helps significantly mitigate risk. Whilst many investors believe they can do this themselves or leave it to the management team, we, having proven this, believe that if that were the case fewer portfolio companies would be needing follow on money today.

Is anyone taking notice?

Technology startups: what you need to know before approaching investors

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There’s a buzz about Britain and the future of its technology, especially with the news that Google is to provide office space and assistance to new technology companies in London’s so-called ‘Silicon Roundabout’. The ambitions for this area are grand, with David Cameron declaring that he wants to make it easier for new firms to flourish.

It seems there’s never been a better time to launch a technology start up. However, in reality there is a whole lot more to it than dreaming up a cracking new idea, finding investors to back it, taking it to market, selling it on and making millions.

Technology investments normally take longer to show a return on investment, as new technologies are often disruptive and take more time to become adopted.

Due diligence in this sector has become more rigorous over the last five years. The process of ensuring your business meets all the criteria and convincing investors that it can indeed show a return is harder than ever.

Conduit Partners have been advisers to some of the UK’s largest IP generators and investment funds. We specialise in working in the technology sector and are skilled in making sure early-stage businesses can unlock the value in their business or raise the investment to get them there.

Positioning technology, which is often complex in nature, is not straightforward. Knowing where the technology sits in the value chain and having the value proposition worked out is essential to simplifying the pitch and creating a compelling argument for investors.

Our unique and proven approach ensures that new technology entrepreneurs set realistic and defendable expectations before approaching our extensive database of investors.

To tap into our expertise and help ready your technology start-up for investment, call 01235 831777. We are recruiting right now for entrepreneurs to join the Carbon Trust Entrepreneurs Fast Track programme.

 

Why entrepreneurs need support, not sarcasm

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Investors with a wealth of experience often intimidate would-be entrepreneurs. They’ve been there and done it, have several multi-million pound companies under their belt, and ultimately have power over the fate of a fledgling business.

Successful investors know that the stress and pressure of building a business is enormous. They need to be sure that the entrepreneur has the resilience to go the distance, and won’t fade or fall over. They also have to check that the entrepreneurs their eyes open to the fact that there are no get-rich-quick schemes, and no “this time tomorrow, Rodney, we’ll be millionaires” moments.

If a business idea sounds too good to be true, it usually is. By way of example, we evaluate numerous new low-carbon technologies on behalf of the Carbon Trust, many of which are truly amazing. However, few make it through. Often the reason is down to underestimating how long it will take to realise revenue and take these ideas to market.

Except when we give feedback to these new businesses, we do it with support, not sarcasm. We’re not like the investors on Dragons’ Den, who are capable of bringing some entrepreneurs to tears. We offer constructive, valuable input that is the culmination of hundreds of investments we’ve been involved with.

Our role is provided and paid for by the Carbon Trust for successful applicants. We work intensively with successful applicants to ensure they are investment or market ready in the shortest time with the minimum risk.

We are keen to hear from companies that could benefit from our extensive commercial experience via the Carbon Trust Entrepreneurs Fast Track programme.

If you believe you could benefit from our expert services and would like to apply for the Carbon Trust programme, email susandunstall@conduitpartners.co.uk with an outline of your idea and we will call you back.

The Psychology of Investment: Keep Emotions Out of It

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I believe that passion has a pivotal part to play in fuelling and sustaining your business – and don’t accept what the Dragons have to say about passion not producing profit. Without passion, you won’t get your idea off the ground, you won’t have that ‘buzz’ that gets you bouncing out of bed in the morning, and you won’t have the inner conviction that cushions the knock backs along the way.

But when I say passion I mean that drive, excitement and inner belief of knowing that you’re bringing an unbeatable idea to market, and trusting that you’ll find the internal and external resources to fuel and fire your business. What I don’t mean is making strategic or tactical decisions about your business with your emotions on show. Yes, go with your gut feel, but don’t let the heat of your emotional reactions affect the cool head you’ll need to face investors, partners and clients.

Emotions have been evident in a recent episode of Dragons’ Den – from the Dragons as well as the companies – which saw two entrepreneurs declare their preference as to which Dragon they’d like to go into business with. It’s generally best not to show your hand, even if you do have a preference, as it’s better to see what offers emerge to work out which one is best for you.

For example, I think the guys from Jog Post should have chosen distribution expert Hilary Devey as their investment partner; it was an obvious fit, and Hilary knows every single postcode in the UK. But they didn’t want to give away too much equity, and they got the Dragon they wanted – Deborah – while Hilary maintained a dignified silence at having lost out.

Kate Castle from Bog in a Bag (brilliant idea, by the way, and I can see myself gifting it to many of my friends and colleagues) was less cool about it, and took a high-risk strategy by stating that she wanted retail expert Theo Paphitis to be her Dragon – even before he’d made an offer. He was initially reticent about investing, making his usual point the business was still in the early stages, and why should he give his expertise and contacts and not just his money. Well, in my opinion, because that’s what good investors do: they mentor and coach and advise and help grow the business and share in the success, ensuring that they all get a good return on the investment.

However, the point here is that Kate’s risk nearly didn’t pay off because not only was she showing her hand but, in doing so, I saw Deborah act like a Dragon scorned. At the first sign of her offer not being the preferred one, she immediately withdrew it and declared herself out. Kate eventually secured Theo, but she could have walked away with nothing.

In the negotiating room, power resides with the investors. If you find yourself in a situation where several investors (who may not all be in the same room together!) are interested in you, then keep negotiations balanced, don’t show your hand, and certainly don’t let any of them know who your preferred partner is. Most importantly, keep a cool head and your investors hot.

 

 

Business planning: seduce with the executive summary

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Pick any book off a shelf in a shop and you’ll expect the blurb on the back to pique your interest, arouse your curiosity, and incite you to buy the book. You may even scan the first few pages to see if the style, tone and topic are to your liking. If a book fails to grab you, you’ll slot it back on the shelf and forget about it – and maybe select one that will transport you on a much more dynamic journey.

As with books, so it is with business plans. You have to excite readers to the extent that they are compelled to read on. Which is why the executive summary has a pivotal role to play. Venture capitalists and investors considering whether to fund your business are known to make their decisions on the strength of an executive summary alone. At the very least, they won’t read any further if the first couple of pages don’t grab them.

Some business plans we’ve reviewed are choc-a-bloc with everything but the kitchen sink, and are hard work to wade through. Investors won’t have time to seek out the key facts and information, so make it easy for them. They want reassurance that they’ll get a return on their investment, so convince them you’re a risk worth taking.

If writing isn’t your strong point, find someone who is, because the executive summary needs to be simply set out and concisely articulated. You need to encapsulate in one page – two at most – what your business is all about.

You need to tell investors how you have the most exciting, unique service or product that is faster, cheaper and better than anything else on the market. You need to show how you plan to generate revenue, when you’ll break even, and how sustainable and scalable your business idea is. In short, you need to show how investors will get a sizeable return on their money within an agreed timeframe.

We’re not talking hype, here; investors will smell that a mile off. But if you don’t seduce them immediately with a compelling proposition, you’ve got no chance of getting to second base.

How aligned is your business to market needs? Take up our challenge and find out

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Is your business aligned to market needs? Are your team members subscribing wholeheartedly to a common vision? Is everyone in your company working towards ambitious but achievable objectives?

If you answered YES to all of the above, then we’ve got a challenge for you: take part in one of our diagnostic workshops and, if you can show us that your business is perfectly aligned and you know exactly where you sit in the value chain, then we won’t invoice you for the workshop.

Why thrown down this gauntlet? Because we’re so confident of the value that our interventions offer to early-stage companies – and because we see so many companies which simply lack that alignment.

Over the past 10 years we’ve reviewed hundreds of businesses, run hundreds of business plan diagnostic workshops, and assessed and fundraised for dozens of companies. Examples of what we find wrong during those reviews include:

  • Their products and services aren’t supplied in line with customers’ expectations, needs and points of pain.
  • Their value proposition and pricing are misaligned to market needs.
  • They don’t have the right people doing the right things.
  • Their technical product development may be misaligned with sales and marketing. Their people aren’t aligned behind a common vision.
  • Even if they have a goal, it hasn’t been articulated well to people within the business.
  • And when the business plan evolves – as it should – it doesn’t get articulated to the people who matter.

These are basic but essential factors that can prove to be the downfall of businesses. Don’t be one of them. Call 01235 831 777 to take up our challenge.

Business planning: is your business running to plan?

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When was the last time you reviewed your business plan? In companies that are stuck, the business plan either becomes an authoritarian rulebook by which every person in the company must abide – or it begins and ends its life as an unwieldy, unworkable document gathering dust in the archives.

Neither route will carry you to success, because a business plan has to be an organic document that changes and evolves. It can’t possibly stay in the same place because of the huge, uncontrollable variances that can influence the plan.

When sailing through commercial waters, with your business plan as your compass, you can easily get blown off course because you never quite know what the weather will be like, no matter how watertight and comprehensive you think your plan is. And when those market conditions change, so should your plan.

Are you aware of how far your business is running to plan? Or are you scared to review it? Don’t be, because with help and focus you can get back on course.

At Conduit Partners, we carry out a one-day diagnostics process to review your business plan. The management team are involved to make sure the business is realigned, and there is a common vision for all.

We help turn your business plan into a visual representation with timelines and monetary lines that can pinned up on the wall as a working document, which is then reviewed at monthly management meetings.

To discover how a visible, workable business plan can make the difference to your company, email mailto:info@conduitpartners.co.uk call 01235 831777.

Business planning: know your customer

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You may have the best business idea in the world, but if there’s no market for it, you may as well put that idea back in your bottom drawer.

The number one question any business needs to ask itself is: who are our customers and what are their needs? The importance of identifying customer needs – and how to meet those needs – is frequently underestimated. Yet it’s not just their needs you have to know: you need to identify where they feel pain. Unless you understand where they hurt, how can you provide them with an antidote to relieve that pain?

You need to empathise and engage with your customers, and know what market they’re in and what products and services they’re already buying, so you can focus on providing a unique solution for their needs.

When setting out, it can be helpful to identify what your ideal customers look like. What information do you have about them demographically, socially and economically that helps you adjust your offering to meet their ever-evolving needs? Where do they live, shop and work? What trends are affecting their buying behaviours?

Not only that, but you need to communicate with your customers regularly to assess how their needs are changing. Markets don’t stand still, and you need to keep up to speed. Often we find that businesses have the wrong offer aimed at the wrong customer with the wrong price and at the wrong time.

Don’t fall into that trap. Build a customer-focused business plan that tracks, anticipates and meets the needs of your clientele.

The Investment Readiness Series offers insight and advice from Conduit Partners – experts in early-stage business building – on preparing your business to raise funds from investors.  For an initial confidential assessment, email info@conduitpartners.co.uk or call 01235 831 777.

Is your business seeking investment?

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  • Do you have a great business idea but finding it difficult to find investors?
  • Have you taken your business as far as it can go, and are running out of money?
  • Or is your business floundering or in need of investment for expansion ?

If any of the above points resonate with you, then the Conduit Partners Investment Readiness Series offers first-hand tips and advice. Over the next few weeks, we’ll be sharing our expertise with you via a series of blogs based on the three key areas we know from experience that you will need to focus on to become investment ready – business planning, investment strategy, and fundraising – to ensure clarity of vision, positioning and how to communicate before approaching the investment community.

Conduit has 10 years’ experience working with over 350 businesses assisting and supporting them in mapping out their customer base, strategy and vision, and even coaching and mentoring the team in successful fundraising.

We have raised over £200m ourselves to help fund early-stage technology businesses and SMEs through our relationships with venture capitalists, business angels and private investors.

We are confident that the Investment Readiness Series will assist you and your business in evaluating and positioning yourselves for investment. Follow @conduitpartners on Twitter to ensure you keep up to speed with how to prime your business for investment success.

For an initial appraisal of your investment readiness, email info@conduitpartners.co.uk or call 01235 831777.