Business
Planning
Biotechnology YES
Young Entrepreneurs Scheme
Monday 13 October 2014
Stephen Slater
Director
Who are RMT ?
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North East’s leading Independent accountancy practice
6 directors & 70+ staff
Started in 1954
National and international networks
Full range of service
“One-Stop Shop”
Owner Managed Business Specialists
Commercialisation Lifecycle
Commercialisation
Strategy
Dvpt
Revenue
Generation
Market
Research
Product
Dvpt
Strategy
IP Protection
Funding
Package
IP
Exploitation
Idea Dvpt
Company
Set Up
Concept
Research
Working
Capital
Business
Plan
Risk Management
What is a start up?
New and
Highly
Entrepreneurial
Has the Ability
to Achieve a
Big Outcome
(Exit / IPO)
A distinct type
of business
with 5 key
attributes
Growth
Focussed and
Scalable
Disruptive
Technology
Addressing an
Unmet Need
Five Factors of a Fundable Business
Strong
Management
Team
Realistic Exit
Opportunities
Competitive
Advantage: IP /
Technology
Large and
Growing Market
Sector
Scalable and
Capital Efficient
Business Model
What is a scalable business?
Businesses that scale are businesses with Operating Leverage
% Annual growth
Revenue
Operating
Expenses
Adding Operating Costs
(Technology, Sales, Staff
etc.) at the same rate as
which Revenue grows does
not equal scale.
Time / Years
What is a scalable business?
What is a Scalable Business?
Businesses that scale are businesses with Operating Leverage
% Annual growth
Revenue
Businesses that achieve
exponential revenue growth
with only small and
incremental increases in
operating costs are scalable
businesses.
Operating
Expenses
Time / Years
Articulating Product/Market Fit
Describing your Start-Up’s “value zone” is about working out where
the 3 circles intersect:
Your business plan
should position your
start-up here
1. Market
Demand
(What do your target
customers want?)
2. Competition
(What unoccupied
markets exist?)
3. Product
(What do you do
best? What can you
do best?)
The Make
Structure
anan
Investor
Ready
Business
Plan plan
upofof
investor
ready
business
Executive Summary
1
Introduction
2
Product & Technology Overview
3
Business Model
4
Market and Competitor Analysis
5
Customer/User Acquisition Strategy
6
Product Roadmap
7
Management Team
8
Financial Projections
What Investors Want To Know
• What is your IP and can it be protected? What barriers are there?
• What is so compelling about your product/service? Why will people want
to buy it?
• Who are the key competitors and how are you different?
• How scalable is the business?
• What is your market?
• Do you have a clearly defined revenue model – how will your business
make money?
• What is your route to market? Can you add credibility to this?
• Complete and robust financial projections – the return!
• The risks – SWOT and PESTLE
• Confidence in management team – technical and non-technical. Are they
incentivised?
• Exit plan
Tips and common mistakes
Credibility Builders
The most important word in raising early-stage funding is Credibility. This starts
with the CEO. What impression do you think you are making with an investor?
You can will make it
work at all costs
(convincing)
Demonstrated
commercial savvy (not
just technical)
Track record with other
technology start-ups
(growth/exit)
Growth ambitions that
are also believable and
pragmatic
Deep subject matter
expertise and/or
industry knowledge
Know your business
plan and model inside
out
Compromising your credibility
OverClaiming
Vagueness –
Lack of Clear
Facts
No Believability
to the Strategy
Credibility
Failures
Not Delivering
on Requests
(Delays)
Not Being Able
to Explain the
Business Plan
Going too
Early (UnderDeveloped
Idea / Model)
Typical Mistakes in Investor Ready Business Plans
Nothing to
Visualise the
Product
Too many
Revenue
Streams
Next Round
Required Before
Company Hits
Revenue
High Burn
Rate (Small
Runway)
Typical
Mistakes in a
Business Plan
Seeking to
Raise Finance
No Slack in the
Company's
Operating
Capital
Limited Time
Between
Funding
Rounds
…and the classic mistake
“Start-Up X will achieve its projected revenues by taking just 1% of the £48bn Global
market”
The Investor Pitch
Find out how long you have and
who is attending. All of your
Management
Team
should
attend.
Address objections with specific
data – build their investment
case for them. Answer questions
factually and to the point (don’t
waffle)
Be confident and show passion
but explain what you do in
English. Investors will not spend
time trying to find out about
your product.
Investors
see
lots
of
presentations. You have to stand
out.
Treat objections as a sign of
interest. Do not get defensive investors will push you to test
you.
A bad presentation is a missed
opportunity – you won’t get a
second chance.
The Slide Deck
Introduction (Including Elevator Pitch and Team Introductions (5 Minutes)
Concisely say who and what you are. Elevator Pitch and Team introductions.
5 Minutes
Problem
Solution (Including Demo)
Underlying Technology
Business Model
One Slide Each
User Acquisition
Core of the
Presentation:
15-20 Minutes
Team
Headline Financials
Timeline and Milestones
Summary and Call to Action
2 Minutes
The Slide Deck
Back Up Slides (After Your Final Slide):
• Market Data
• Details of Technology
• Financials
• Competitors
• Patent Applications
• Customer Correspondence
Do Not Present These
but have them in
reserve:
Be ready with back up
slides / materials on
more detailed areas
outside of what the
slide deck covers in case
you are asked.
Use the relevant slide to
then explain your point
or answer.
• Letters of Intent
The Slide Deck should give a summary overview of the Business Plan
Tax Relief for Angel Investors
EIS
Income tax relief
Reduction in tax bill of 30%
of investment (up to £1m
per tax year)
Seed
EIS
Effective for shares issued from
6 April 2012
Income tax relief
Reduction in tax bill of 50%
of investment (up to £150k
per company, max £100k
per investor)
CGT deferral relief
CGT relief
On disposals one year
before investment to three
years after
CGT exemption
50% of gains made in
the year reinvested
(2013/14)
CGT exemption
If shares qualify for
income tax relief no
CGT on disposal
If shares qualify for
income tax relief no
CGT on disposal
Shares must be issued
within 2 years of
commencement of
trade
Research & Development Tax Relief
Activities/projects which seek to:
“extend overall knowledge/capability in the field of science or
technology”
• Eligible expenditure:
Wages and salaries, consumable materials, power, water, fuel, computer
software
• Tax Reliefs
Enhanced deduction of 130% to 225% against profits from 1 April 2012
chargeable to corporation tax,
or
Repayable tax credit (up to 25p per £1) if loss making
Patent Box
Elect to Apply 10% Tax Rate to
Profits Arising from Qualifying
Patents
Grants
•NBSL www.nbsl.org.uk
•Business & Enterprise Group www.investment4growth.co.uk
•Newcastle Science City www.newcastlesciencecity.com
•Growth Accelerator www.growthaccelerator.com
•BICC Innovation Programme www.ne-bic.co.uk
•Local councils
•Lets Grow – RGF – http://www.thejournal.co.uk/all-about/let's%20grow
•Research & Development Grants – www.innovateuk.org
•Technology Strategy Board – www.innovateuk.org
Venture Capital
•Proof of concept – www.northstarventures.co.uk
•Early stage seed funding (Accelerator) – www.northstarventures.co.uk
•Technology – www.ipgroupplc.com
•Angel match fund – www.riverscap.com
•Business Angels – www.bbaa.org.uk
•Private Sector Venture Capital – www.bvca.co.uk
•NESTA – www.nesta.org.uk
•Local Angel Groups – www.big-angels.co.uk
investors.com
www.gabriel-
Websites
www.nea2f.co.uk
www.j4bgrants.co.uk
www.carbontrust.org
Crowdfunding
• Finance Raising (Equity or loan) – Crowdcube
• Product Funding - Kickstarter
Useful links…
www.gov.uk/browse/business
www.bytestart.co.uk/
www.hmrc.gov.uk/newbusinesses/
www.r-m-t.co.uk
Example – Would you invest?
• Belle and Sebastian want to start up in business together. They have both
been working in the club scene for over ten years, Belle as a DJ and
Sebastian as a venue manager. They have had an idea of creating a
website to endorse up and coming DJ’s by giving them the opportunity to
record, promote and sell their music.
• They have £20,000 between them to put into the business but need to
raise a further £30,000 to get the business off the ground.
• Where are the concerns for an investor?
Thanks for listening!
Any
Questions?
Contact details
Stephen Slater
Director
RMT Accountants and Business Advisors
Limited
0191 256 9500
Stephen.slater@r-m-t.co.uk
www.r-m-t.co.uk
@cyberaccountant