Funding Growth
Finance South East (FSE) has already helped businesses in the South East raise more than £20 million over the past year. But Sally Goodsell,Finance South East’s Chief Executive doesn’t intend to stop there.
Finance South East helps ambitious companies to grow through a combination of direct investment and associated support. Their range of services includes advice on developing a funding strategy, ntroductions to funding sources, fund management and mentoring and investor networks.
COMMERCIAL FOCUS
“Finance South East is partly funded by SEEDA, but we are run as an independent company,” Sally explains, “Our Directors are either successful business people, or have a venture capital background and our team comprises individuals with many years experience in the finance sector, both debt and equity, as well as some who have run their own small businesses.”
A recent survey showed that one of the biggest barriers to business growth was a lack of access to appropriate finance. That’s especially true for early-stage businesses, or businesses that don’t fit the banks’ traditional risk profile.
“It’s a two-pronged issue,” says Sally, “There’s not enough early-stage finance available to companies; and many entrepreneurial teams won’t know where to go to get the finance that is available.”
A REGIONAL FUND MANAGER
To address this, FSE has established itself as an important player in the region’s fund management landscape. “We identify gaps in the ‘funding escalator” – ie: the funds available to companies as they develop and grow - and then address those gaps by making funds available to companies when they really need them. For early stage companies that might be seed capital, or it might be proof of concept funding.
However, Finance South East does not simply deal with early-stage businesses. It looks at businesses at every stage of development. “Some of our client companies may be well-established, but need additional funding to help with growth plans or the launch of a new product,” explains Sally.
INTEGRATED SUPPORT
Finance South East support client companies in different ways, depending on their needs. “We like to call ourselves an investor with a difference, because we don’t just lend money. It’s about providing ongoing support,” says Sally.
The emphasis throughout is on one-to-one support from qualified financial professionals: from offering client companies guidance at an initial pre-investment stage to advice on choosing a source of finance, and introductions to other business support services, most notably the Enterprise Hub Network.
“We work well with the Enterprise Hub Network,” explains Sally, “Because we have a complementary set of skills and attitudes. FSE looks at companies from a primarily investment perspective, whereas the Hubs offer more holistic business support. Working with both Finance South East and an Enterprise Hub means that the client gets more from the Investment Readiness (IR) programme – the Hub will work with the client to address the issues raised by the Finance South East Funding Adviser during the IR process, which will help to maximise the company’s chances of successfully securing funding.”
VIRTUOUS CIRCLE
“The key to Finance South East’s model is that we are looking for a return on our investment to fund new businesses in the region. The idea is that we create a virtuous circle. The return we realise from the companies we invest in that become successful can then be reinvested into new companies that need help.
“In terms of the Showcase companies mentioned in this issue of Hub (Article: How To Get Investment Ready), Finance South East invested in Sports Analysis in its early stages, and introduced them to the Enterprise Hub Network where it received a range of other business support geared towards helping them grow faster. It is now in the final of the Showcase, and is likely to be coming back to us for more investment soon.
“For the future, the big news is that we’ll be launching a new seed fund in March 2007 to help early stage companies, in conjunction with a number of partners offering equity investment of up to £250,000 for growth companies. But we’re always working with partners to develop the funding escalator, and improve companies’ access to finance.”
ADVISORY SERVICES AND INVESTMENT READY
The Investment Readiness Programme helps businesses to develop its planning and strategy to a point where any potential investor will have confidence in it. The Investment Readiness service includes:
- An assessment of the business plan and financial forecast
- A critique of the viability of the business proposition
- An action plan detailing any changes needed to maximise the chance of finding funding
- Advice and guidance on how to improve your presentation of the business plan
- Details of potential funding options
- Help with an appropriate funding strategy that might include funding options
Fund Finder
Fund Finder is a service for businesses that are Investment Ready, but need help with their funding strategy and with raising finance.
Funding Support
Funding support is useful for companies requiring assistance with approaching their existing bank to raise funds or where their bank has initially declined to assist. The service focuses on supporting business owners through the initial stages of reparation and negotiation.
Biotechnology Finance Advisory Service (South East)
Aims to support the sustainable growth of businesses in the South East whose main activities are biotechnology or healthcare technologies. It offers a fully integrated service to help companies access suitable finance, to get sector specific advice on business development and locate any financial and regulatory advice that might be needed.
Funding Enterprising Women (FEW!)
FEW! is a free programme, run by women for women, to help female entrepreneurs understand the various funding sources available to them and become investment ready, in order to maximise their chances of successfully raising finance for their business.
Business Angel Networks
Finance South East manages the South East Capital Alliance which is a Business Angel Network for the region. FSE works with investment ready companies before they present to this extensive angel network, providing an opportunity for a ‘dry-run’ practice session with impartial feedback and advice to improve their pitch.
FUNDS
Accelerator Fund
A £10 million fund providing an innovative source of finance for growth companies. Finance South East can lend companies an initial £100,000 at any stage as long as they can demonstrate the potential for significant growth. A second loan of up to £100,000 can be made after nine months.
CommercialiSE PoCKeT
PoCKeT awards range from £5,000 to £50,000 for ideas where the technology or commercial potential needs to be proven. Through the CommercialiSE framework, PoCKeT provides funds for early stage business ideas. PoCKeT is specifically for “proof of concept” development where the knowledge and expertise of a Higher Education Institution (HEI) or Public Sector Research Expertise (PSRE) can assist to make them a commercial reality.
CommercialiSE Seed Fund
Equity investment of up £250,000 for growth companies. Available from the end of March 2007. The CommercialiSE Seed Fund will provide private equity investment up to a maximum of £250,000 to support early stage companies in the South East area.
The Fund is principally aimed at companies that have already proven that their product or service is viable, and that the route to market is feasible.
www.financesoutheast.com
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Created Date: 25-03-2007
