Stop Press
18 May 2011
We were recently asked by journalists for a quote on the new series of The Apprentice which, this year, is offering £250,000 start up capital to the winner rather than an apprenticeship working for Alan Sugar. General commentary by the press was that £250,000 is an extraordinarily high amount for a new business.
Whilst we believe that companies should be run on a shoestring we all know that if your shoes are too tightly laced you cannot walk properly.
Most of the businesses that approach us have already sunk around £100,000 of friends and family money into their venture and seek further funding of £200,000-£500,000 to take their product to market and fund working capital requirements.
If the entrepreneur’s attention is wholly focused on day to day cash survival, the business is unlikely to grow. He will be overly focused on survival and fundraising, with insufficient energy remaining to develop the product and market. Worse, if a company is underfunded it tends to get halfway down the road and come to a grinding halt when they run out of cash.
There are two important points; first fundraising takes up a lot of time, and secondly, the entrepreneur’s life is very lonely. It is crucial to an investor that the company is not a one-man-band. The answer is to raise sufficient money at any point to take the company to the next level, and secondly to start building a management team for that level whilst still on the previous one.
Our average deal size in 2010 was £180,000 – up 20% from 2009 and closing back in on the pre-recession norm of £225,000. We do however believe that entrepreneurs should have substantial investment of their own in their companies (from friends, families or foregone income) before approaching business angels. Risking someone else’s money is a responsibility but putting your own livelihood on the line is a crucial demonstration of faith and ensures interests of both entrepreneur and investors are aligned.
Mike Weaver, CEO
Beer & Partners Limited |
|
|
CURRENT OPPORTUNITIES
|
|
Events Diary
(click on titles for full event details)
New Medicines from Old Drugs
- Life Sciences Presentation
London
24 May 2011
Morning Session 11:00 - 13:00
Lunch 13:00 - 14:00
Afternoon Session 14:00 - 16:00
Angel Investment at Aston Martin
Gaydon, Warwick
25 May 2011
EVENT NOW FULL
Pitch Perfect
- Life Sciences Presentation
London
31 May 2011
12:00 noon - 13:00
Mayfair Investment Lunch
London
1 June 2011
Morning Session 09:45 - 14:00
Afternoon Session 12:30 - 16:30
Investor Meeting with PKF
Nottingham
9 June 2011
15:30 - 18:00
Investment Fair
London
14 June 2011
10:00 - 16:00
'Securing Finance' Seminar
London
22 June 2011
18:00 - 20:30
Meet the Team Behind Breakthrough Diagnostics
London
29 June 2011
Morning Session 11:00 - 13:00
Lunch 13:00 - 14:00
Afternoon Session 14:00 - 16:00
Investor Meeting with Eversheds - July
Birmingham
14 July 2011
(Time TBC)
Angel Investment at Aston Martin
Gaydon, Warwick
17 August 2011
EVENT NOW FULL
News
Life Sciences Series of Events -
beginning this Tuesday 24th May
Our colleagues Simon Heywood and Richard Silberbauer have set up a series of events within the Life Sciences Division.
The first event to kick off proceedings is a presentation from Beer clients Andrew Gardiner and David McHoul entitled "New Medicines from Old Drugs - lower risk pathway to pharma riches". Taking place at the Beer & Partners head office in London, they will explain how their business delivers a low risk path to making money from pharmaceuticals.
This event will be run twice on the Tuesday 24th May both in the morning and afternoon; to register please click here.
Click here for the Life Sciences events page.
Next Investment Fair on 14th June
For over 10 years, Beer & Partners have been running the Investment Fair, attracting up to 200 of our private investors and institutions wishing to invest between £50,000 and £2m. 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 .
Beer EIS
Spreading the risk of holding individual investments, by delivering a diversified portfolio of shares in unquoted companies.
Since its launch, The Beer EIS Scheme has invested £600,000 in six companies and we are now taking further subscriptions as of the 10th January 2011...
Please click here for further information
Associate Spotlight
Malcolm Rash
|
Although he qualified as a Chartered Accountant with Grant Thornton back in the early ‘70’s, Malcolm was always keen to leave the “Profession” behind and quickly took up his first post in Industry with The W H Smith Group, running the finance side of 14 transport outlets in the Midlands which not only embraced newspaper distribution, but also a general parcels network. This was followed by a number of posts in the Automotive field with franchised car and truck dealerships at both Accountant and Finance Director levels, a spell as Finance Director at Silverstone International Motor Racing Circuit, and also as Managing Director of a new Car Rental company which was quickly acquired by Sixt. Whilst at one truck dealership, Malcolm got his first taste of funding a business through a Venture Capital source, 3i.
In 1994 Malcolm set up The Project Partnership International, a small network of professionals, assisting SME’s to raise business finance. This took a variety of forms; equity funding, bank funding and commercial mortgages. It not only involved UK businesses, as Malcolm and some colleagues within The Project Partnership also worked on cases in the far east, principally Taiwan and China.
Malcolm joined Beer & Partners in 2004, having been impressed with the way that the network had grown, along with its reputation for delivering industry leading results for clients.
As a result of his keen interest in the Business Angel field, he became an Investor himself, and has experienced the two extremes of losing an entire investment, but also the euphoria that goes along with seeing one of them achieve strong growth. The latter case, Trojan Electronics Ltd, of which he is Finance Director, was a start up in 2002 with 4 employees, now employs over 130 between 3 sites, and in 2010 qualified for the Welsh FastGrowth50 Awards for the 4th time and was the ONLY company in Wales to qualify for the Sunday Times Virgin FastTrack 100 Awards. As a result of the latter, he is looking forward to meeting Sir Richard Branson in early June.
When he’s not working, Malcolm likes to watch Motor Racing, particularly Formula 1 and the World Rally Championship. He also loves sailing and walking, and is particularly fond of red wine. His family runs to 7 children and stepchildren, all grown up, with 12 grandchildren.
|
|
|
|
PRICE COMPETITION WEBSITE: WHERE PRICE COMPARISON MEETS EBAY - BID FOR MY BUSINESS
|
|
Sector:
Funds Sought:
Location:
Stage:
Ref. Number:
|
Financial Services & Internet
£1.5m
North West
Early Stage
51296
|
 |
|
The future online marketplace where suppliers bid to compete to provide customers with financial products and services and win their business.
Today's comparison websites rely on niche expensive marketing rather than providing customers and brokers with low cost value products.
The current web-based financial comparison sites market was valued in excess of £1bn in 2010 in the UK alone.
This trademarked, proven platform provides new, exciting and more interactive ways for customers to transact online. With consumers looking to research and save money the market is ready for the launch of something new and innovative.
Imagine a website where you can list your tailored requirements for a product or service, the business marketplace then competes to provide you with bespoke quotes and options; then you select and complete the deal.
The website platform is fully developed and ready to launch in the initial selected insurance markets. From a technical perspective our client has created a unique proposition ready to support their plan to introduce online competition to the market. The platform is highly scalable with global reach.
Our client is seeking a strategic partner to invest capital and management resource in return for an equity stake. Our client will ensure all of the capital investment is used to build and grow the company, so realising its full potential and aiming to provide a high multiple return for investors.
Contact: Mike Huntriss - 07774 120 701 - huntriss@beerandpartners.com
|
|
|
|
|
ONLINE RETAIL GROUP BUYING CLUB
|
| |
Sector:
Funds Sought:
Location:
Stage:
Ref. Number:
|
Internet
£400,000
London
Expansion
51252
|
|
|
Our client’s active website connects consumers to a supplier base for everyday services such as mobile phones, home broadband, energy and insurance, on whose benefit the Club negotiates substantial membership discounts that give best value and exclusive deals (unlike price comparison websites). These provide annual savings of between 30-40% off an average UK household budget.
The concept originated in Norway with "Ownersbuy" where sales exceeded £20m when the business was successfully sold in 2009.
There is a strong experienced management team, all of whom are shareholders. They forecast to be in profit in year 2.
£650,000 of this second round of £1,050,000 has already been raised, leaving £400,000 available in return for a 13% equity stake.
This "social buying" and "crowd sourcing" sector has shown some substantial investment returns. If the planned exit in year 4 materialises, then on a EBITDA multiple of 12 the £400,000 being sought would be worth £21.8m by August 2014.
Contact: Robert Whitaker - 07768 878 801 - whitaker@beerandpartners.com
|
|
|
|
|
NICHE ELECTRICITY SUPPLY
|
| |
Sector:
Funds Sought:
Location:
Stage:
Ref. Number:
|
Environmental & Energy
£700,000
East Midlands
Start-up
51295
|
|
|
|
|
The directors of this start-up company believe that there are currently enormous opportunities in the energy supply market, as a result of the massive changes being wrought by deregulation, government policy aimed at reducing carbon emissions and growing technological innovation, such as the introduction of smart metering - the "green" revolution.
What was a staid necessity of life, is being transformed into one of the UK economy's most exciting sectors.
Our clients wish to be at the forefront of the green revolution - believing that there is massive potential for credible new brands untarnished by decades of poor customer service and alienating practices which characterise the business models of the established industry players. The rapid growth of new entrants to the mainstream electricity supply sector suggests that there is appetite for alternatives to traditional suppliers.
The company will operate a simple, green and easy-to-understand tariff, and year 3 projections show a turnover of £26m and a PBIT of £2.9m. The company seeks immediate investment of £200,000 in return for a substantial stake in the business. This will be used to acquire the necessary licences. A second tranche of £500,000 will be required over a two year period following start-up. Proposed exit via trade sale.
Contact: Malcolm Rash - 07815 091 687 - rash@beerandpartners.com
|
|
|
|
|
AWARD WINNING COMPUTER GAMES RENTAL & SALE.
INTERNET BASED.
|
| |
Sector:
Funds Sought:
Location:
Stage:
Ref. Number:
|
Leisure
£100,000
East Midlands
Expansion
50504
|
|
|
The client is a successful games rental company, established in 2005. Turnover has climbed to around £400,000 and the company is profitable.
In January 2009 the company won the WebUser Magazine Gold Award for its website and service, ahead of all its competition, including the main two competitors, LoveFilm and Swapgame. The company now seeks a modest investment of £20,000 to help accelerate it's growth to a turnover of £1m and a PBIT of £244,000 by 2013/14.
As important as the investment are the skills which an investor with relevant sector experience can bring to the company to contribute to this planned growth, which will result from further investment in stocks for sale and various improvements to the website and customer offerings.
Exit is likely to be via a trade sale within 5 years.
Contact: Malcolm Rash - 07815 091 687 - rash@beerandpartners.com
|
|
|
|
|
CANCER DIAGNOSTIC PLATFORM PREPARING TO LAUNCH INTO A SUBSTANTIAL GLOBAL MARKET
|
| |
Sector:
Funds Sought:
Location:
Stage:
Ref. Number:
|
Medical
£500,000
North East
Early Stage
51277
|
|
|
 
|
|
Screening and diagnostic programmes for cervical cancer involving millions of women have helped to save lives despite subjective and inaccurate methodologies. Vaccination programmes are costly, do not provide complete protection and are causing a rethink in screening approaches. Despite the current best practice, too many women undergo unnecessary and painful biopsies and excisions.
Substantial budgets are committed to combating cervical cancer but the high cost and inefficient use of resources means that better technologies will be very favourably received.
The company has developed a unique diagnostic device based upon an objective physiological property - the variation in electrical impedance between healthy and diseased tissue. Patents have been awarded and others are in process. By first launch in Q4 2011, it will have been tested in 900 women in clinical trials and adoption promises less distress, considerable cost savings and better outcomes. An international panel of specialists are hoping to use the product as soon as possible.
Launch will initially be into the referral market of $350m to $500m and then into the screening market of $4.5bn. With clear advantages over current technologies and serious interest from multinationals, the company believes that using a conservative multiple of 4 times sales the company will be valued at £50m in 2015.
Investment is EIS qualified. Further detailed information available.
Contact: Bill Caldwell - 07785 222 862 - caldwell@beerandpartners.com
|
|
|
