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David HornerConcept To Market
Julie GillInfego Media
The intent behind the $6m investment Challenge
David Horner Julie Gill
www. concepttomarket.co.nz www. Infego.co.nzPh (09) 921 4000 (09) 375 6034M 021 970 648 021 512 764E davidhorner@ [email protected]
John WaughUK Trade and Investment
Grow your global business from the UK
Why the UK?
• The UK is an integral part of the global economy
• The UK is an investment multiplier• The UK is a springboard for global growth
Our USPs
• The best environment for business• World class creativity and innovation• Gateway for international connections
Your Market
Richard McleanBusiness Development Specialist
Concept To Market
A quick checklist
• A real need for your solution• Choosing a route to market• Sales channels and partners
Some potential gaps• Target customer
– Single identifiable buyer for your offer, accessible to your sales channel and well funded enough to pay for the whole product.
• Compelling reason to buy– Vitamins vs. Painkillers
• Whole product– Can we field a complete solution to the target
customer’s compelling reason to buy?• Competition
– Has the problem been addressed by someone else?
Find a route to market
• The best way to find a route is to use a map– Build a market map– A visual approach – removes clutter and offers
insights that long documents cannot– Encourages thinking vertically and laterally and
builds a deeper understanding of your customers, supply chain and competitors
– Helps focus time and resources, consolidates market information from your key people
– Helps you understand who is who and who is doing what to whom.
ME +20
SME -2-5
Home User
Retailers (Harvey Norman etc)
Sample Market Map – Accounting software in NZ
Home Office
SME -6-20
Corporate
Hardware and Software Distributors
Software - Vendors Microsoft SAPMYOB
Ingram Micro
Hardware Manufacturers Toshiba
Dove Renaissance
HP
A B
Dell IBM
Xero
Chartered Accountants
System Integrators
Sample market map (complex)
Sales Channels & Partners
• Why develop channels and partners?• Choosing partners• Setting objectives• Measurement• Communication• But first consider the alternatives
– Kick a big incumbent in the shins
Richard McLean
www.concepttomarket.co.nzPh + 64 9 921 4000M + 64 21 939 955E [email protected]
Available here until the completion of today’s sessions or call sometime for a chat and coffee
Jason Rogers Partner
James & Wells
Protecting your ideas
What is IP?What is IP?
IP overview
Types of IP protectionTypes of IP protection
Two classes Various forms
Work out what are your competitive advantages
Break them down into following categories Knowledge based Functional aspects Look Brand
Then you know what IP protection/exploitation mechanisms can apply
IP & Competitive PositioningIP & Competitive Positioning
Intellectual asset managementIntellectual asset management
Goal is to manage the ideas, innovations and knowledge of the business to ensure:
Freedom to operate Ability to exclude others Optimisation of returns alignment with business strategy
Creation and captureCreation and capture
In order to capture, you must first be able to identify – know it when you see it
Once identified, must minimise risks of losing it until IP protection issues determined.
IP protection will depend on value extraction path
IP from an investor perspectiveIP from an investor perspective
Ownership Freedom to operate Scope of protection Opportunity
ConclusionConclusion
Resist public disclosures or commercialisation prior to filing for protection
Ensure tidy path to ownership Take steps to protect aspects of
competitive advantage Complete freedom to operate searches
Colin De Freyne
Tax Director
Ernst & Young Limited
Structuring Your IPStructuring Your Export Strategy
Main points for consideration for this topic – why they are important
• How should IP be structured?
• NZ tax issues
• Foreign tax issues
• Sale / exit strategy
Ownership structures
• Typical NZ ownership structures
IP
Qualifying company
(abolished?)
IP
Trust
IP
Partnership
(limited partnership?)
IP
NZ Company
Ownership structures
• NZ Tax issues
– Impact on imputation and IC’s available to attach to dividends
– Double taxation?
– Transfer pricing (cross border transactions between associated parties)
– Managing foreign withholding tax credits (non-refundable)
Good / bad examples and scenarios that you should consider
• Losses and foreign tax
• Sale of IP bundle
• Dividends paid from royalties stream
Export Go Growth Optimiser
What you should do next – in preparation for developing your business plan and investment
pitch
• Business structure / model
• Operations and supply chain
• Effective financing structures
• Income tax / withholding tax management
Colin De FreyneColin De Freyne
Tax Director, Ernst and YoungTax Director, Ernst and Young
09 300 8023
Ramesh PindoriaDirector
Password Ltd
IT Strategy for global growth
IT is Business!
• Aligning IT with Business strategies– Understand business needs– Shared business vision– Need vs. want
• Holistic approach to IT– Business units– Suppliers– Customers
What you should consider
• Collaboration, Mobility, Communicating Globally
• Security• Web Presence
– Company website, Client Portals ,Secure portals
• Compliancy/Regulatory Requirements• System Availability
Challenges
• Second location – centralised or decentralised– Costs, Access, Disaster Recovery
• IT Optimisation• Capacity Planning• Support
– Local and global• Outsourcing, Hosting
– All, part or none
Contact details
Name: Dr Ramesh PindoriaPhone: 021 749 000Email: [email protected]
(And available today until 13:00)
QuotesGeorge Shaheen: “We do not treat Information with the same reverence that we treat human beings or money”Jack Rockart: “The value of IT depends upon how it is used strategically to improve the organization, not on how much it costs”
Holistic Approach to your travel budget
Brendan DruryBrendan Drury
GM FCM Travel Solutions, Stage and Screen, GM FCM Travel Solutions, Stage and Screen, CiEventsCiEvents
Proudly part of Flight Centre
Considerations for today
Travel is one of the top 5 expenses in most businesses
Optimising the Travel budget
Travel and the Internet
What do your employees expect when they travel
Conference Incentives Events
Optimisation of the travel budget
Is the Trip necessary ?
Air / Land Leveraging Preferred Agreements Different Airfare types – flexible/ non flexible Look at overall costs – hotel, taxi, airport car
parking etc Cheap fares - pros/cons
Best Fare of the Day
Promotional Periods Oct/Nov – UK/Europe short life airfares offered
Planning ahead
Management reporting Monitoring travel budget effectivelyChangesLead in time Consolidation of spend
Travel Guideline/ Policy Drives behaviour / Savings Control through authorisation
Credit Facilities
Expense Management tools
Enhanced data through Credit Card
Optimisation of the travel budget
Travel and the Internet
InternetPurchasing Airline, Hotel & Car Rental sites Searching - time is money Travel sites Helpdesk / 24/7
Travel Policy & Staff Expectations
Policy / Guideline As your company expands this will be come more relevant Authorisation pros/cons
Travel Allowance Implement realistic daily allowance Set expectations through Travel Guideline/Policy
Leisure travel tagged onto business trip Managing increasing leave
Customer Care Travel Insurance Danger spots
Airline/Hotel membershipsLounge passes / FFP cards
Visas / Passports Who has what passport ?
Power of Events
Meetings and events DO play a strategic role in driving business within any organisation
Face to face key
A survey, conducted by the MPI foundation concluded that :-
96% of marketing executives use events within their total marketing mix
49% believe the importance of events is increasing
24% believe events provide the best ROI in marketing (18% Web Marketing/15% Sales Promotion/14% PR and 9% Print Advertising)
Role of Events
Incentive continues to grow
The difference between a good event and a great event comes down to a couple of key factors:-
Extending the life of the event
Matching the budget with the recipients
Maintain brand consistency
Show Stopper
Ph + 64 9 638 0200 M + 64 21 919 609 E [email protected]
www.fcmtravel.co.nz
We are happy to talk today or any other time that suits
Brendan Drury
Have You Got The “A” Team?Have You Got The “A” Team?
Mark Robotham
NZTE Escalator Service
People Invest in People
• “I Invest in people not ideas”…. “if you find good people, if they are wrong about the product they’ll make a switch…” Arthur Rock (VC Associated with formation of Intel, Apple)
• “It’s not the strongest species that survive, nor the most intelligent, but the most responsive to change” - Charles Darwin
• Background - Linkage Team and other factors
• Investor Check List
• Leadership & Governance
• Qualify People In
Why The Team?
“The Story”unique proposition
Operating in the
Zone of Passion
“ActionableLive Plan” WHATWHEN
CustomersTalent
Investors
Scaling Teams
Competencies & Skills
Governance
ProductStrategy / Plan
Investment & Exit Model
How do we make $$
© Growth Management Consulting Ltd 2007www.NowStrategy.com
Org. StructureBoard
Business PLan
Non – Action Plan
ChannelsPlan
Communications
Sales
Multiple Hubs - Company - Product x n - People x n
NOW Strategy
Leadership
People
Compelling
NeedBusiness
Model
HO
W
Brand Vision - Culture - Values
Market Validation
Sustainability
Brand Essence
Business That Grow
Investor People Check List
• Team ≠ One person– Virtual teams vs FTE
• Done it before– Fantasy Factor = (Forecast / Actual) ± 20%– Start up and Enterprise experience– Bases Covered ( Core Craft – Sales - Finance )
• Values – Motivation - Exit• Commitment• Coachable – Workable
Ready for Investment?
ROI
Distribution Channels
Competitive Advantage
Compelling Need
Innovative Product
Robust margins
Sustainable
Identified Customer
Management team
Vision
Volume Support
Resilence
Exit
Coachable
Invest
Walk Away
Can Be Fixed
1 2 3 4 5
Adapted from Tom McKaskill
Qualify People In !
• Harnessing Gravity – Creating the “Zone”– Values– Create Purpose and Vision
• Rapid growth– Competency profiling – Lominger
Establishing Advisory Group - Board
• Why– Best people investment– Greatest tool to focus delivery to plan – Power of Virtual Teams– Power of multiple advisors– Long term 3rd party perspective – True independence – principal issues– Break circular reporting models
• What Other Services – Medium Term Advisors do I need?– HR Part Time Management– Sales – Marketing Coaching Mentoring– Financial Management– Incubation ( full suite of services)
AG Makeup
• Complement Management team skills• Traditional (Finance, Legal, Industry)• Different AG for different stages (Seed, early stage, expansion, mezzanine)
• Consistency pays• Empathy with Financial Environment and Dev Stage
– Industry Strategic– Craft Financial– Growth Experience Team Player– Sales & Marketing Time Available– Affordable Compromise Craft vs Business
• Experience ??? Passion• Maximum size• Marque members at appropriate stage
Teamwork = Conflict
• Conflict is central to team effectiveness because conflict is a natural part of the process that makes team decision making so effective in the first place.
• Successful teams use conflict to arouse discussion and stimulate creative thinking.
• Mediocrity occurs when teams choose to "get along“, rather than challenge their assumptions and perspectives
What Makes A Great Deal ?What Makes A Great Deal ?
Mark Robotham
GM Escalator Service
Great Deals
• Deal of what?• Get Real• Great !• Valuation• Forecasts• De Risking Business
Raising Shareholder Value
• Non Equity• License• Strategic Partnership• Joint Venture
• Equity• Capital
Get Real !
• Business or Hobby• Investment proposition• Valuation -> Equity Injection -> % shareholding• Average deal time 6 months – 24 months
– Management overhead 200hrs+• Trances – Milestones - Accountability• Invest in growth potential• Value of professional services – broker• Journey not a destination
Great Deals
• Return worth effort– Better end result than organic bootstrap
• Lost opportunity cost– Realistic (win – win)
• Every one benefits at exit• Increased shareholder value
– Simple– Fair– Maximised market tension – multiple interest– The deal is the beginning not the end
Valuation
You need $1,000,000 dollars to develop a new export market…
You are prepared to give up 20% of your business for the $1,000,000…
This implies:Post money valuation $5,000,000 &
a pre-money (before the investment) valuation of
$4,000,000!
Expected Returns
Company Stage
ROI 5-year Increase in
Capital
SEED 60%+ 10x +
STARTUP 50% 8x
EARLY STAGE 40% 5x
2nd STAGE 30% 4x
NEAR EXIT 25% 3x
Valuation:A risk adjusted estimate of the businesses ability to make money in the future.
Financials –Current & Forecast
Balance SheetCash flow
P&L
Assets:IP
MiscPeople
Track record
Market
Scalability
Etc...
Model
+
Valuation
AssumptionsVariables Benchmarking+ + Risk
Valuation Methods
• Early Stage Space– Market Value / Multiple – EBITA
• Most widely used - market benchmarked value
– Discounted Cash Flow (DCF)
• Reduce Risk = Increased Value
Believable Forecasts
• Sound Assumptions• Backed by action plans• Validated prospect
customers• …
De Risk the business !
• Revenue is King !!• Governance• Credible case studies• Scaleable business• Dependence on key individuals• Experience of team• Strategic partnerships• Licensing deals
Mark RobothamGM Escalator Service 021 61 8850 [email protected]
Tax Considerations for Deals
Vendor
• Generally capital receipt (except taxable for patents [CB26])
• Company – watch:– Related party transactions– Capital gain distributed on
liquidation– Qualifying company
• Consider GST implications on sale
Purchaser
• Depreciable property?
• The copyright in software, the right to use the copyright in software or the right to use software are depreciable
• Patents or right to use patents are depreciable at a SL rate over their legal life.
• Offshore purchaser would need to seek their own specific advice. Some countries may have more favourable treatment than others.
Licensing your IP
• Licensing agreement
Licensor
– Income stream may be a “Royalty” which will be a taxable receipt.
– Definition of “Royalty” is extremely wide.
• Right to use• Supply of knowledge or
information• Supply of assistance
Licensee
– Depreciable intangible property [Schedule 17]
• “Right to use”
Would also need to consider where the ongoing R&D is to take place.
Colin De FreyneColin De Freyne
Tax Director, Ernst and YoungTax Director, Ernst and Young
09 300 8023
Andrew BakerManaging Director
IQ Ideas Ltd
Been there, done that: the experience of raising investment
funds
My experience
• Background• Proof of Concept• Proof of Market Acceptance• Proof of Commercial Viability• Proof of Scalability• Exit Strategy
Phone: +64 9 627 3571Mobile: +64 21 377 644andrewbaker @ IQideas.com
www.IQideas.com miQube™ - another great Kiwi innovation!
Andrew BakerIQ Ideas