Stop Press
14 July 2011
The Government’s Plan for Growth, published alongside the Budget in March 2011, set out to achieve four overarching ambitions for the British economy, including making the UK the best place in Europe to start, finance and grow a business. A vital part of this is ensuring that smaller businesses in particular have access to a wide range of sources of finance.
In considering how best to support business angel investment at the seed-stage, the Government wants to ensure that any reforms deliver real additional investment without distorting behaviour or adding undue complexity to the tax system. This will involve considering a number of factors, including:
- evidence to ensure that the nature of the problems is correctly understood;
- costs to the Exchequer to ensure a proposal is both affordable and represents value for money for the taxpayer;
- complexity of the proposal, because the Government is committed to simplifying the tax system and any new proposal should not result in unnecessary administrative burdens;
- deliverability, including with a view to minimising abuse of the schemes; and of course
- adherence to the European Commission’s State aid guidelines on risk capital, and State aid approval
Business Angels
Related to this problem, is a recognition of the need for support in the form of business advice and expertise for start-ups. It has been suggested that to be most effective, incentives should be targeted at business angel investors in companies which are in the pre-start-up or “seed” phase to ensure that this tax relief encourages those individuals with expertise to invest at the seed level, allowing pre-start up companies to benefit from both their investment and their expertise.
The Government is considering a new stand-alone scheme targeted more narrowly at the seed level and business angels, the Business Angel Seed Investment Scheme (BASIS). Their thoughts for defining seed companies include, for example, companies in a pre-trading stage which intended using the funds raised to develop business concepts, perhaps involving the production of a business plan or the production of prototypes which require additional research, but prior to bringing a product to market and prior to commencing large scale commercial manufacturing.
We applaud this initiative whilst differing on a few key points with the detail- in particular that (whilst it is clear that additional support will be necessary for companies in R& D stage) we would argue that anyone who is unable to develop their business concept or produce a business plan is unlikely to attract investment anyway. Entrepreneurs should be entrepreneurial – capable and sufficiently driven to put imagination, market research and planning together by investing the necessary effort themselves without handholding by an investor or the government.
The full consultation document from HMRC can be found on our website (click here) and we would readily welcome any thoughts or case studies that you have to include in our response to this.
Mike Weaver, CEO
Beer & Partners Limited |
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CURRENT OPPORTUNITIES
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Events Diary
Angel Investment at Aston Martin
Gaydon, Warwick
17 August 2011
EVENT NOW FULL
Making Money from New Medicines Using Proven Drugs - Two Approaches
London
5 August 2011
Morning Session: 10:30am - 2pm (including lunch)
Afternoon Session: 12:30pm - 4pm (including lunch)
London Investment Fair
London
8 November 2011
10am - 4pm
Other Investor meetings are in the pipeline for the Midlands & Northern regions, in partnership with Eversheds, PKF and Gateley.
Please keep an eye on our Events Page for further information.
News
Excellent Feedback from Investee Companies - 'Securing Finance Seminar'
Another Securing Finance Seminar took place on the 22nd June 2011...
The evening seminar was attended by around 25 fund-seekers and was designed to provide a broad overview of the key matters to be attended to in seeking finance; how to prepare the business case and pitch it to potential investors/funders and what’s involved in the process.
We received extremely positive feedback from all those who attended. Other 'Securing Finance' seminars are being arranged for throughout 2011. These events will be of interest to:
- Majority Shareholders and Directors of privately owned businesses seeking finance for growth
- Private individuals seeking finance for entrepreneurial acquisition/start-up ventures.
07778 523 525
garforth@beerandpartners.com
6 Companies from Summer Investment Fair in Negotiations
Six companies who attended our last Investment Fair on the 14th June are currently in talks with Investors.
The June Fair proved to be one of our best yet in terms of the strong number of investors and their guests who visited us on the day and the high quality of companies presenting and looking for funding. Our selection process of taking on around 3% of the opportunities that are presented to us is key to this.
The strap line for the fair, “Face to Face Finance”, demonstrates our commitment not to speed investing, but to measured introductions to businesses seeking funding on a one to one basis, which can be followed up in detail subsequently if of interest.
Feedback from the entrepreneurs was that meetings were much more effective than presenting to a room at large.
Watch this space for further details as they come in...
Next Investment Fair confirmed for Tuesday 8th November
We are pleased to confirm that the third and final Investment Fair of 2011 has been booked for the 8th November.
The doors open to our investors at 10am and close at 4pm.
If you know of anyone who might be interested in coming along to the Fair as an Exhibitor, please Click Here for further information.
If you would like to come along as an Investor, further details can be found on our website; please Click Here .
Property Division
High Return Investment Opportunities in Property.
Beer & Partners Property Division specialise in sourcing all types of finance for experienced Property Companies across the UK and Europe.
Our deal size ranges from £1 – £20m with the minimum suggested investment value per deal being £50,000.
Our ability to facilitate syndication means that there are opportunities for investors at every level – in terms of investment value and experience. Syndication also gives you the opportunity to spread your risk and get involved in a number of deals if you should wish...
Please click here for further information
Associate Spotlight
Angus Milne
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Angus is this month celebrating his tenth anniversary with Beer & Partners.
He has now worked in the City for over thirty years, the last four of which, prior to joining Beer & Partners, were as London MD of a small Israel-based finance house, sourcing small-cap direct investments in the UK for his Israeli backers. He spent the fifteen years prior to that at Prudential-Bache, on corporate finance and institutional equity sales, working with the institutions in Edinburgh as well as London. His early career was in investment research, and he headed up his own research department for some years in the seventies. Along the way Angus has also set up and run a Scottish castle restoration company, and a BES company involved in classic cars.
Angus's leisure activities are quite catholic. He retains a keen interest in classic cars, and is an active member of the Maserati Club. He plays tennis and croquet at Hurlingham, he swims and runs, and enjoys skiing and windsurfing holidays with his family. He and Marcia go on regular walking holidays in Italy. He is a family man: his and Marcia's Ruby Wedding is coming up, there are three grown-up children, and the next generation has started. To soothe the mind, he plays bridge and backgammon, goes to the opera - particularly on lovely summer evenings at Glyndebourne - and plays an acoustic guitar - frequently his own compositions, clawhammer-style.
Angus is a graduate of Edinburgh University.
Click Here to Contact Angus.
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New Additions to the Beer Associate Team
We are pleased to announce a new arrival to our team of associates.
Please click on Andy's name to view his full online biog and photo:
Andy Chapman
Region: North
Andy specialises in helping early stage and established businesses with high growth potential to realise their ambitions.
Recently, he has mentored 3 clients to achieve "Start Up Business of the Year Award" and recorded 21 client businesses starting to trade and 90 jobs created in 2010. He was also adviser to 2 of the 6 finalists of the "Venturefest Yorkshire 2011 Investment Competition".
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CLOUD SOFTWARE: TRUST, PRIVACY AND IDENTITY MANAGEMENT FOR THE DIGITAL AGE
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Sector:
Funds Sought:
Location:
Stage:
Ref. Number:
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Software
£700,000
South East (exc. London)
Start-up
51354
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This company, with an experienced management team who grew a previous start-up to £2 billion market capitalisation and have a wealth of experience of building successful companies, recognised the opportunity created by the fact that 80% of people are concerned about the safety of their information on the internet.
They, with family and friends, have invested £900,000 over the last 5 years, and developed a suite of products to authenticate the identity of both individuals and companies and allow digital signature and exchange of contracts and other documents with legal certainty, which previously has not been possible.
With a target market of Finance, Legal and Public Sector initially, and strong interest from global Systems Integrators, major banks and IFAs already, this disruptive technology addresses the global challenges of identity, privacy and trust online. Several pilots are under way and £700,000 is required to finalise the user interface, grow the sales team and launch to market.
The management are offering attractive terms to investors, with significant returns within 5 years or sooner when they intend to float on AIM. The company is EIS eligible.
Contact: Sandy Mackenzie - 07771 604 765 - mackenzie@beerandpartners.com
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EXPANSION CAPITAL FOR ANTI-THEFT AND DATA RECOVERY SOFTWARE
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Sector:
Funds Sought:
Location:
Stage:
Ref. Number:
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Software
£3m
South East (exc. London)
Early Stage
51343
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Anti-theft and Data Recovery software is the new anti-virus, and the security market is booming.
Already in revenue, and with some large customer contracts with high-street retailers, insurance companies, major corporates and strategic alliances to be announced in the next few weeks, this company is seeking up to £3 million investment (in minimum tranches of £50,000) to continue their global expansion and on-going R&D.
The software runs on both PCs, Tablets and smartphones and allows for backup and recovery of data when the device is lost or stolen, as well as geo-tracking and remote data destruction.
The management team have successfully built and exited companies before, and are confident of gaining 10% global market share offering substantial returns within 3 to 4 years, when a trade sale is anticipated.
Contact: Sandy Mackenzie - 07771 604 765 - mackenzie@beerandpartners.com
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BRIGHTON PAVILION ICE RINK
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Sector:
Funds Sought:
Location:
Stage:
Ref. Number:
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Leisure
£140,000
South East (exc. London)
Expansion
51401
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Our client opened the Brighton Pavilion Ice Rink last winter and it proved a very popular attraction in the city with approximately 64,000 visitors. The FT voted it the best winter Ice Rink after Somerset House and the BBC Breakfast Show used it as one of their festive locations.
The rink is now set for expansion in future years to accommodate demand (over one third of the sessions last winter were sold out). With ice skating becoming one of our most popular winter pastimes there is also the potential to open rinks in other major cities.
Further equity investment is now sought in order to provide working capital. This represents an excellent opportunity to invest in a company that has proven demand for its product and is now in a good position to exploit the opportunities open to it.
Significant equity stake available. EIS eligible (up to 30% tax relief). Comprehensive Business Summary available on request. Contact: Frank McIlwee - 07801 736 034 - mcilwee@beerandpartners.com
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ATTRACTIVE RETURNS - PRE IPO FUNDING OPPORTUNITY: UK TOXICOLOGY LABORATORY SERVICES
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Sector:
Funds Sought:
Location:
Stage:
Ref. Number:
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Bioscience
£500,000
West Midlands
Expansion
51142
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Established in November 2007 and trading profitably, this business is poised for significant growth. Management are preparing for a full listing on LSE in 2011 and are seeking a pre-IPO investment of £1m with short term, attractive returns to satisfy regulatory requirements and support growth and development activities.
Current profitable turnover of £1.4m is forecast to grow to over £4m by 2013 / 14 with a 50% EBITDA through all three of its core trading areas:
- Forensic Toxicology – expansion through national contracts following the UK Governments decision to outsource its Forensic Science Service.
- Forensic Hair testing – a unique UK service with advanced technology.
- Clinical Research with Toxicology - moving into ADMET (Adsorption, Distribution, Metabolism, Excretion, Toxicology), significant growth potential.
An experienced and well balanced management team have developed this business and established an excellent reputation for service and quality with investment in state of the art technology in its operational centres, it is fully accredited.
Plans for a full listing on the LSE in 2011 are well advanced and investors may expect a growth in their investment of 2 to 3 times in the short term.
Contact: Steve McEwen - 07890 848 618 - mcewen@beerandpartners.com
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SECURED UK RESIDENTIAL PROPERTY INVESTMENT WHICH DELIVERS CASHFLOW AND INSTANT 50% MINIMUM ROI ON RETAINED CAPITAL, CASHFLOW AND CAPITAL REPAYMENT
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Sector:
Funds Sought:
Location:
Stage:
Ref. Number:
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Property
£75,000
Yorkshire & Dorset
Expansion
51364
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Creation of a hands off professionally identified, purchased and managed property portfolio from off market opportunities. The properties are acquired using an extensive knowledge base with, on average, a 26% discount using RICS valuations securing an instant profit. The established company uses in-house teams of expert buyers, project managers, builders and rental agents to let and manage properties on an ongoing basis until they are sold to return cash and realise profits.
There is, on finalising the portfolio, an immediate minimum equity gain of 50% supported by a contractual guarantee which includes an agreed timescale.
On completion of the portfolio the £35,000 working capital element of a £75,000 investment is returned to the investor leaving a retained investment of £40,000. An initial investment of £75,000 generates a portfolio worth £320,000 with a minimum retained equity of £60,000, returned working capital of £35,000 and generates surplus cash of between £2400 – £3600 per annum.
The immediate ROI is between 50% and 76% and is dependent on size of the initial portfolio.
The benefits include immediate equity gain, monthly cash surplus and longer term growth in line with the housing market in a tangible asset.
Larger portfolios can be built and managed for clients who wish to maximise the opportunities in this sector.
The very experienced and successful management team have invested heavily themselves and have been delivering this type of portfolio to existing clients for the last 3 years and have now opened this opportunity to a wider audience.
Contact: Steve Johnson - 07787 104 736 - johnson@beerandpartners.com
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LEADING CLOUD PROVIDER TO PROFESSIONAL SERVICE FIRMS
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Sector:
Funds Sought:
Location:
Stage:
Ref. Number:
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Business Services, IT, New Media, Software
£450,000
London
Expansion
51342
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Having established momentum & credibility as the leader in the provision of cloud based IT solutions to the UK legal sector, an investment of up to £450,000 is sought to support growth.
Using a set up & IP the directors have developed, the company gives clients their IT delivered to very demanding standards. Customers contract for the service for a number of years under one monthly bill. The directors are highly experienced in the sector and have developed a strong business model.
There is a strong sales pipeline. The company has a significant profile in its chosen market and this is resulting in a flow of business enquiries.
The company is expected to move into profit in the year ended June 2013. The growth of the Cloud computing sector & the market leading position will make the company very attractive for any acquirer wishing to secure a strong market position & credibility in a lucrative market segment.
It is anticipated that after 18 months from investment the company will be well placed for a trade sale, and an exit at a premium by year 5 is anticipated giving any investor a very significant return.
Contact: Robin Little - 07739 933 191 - little@beerandpartners.com
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RIDE THE GROWTH IN MEDICINES IN CHINA WITH UK EIS ELIGIBLE INVESTMENT
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Sector:
Funds Sought:
Location:
Stage:
Ref. Number:
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Bioscience, Medical, Pharmaceutical
£2m
London
Early Stage
51357
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This business sells and licenses out from its portfolio of medicines, clinical drugs and special active ingredients for food and cosmetics for sale in China and Europe. All products appealing to the mass markets of China and Europe.
All the compounds and formulae it has discovered and developed are subject to established EU regulatory and approvals process and are derived from plant based ingredients.
Access to China is through an almost 50% owned Chinese partner company. (to be majority owned shortly)
The company enjoys serious discussions and existing partnership arrangements with global companies.
It requires funds to sustain development of its pipeline of compounds and acquire controlling interest in the Chinese partner company.
The team and advisors have a track record of commercial achievement in this industry and the business is run with high standards of corporate governance which have been established to stand up well in the face of acquirers’ interest or possible public listing.
This is a unique opportunity to gain a foothold in the enormous Chinese market with the benefits of EIS and UK management. A
Presentation is being held on the 29th of July, see our events section for more information.
Contact: Simon Heywood - 07831 655 533 - heywood@beerandpartners.com
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Richard Silberbauer - 07808 144 609 - silberbauer@beerandpartners.com
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A NEW APPROACH TO HIGH QUALITY AND ETHICAL DEBT ADVICE AND SOLUTIONS
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Sector:
Funds Sought:
Location:
Stage:
Ref. Number:
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Financial Services
£300,000
East Midlands
Expansion
51366
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The market for providing debt advice and solutions to individuals and small businesses is significant. Personal debts alone stand at £1.5 trillion and the long-running recession has led to year-on-year increases in the number of financial difficulty cases. However, in too many cases the quality of the debt advice and solutions is compromised by companies focused on traditional advertising and direct marketing channels, where they end up selling expensive solutions that customers may not need.
This company, established in February 2010, has a new approach to offering debt advice and solutions which has been quickly accepted in commercial environments. Working by referral only, the company’s route to market is through national corporate companies that have large numbers of tenants, licensee’s or franchisee's that for various reasons find themselves in an over-indebted situation.
Because the business works via referral, it has very little front loaded costs enabling it to offer a better and more thorough service at an affordable cost, whilst maintaining strong margins.
The corporate entity is usually the principle creditor and refers their client business to the company as an independent source of advice. The company assesses the individual financial position and if feasible offers a workable unbiased solution often with the co-operation of the creditors.
This very experienced management team recognised the substantial gap in this market and have been quick to firmly establish their position in the Midlands. The success of their approach means they are increasingly being approached to service clients on a national basis. The company has an opportunity to rapidly expand their service through these corporate referral partners, who all operate nationally, and is seeking a mixture of equity and debt funding to put in place a structure capable of meeting the demand.
Contact: Mike Epton - 07733 107 238 - epton@beerandpartners.com
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