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UK Oil and Gas IndustryVenture Capital Fund
Nova Technology Fund
1. SUBSTANTIAL IMPACT ON COSTS OR HSE IN THE NORTH SEA
2. BRITISH IDEAS TO BRITISH PRODUCTS
3. CASH RESOURCE TO SMES
4. TECHNICAL & BUSINESS MENTORS
What VCs Want
• INNOVATIVE PRODUCTS / SERVICES
• EXPERIENCED MANAGEMENT TEAM
• PROPRIETARY IPR
• CLEAR ROUTE TO MARKET
• SUSTAINABLE BUSINESS PROPOSITION
• EXISTING REVENUE STREAM
What about my company?
• Some companies are life-style businesses
(Good living & job satisfaction but unlikely to supply the growth & ROR)
•Entrepreneurial businesses have aspirations and good potential for growth. (They have experienced and ambitious teams)
“Normal” Development is about 6 years to a Mature Company
SEED
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6
START-UP
EARLY STAGE
EXPANSION
MATURITY
GROWTH
SIZE
Business Development Focus (High Growth Means Rapid Change)
Technology
Operations
Marketing
Competition
Seed Start-up Early Stage Expansion Growth Maturity
Relative Importance
Source of leads
0%
5%
10%
15%
20%
25%
30%
35%
Source of leads
Personal contactsAAM / AMJNova presentationsLaunch advertisingEnterprise AgenciesDDATrade FederationsITF
Clusters of Innovation
Innovation in the North East
• 40% BELOW UK MEAN (DTI)
• 33% LESS SPEND ON R&D (DTI)
• 32% LESS GRADUATES IN WORKFORCE (DTI)
• HISTORY OF HEAVY INDUSTRY
• OVER RELIANCE ON INWARD INVESTMANT
• POLITICAL FOCUS ON JOBS NOT INNOVATION OR VALUE
Type of Company
0%
5%
10%
15%
20%
25%
30%
Type of company
ServiceManufacturingConsultancyUniversity spin-offSoftware house
Age of Company
0%
10%
20%
30%
40%
50%
60%
Age in years
Less than 12 years3 years 4 years5 years 6 or more
Technology
9%
3%
3%
24%
39%
7%
15% Exploration
Reservoir Eng.
Drilling
HSE
Facilities
Decommissioning
Business processes
Typical Company Profile
• Based in Aberdeen, Edinburgh-Glasgow belt or London area
• Less than 3 years old
• Independent, not a member of a trade federation
• High proportion of university graduates in team
• 15% chance of a university spin-off
• Probable SMART award
Rejections (Commercial)
0%
5%
10%
15%
20%
25%
30%
35%
Management teamIPR issueBusiness propositionCompany structureHigh riskMarket acceptanceSME rejected offer
Guidelines for Success
• Stick to the knitting• Common philosophy,
goals & quality standards
• Avoid information overload
• Build your team• Cash flow• Anticipate problems
• Keep investors & advisors informed
• Watch your costs• Do not anticipate sales• Develop a network• Look for opportunities
but discuss with investors.
VC Investment – Scotland£ millions: Jan 2000-April 2002
0
20
40
60
80
100
120
140
160
180
200
SoftwareBiotechOptoelectronicsOtherEnergyElectronicsCommunications
0
0.25
0.5
0.75
1
0 1 2 3 4 5 6
Time (Years)
Mat
uri
ty I
nd
ex Ready to use
Mature Technology
Technology Maturity
IdeaResearch
Development30
%
70%
Business Needs Ranking (Subsurface)
0
2
4
6
8
10
12
14
16High resolutionimagingLow permeabilityproductionIncreasing recoveryefficiencyUncertainty analysis /understandingReservoir simulation
Well seismic
Brownfield wellmanagement
Business Needs Ranking (Wells)
0
2
4
6
8
10
12
14
16Brownfield reservoirmanagementCost effective wells
Accessing brownfieldpoolsDrilling depletedreservoirsNew field reservoirmanagementSubsea intervention
HPHT
Business Needs Ranking (Facilities)
0
2
4
6
8
10
12
14
16
Subsea developmentReliabilty / uptimeEmissions controlCost reductionDebottleneckingMetering / allocationSand managementHPHTIsolated fields
Nova Technology FundBarry HoodE-mail: [email protected]
Nova Technology FundExploration HouseAberdeen Offshore Technology ParkABERDEEN AB23 8GX
Tel: 01224-705741Fax: 01224-705841