Finance Yorkshire Welcome

Finance YorkshireWelcome

www.finance-yorkshire.com


Finance YorkshireTony Parsons - Director


Finance YorkshireWhy are we here this morning?

• Strengthening relationships with stakeholders, partners, intermediaries and clients

• Demonstrating how we are working in partnership with our LEP to support business growth

• Looking to the future

• Dialogue and questions


Finance YorkshireAgenda

• Tony Parsons, Director, Finance Yorkshire

• Alex McWhirter, CEO, Finance Yorkshire

• David Grey - Local Enterprise Partnership

• Seedcorn Case Study – Chris Wright, Faradion

• Business Loans Case Study – Peter Skipworth, Ecus

• Equity Linked Finance Case Study – John Peters, GSE Research

• Questions & Answers


Finance YorkshireAlex McWhirter - CEO


Finance YorkshireWhat we are…

£90m Venture Capital and Loan Fund

Finance sourced from:

£30m European Regional Development Fund

£15m Yorkshire Forward/Business Innovation and Skills

£45m European Investment Bank


Finance YorkshireOur business approach…

• To fully invest the £90 million fund through helping SME’s constrained by finance to grow

• To create a sustainable fund• To be recognised and respected as a key participant in the

SME business and professional sectors• To stimulate demand for finance in our key market

segments • To realise good returns for investors and value for money


Finance YorkshireOur investment performance so

far...• 346 investments totalling over £39 million

• On track to meet economic targets; jobs created & safeguarded; increase in turnover; business starts and private sector leverage

• On track to achieve full investment by December 2014


Finance YorkshireInvestment Profile


Finance YorkshireInvestment impact...

• Created or safeguarded 5620 jobs

• Over £64 million Private Sector Leverage, resulting in £2 levered for every £1 invested

• £44.2 million in value added sales

• Legacy fund to be invested in region’s businesses in line with original objectives - to be utilised after 2019


Finance YorkshireInvestment performance by

location...



location...



sector...Sector Analysis – All Funds

Sector Application Process (%) Investments (%)

Business Services 12% 18%

Engineering / Industrial products / Materials 24% 25%

Financial Services 1% 1%

Healthcare / Pharma / Bioscience 14% 7%

ICT / Software / Telecoms / Media 21% 12%

Leisure / Hospitality 1% 2%

Renewables / Energy / Cleantech 6% 7%

Consumer / Food & Drink 6% 10%

Other 15% 18%


Finance YorkshireInvestment criteria…

• A business with growth potential

• A new start or growing business

• A business unable to source its full funding requirement from the commercial market

• SME’s paying business rates in Yorkshire and the Humber or relocating to the region


Finance YorkshireThree portfolios

• Seedcorn Finance

• Business Loans

• Equity Linked Finance

Finance YorkshireSeedcorn Finance

• Start up or early stage innovative businesses

• Involves strong technological ‘know-how’ and credible founders

• First products or services developed with potential for rapid growth

• Can invest up to £780,000 over the lifetime of the business through equity-based, tranched investments

• Investments of £2m+ when syndicating with other funds


Finance Yorkshire Case Study – Xeros


Environmentally friendly cleaning company backed by Finance Yorkshire Seedcorn Fund. Cleans laundry with vastly reduced water using Xeros polymer bead technology

Major savings in power, detergent and effluent production with superior cleaning

Recently completed a £10 million fundraising from existing and new investors. New funds

will be used to roll out the Xerox commercial laundry cleaning system and finalise the household system

Finance YorkshireBusiness Loans

• Fixed rate loans typically between £15,000 - £150,000 as syndicated or complete financial packages for businesses

• Financial packaging with other forms of debt finance including the banks

• Range of investments include; Working Capital, Capital Expenditure, Investment in Premises and development capital


Finance YorkshireCase Study – Wilson Benesch


Sheffield based company which manufactures high end audio loudspeakers and turntables

Regarded as world class innovator in its field

£50,000 Business Loan which enabled the company to introduce new technologies and buy specialist tooling equipment.

Finance YorkshireEquity Linked Finance

• Equity-linked investments from £100,000 to £2m and Mezzanine loans

• Some start ups, largely growth, development capital or expansion

• Work alongside other finance providers to invest in larger transactions

• Tailored deal structures to give maximum benefit to the investee companies


Finance YorkshireCase study – Fluent

Communications Sheffield based IT lead generation

company. Combines telemarketing, social media and digital marketing for IT sector

£210,000 Equity Linked investment to help triple its workforce in the coming year.

Investment will also help to purchase office equipment, upgrade IT and support working capital


Finance Yorkshire has:

•completed 346 investments

•Invested a total of £39.43m

Seedcorn Finance – 44 investments totalling £7.93m

Business Loans – 270 Investments totalling £15.00m

Equity Linked Finance – 32 Investments totalling £16.50m

Finance YorkshirePortfolio performance to date..



Finance YorkshireOur Investment approach

Working alongside the commercial market;

• Maintaining and developing relationships with financial intermediaries to promote awareness and dealflow

• Market making effect, making deals happen by spreading the risk with other investors and lenders

• Co-investing with other lenders and funds


Finance Yorkshire

David GreySheffield City Region

Local Enterprise Partnership

• One of 24 in the first wave of LEPs – there are now 39 LEPs across the country (100% coverage)

• A genuine partnership between the public and private sector

• Board composition - 19 members: Private sector Chairman – James Newman 10 business representatives, including a University Vice-

chancellor 9 Council Leaders (inc. Doncaster Mayor)

• Seven SCR LEP Sector Groups represent the voice of business

• Strong / productive relationship with Government

The SCR LEP was formed in Autumn 2010

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Priorities set out in our Economic Overview document (updated January 2013)

Our priorities fall into two main areas:

•Maximising the potential of our key growth sectors; and

•Putting in place the foundations for growth.

• Key Principle 1: Leading on issues of Sheffield City Region significance

• Key principle 2: The importance of a true public and private sector partnership

• Key principle 3: Adopting a collaborative approach

• Key principle 4: Driving innovation to promote growth

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Putting in place the foundations for growth

• Economic Strategy / Growth plan – shaping the SCR economic programme in light of proposed devolution of powers / funding (including European Structural Funds)

• Management of the SCR Enterprise Zone (FT ranked ‘number 1’)

• Growing places fund – prudent investment decisions (including JESSICA investment fund)

• City Deal – particularly relating reform of Skills system

Key team initiatives include…

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• Regional Growth Fund programme (‘Unlocking Business Investment’) - £25 million, ~£100m of direct business investment, footprint of 2,000 new jobs by March 2016.

• Inward investment – additionality and generating new leads

• Sheffield City Region Investment Fund (SCRIF) – GVA driving infrastructure investment

• Sector Groups – voice of key industry sectors

…Key team initiatives include

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Finance YorkshireSeedcorn Fund Testimonial

Chris Wright, Faradion

Inves

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Busines

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22/04/23 Faradion Investment Opportunity 32

Kroto centre, University of Sheffield, Yorkshire• Access to the Materials Science and Engineering department• One of the leading departments of its kind in the UK

Location

Inves

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Busines

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Committed to driving down the cost of battery technology For storage of renewable energy For electric vehicles

Faradion`s principal focus is Na-ion battery technology: comparable performance to Li-ion lower cost enhanced safety

Strong IP portfolio

2013: Na-ion battery demonstrator cells within the next 12 months low cost LiFePO4 cathode – early revenues

Recent £500K investmentJan 2013 Faradion Investment Opportunity -

Confidential 33

Company OverviewInves

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Andrew Dixey, ChairmanOver thirty years managing global organisations. Former President and COO of the Titanium Metals Corporation; Director of Special Metals Company; Managing Director of London & Scandinavian Metallurgical Co. Limited; CEO of Atraverda

Dr. Chris Wright, CEOFormer Group Operations Director of AEA Technology PLC, responsible for Lithium battery licensing, and CEO of IP2IPO Ltd (now IP Group). Highly experienced entrepreneur and former executive chairman at Covesion Ltd and Molecular Vision Ltd

Dr. Jerry Barker, CTO Former Chief Scientist at Valence Technology Inc. and inventor on > 90 issued and ~50 pending US battery patents. Inventor of Li-ion active materials: LiVPO4F, Li3V2(PO4)3, LiMSO4F, Li2MP2O7, LiFe(Mg)PO4 and the Carbothermal Reduction (CTR) manufacturing method. IBA Technology Award, 2012

The Team

34Jan 2013 34Faradion Investment Opportunity

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A significant role in creating the company

Helped us get established with premises and links to professional advisers

Provided financial backing for the company

Gave assistance in early days when applying for grants

Finance Yorkshire’s Seedcorn Fund provided invaluable strategic and tactical advice.

Jan 2013 Faradion Investment Opportunity - Confidential 35

Finance Yorkshire’s involvementInves

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Finance YorkshireBusiness Loans Testimonial

Dr Peter Skipworth, Ecus

Finance Yorkshire Business LoansCustomer Viewpoint and

ExperiencePete Skipworth

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Busines

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Presentation – Business Loans My experience and observations of using this type of

finance £15k to £50k for early stage businesses £15k to £75k for established businesses £15k to £150k for established and profitable businesses

In a number of companies Finance Yorkshire (and predecessor fund, South Yorkshire Investment

Fund)

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Environmental Monitoring

Environmental Consultancy

Infrastructure Management

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Busines

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Environmental Monitoring Solutions Ltd www.em-solutions.co.uk “Industry’s Environmental Partner” ~£0.5m t/o in 2009 to ~£2m t/o in 2012 Full-time MD (day job!) backed by South Yorkshire Investment Fund

Inves

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Busines

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Ecus Ltd www.ecusltd.co.uk Environmental Consultants Full development life-cycle

• pre-planning, planning/design, post-completion

~£1.5m t/o – turnaround just returned to pre-recession level Non-Exec Chairman Recent Equity Investment by Finance Yorkshire to go multi-office and ~£5m

t/o

Inves

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Busines

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SEAMS Ltd www.seamsltd.co.uk Infrastructure Management Software and Consultancy co-founder and MD from 2002 – 2009 grew from start-up to ~£3m t/o backed by South Yorkshire Investment Fund

Inves

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Why Finance Yorkshire Business Loans?

They will consider things that the banks won’t .......(or the banks won’t unless there’s lots of security) Often unsecured

Taking the risk alongside the business

Net interest rates only slightly higher than banks They are interested in getting to know the business

and require reporting

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What Have I Borrowed Money For?

Developing the business e.g. A marketing push e.g. Recruitment of BD

(a general requirement for working capital)

New product development e.g. Software

......things which are less tangible than, say, buying an asset

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Syndicating Finance Yorkshire Business Loans funding with:

bank funding

self-funding (from profits)

“All jumping over the edge together!”

Finance Yorkshire Business Loans funding as

part of Equity Investments with Finance

Yorkshire Equity Linked Finance team

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Busines

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Fore-runner to Equity Investment

Finance Yorkshire from £15k to £150k depending on

company’s stage of development So, more one-off projects than game-changing company development

In all 3 cases (EMS, ECUS, SEAMS) this type of

funding has been a fore-runner to Equity Investment

.....”getting to know you”

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Conclusion

A big help along the road of developing companies

Fills a gap in the availability of finance

For growth or difficult-to-fund projects

A stepping stone to bigger things

Will work flexibly and effectively with other funders

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Finance YorkshireEquity Linked Finance

Testimonial

John Peters, GSE Research

January 2011: “…just a kid with a crazy dream”

www.gseresearch.com

Inves

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Busines

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February – April 2011: Too small for PE; too big for angel investors; nothing from banks

www.gseresearch.com

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April 2011 – November 2011: First meetings, many discussions, many plans

www.gseresearch.com

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November 2011: money pit!

www.gseresearch.com

Inves

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November 2011 – December 2012: Frustration. Challenges, expected and not

September 2012: second round investment

www.gseresearch.com

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Busines

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2013: moving ahead – at last

www.gseresearch.com

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Finance YorkshireFuture work…

• Work collaboratively with the Sheffield City Region LEP and Local Authorities

• Creating the next gap fund for SMEs after 2014

• Develop the Finance Yorkshire brand and a recognised provider of growth finance to SMEs


Finance YorkshireMaking an application

• Call us to make sure it’s eligible 0845 649 0000 or make enquiry via website www.finance-yorkshire.com

• An Investment Manager will contact you to discuss.

• Complete Application Form & the supporting information when advised by the Investment Manager.

Finance YorkshireQ & A


Finance Yorkshire Ltd is a company limited by guarantee (Registered No 07075478). Finance Yorkshire Ltd (0845 649 0000) comprises three sub funds, Finance Yorkshire Equity Fund, which is managed by Neon Capital Partners Limited, Finance Yorkshire Small Loans Fund, which is managed by EV Business Loans Limited and Finance Yorkshire

Seedcorn Fund, which is managed by Enterprise Ventures Limited. Each of these Fund Managers is authorised and regulated by the Financial Services Authority.

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