The past month has indicate that a feeding frenzy may be about to begin. Facebook (founded 2004) bought Instagram (2009) for $1 billion. Earlier, Zynga (2007) acquired OMGPop(2006) for $200 million . The feeding frenzy is a result of collective paranoia and greed. Facebook and Zynga recognise that just as they came from no where to being giants of the web so other companies can achieve the same. The strategy appears to be as soon as another company raises its head above the parapet and gain some traction acquire it. The fear stems from a strong belief that unless you are on the curve you will lose the edge and the head space of the target audience who value the new and the different ahead of the traditional values of brand, reliability etc. Innovation is all and Facebook and Zynga know that large companies are always behind the curve. There is a view that Facebook is old school , Zynga not yet but both have the same challenge of remaining on the edge.
Apr
Fear and Acquisitions – what’s coming next?
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Mar
Why Government subsidies won’t make a difference to SME’s
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There is much discussion at the moment about the Banks not willing to lend to SME’s. Government has proposed to help SME’s by subsidising loans to the tune of £20 billion. This will reduce the interest rate on loans made by participating banks by 1%. Is this likely to stimulate the SME economy?
The answer I am afraid is not by much. Our worms eye view at Catalyst is that the problem is not the cost of debt but the absence of debt. There is in effect a binary problem. If your project leaps the banks hurdles then you get the finance if it fails then you don’t. The problem is the that the bar has got higher and higher – what was sensible and fundable in 2005 now fails absolutely – not because the outcomes are different but because of a climate of fear .
I am not arguing for a return to the wild and woolly days merely that the cost of debt needs to reflect the risk of the project. Banks used to pride themselves that they understood risk and could price it. There even used to be what was called mezzanine debt which ranked below senior debt but above equity.
This finance would have interest rates of 15% with an equity kicker. Risk is not binary – often projects do not fail in an absolute sense: the investors may have to wait for a long time to get their money back; debt may have to be rescheduled. Debt providers need to re-learn how to price risk and be more creative with financial instruments.
Mar
How to stimulate economic growth?
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There has been much discussion on the News and in the Press on how to fuel growth in the UK. Most commentators agree that SME’s will be a major source of future growth . So it seems reasonable to ask what is holding back SME’s from growing and diversifying?
Our experience at Catalyst suggests that while many factors affect SME growth and company foundation the major source of constraint is finance. This is both cash flow finance and investment finance. Until this constraint is tackled then removing regulation, providing tax incentives, and creating enterprise zones is merely papering over the cracks.
We at Catalyst have launched two “credit crunch” products: the first through our partner company – Catalyst IFG helps ease companies cash flow constraints. The second our Bond aims to provide investment funding on reasonable terms.
Mar
Top Ten Tips for Equity Fundraising
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At Catalyst we receive many proposals a week from entrepreneurial companies in various stages of growth. Sometimes it’s obvious that the company is on the fast track to raising finance but in most cases there are obvious – and often simple – ways to improve a proposition. Here are my top 10 tips for fundraising;
Mar
Catalyst supports new accelerator programme for green entrepreneurs
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A new Accelerator programme launched by entrepreneur and CEO of Hamilton Bradshaw, James Caan, is offering first class business support and access to multi-million pound funding for the UK’s most innovative green entrepreneurs.
The Berti Green Accelerator programme, supported by James Caan’s Hamilton Bradshaw Impact Partners (HBIP), is searching for three successful low carbon businesses to award six months of first-class business support from HBIP and the opportunity to receive funding of up to £1million each from Berti Investments.
Whilst UK economic growth has substantially slowed since 2008, venture capital investment into the UK’s cleantech sector increased in 2011 for the sixth year in a row, to over £350million. With considerable work still to be done to reach 2020 carbon reduction targets, significant opportunities lie ahead for green entrepreneurs.
Berti Investments believes the low carbon sector can drive impactful growth that serves a triple bottom line: profit, people and planet, but green entrepreneurs need access to the right kind of business support and finance in order for this to happen.
The Berti Green Accelerator programme is open to any conceptually good, low carbon UK business with growth potential and a proof of concept. The three successful businesses will have to demonstrate that their business aims to tackle climate change by sustainably reducing carbon emissions.
James Caan, founder and CEO of Hamilton Bradshaw said:
“The Berti Green Accelerator programme has been developed by Berti Investments and HBIP following a shared commitment to making a difference through impact investing. The programme combines my desire to seek out and support potential high growth businesses with my interest in impact investing.
“The impact investing market place is growing, but many entrepreneurs struggle to become investment ready due to lack of experience or knowledge about certain aspects of their business, such as financial or operational know-how. The Berti Green Accelerator programme tackles this by blending bespoke business support with access to capital. It’s what we call intelligent capital.”
Jeremy Leggett, Berti Green Accelerator judge and founder and Chairman of Solarcentury said:
“Renewable and energy efficiency technologies will have to replace fossil fuels far faster than most people currently anticipate. In the UK, we have the potential to source all of our primary energy from renewables, such and solar photovolatics, wind and marine technologies, but to do this we need an explosive growth in all renewable and energy efficient technology markets.
“The UK needs fast-growing domestic renewable energy businesses more than ever, and programmes like the Berti Green Accelerator, that provide investment and support for cleantech businesses, are vital for encouraging growth and stimulating this sector.”
Applications for the fund are now open with a closing date of 17th April 2012. Shortlisted candidates will pitch to a Dragons’ Den style panel of judges including James Caan, Jeremy Leggett (Founder and Chairman of Solarcentury), Michael Liebreich (Founder and Chief Executiveof Bloomberg New Energy Finance) and Jacques Tredoux (Berti Investments).
Mar
Alpha Tech Fest 2012
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Richard Turner will be taking part in ALPHA TECH FEST 2012
LONDON, 16th March 2012
The Annual Festival for tech ventures looking for funding & growth
The Alpha Tech Fest brings together venture capitalists, angel investors and ground-breaking tech ventures every year to discuss funding options and to build their network in an informal setting.
This year, the fest has the opportunity to host leading VCs; seed, early & mid-stage investors and venture directors who have actively been investing over the last year.
WHY ATTEND?
More and more VCs and investors are following a model of progressing discussions with ventures whom they have met and had an opportunity to learn more about. Having a business plan submitted by email hardly has the same impact as a face-to-face interaction.
At Alpha Tech Fest 2012, all participating ventures have their own allotted interaction space, so investors & visitors can look them up for an initial chat. VCs and angels will also be taking the time to have focussed interactions with each participating venture through scheduled investor tours.
These initial meetings could form the basis of follow-up conversations and meetings – attend ATF2012 to draw attention to your ambitious ventures and network with the best in the field.
WHAT WILL BE THE FORMAT?
Once you are registered to participate in ATF2012, the organising team will be in touch to discuss on-day logistics and scheduling for the investor tours – both for tech ventures and investors.
Read more at: http://alphaversion.co.uk/atf-2012.html
TICKETS
- Book to be a participating tech venture at the fest: http://alphaversion.co.uk/atf-bookings-ventures.html
- Bookings for visitors: http://alphaversion.co.uk/atf-bookings-visitors.html
- Bookings for VCs and Angel Investors: http://alphaversion.co.uk/atf-bookings-investors.html
Mar
Green Motion in supply deal with Nissan
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New low cost quick charge unit launches at the Geneva Motor Show
A supply agreement between Nissan and Green Motion will see Nissan’s new rapid charging technology, which can power up an electric vehicle in under 30 minutes, sold in the UK and Europe under the Green Motion brand.
The agreement will speed up the installation of thousands of ChadeMo quick charging stations in theUK, making it one of Europe’s most electric-car-friendly nations.
The move to electric transport is now well underway. For widely documented reasons of dwindling oil reserves, desire for cleaner cities and future energy security, electric cars have now entered mainstream mass markets.
The agreement between Nissan and Green Motion brings together unique software and hardware technologies that are vital to the emergence of quick charging in the public space.
Green Motion has developed the software that makes charging devices ‘smart’, enabling networks to connect, validate usage and transact revenues. This is essential in order to deliver necessary commercial ROI viability to the private sector corporations, supermarkets, filling stations, motorway services and city parking lots that will seek profit from their operation. It is anticipated that up to 90 per cent of investment intoUKelectric vehicle charging infrastructure will be from the private sector and will therefore need to be revenue-generating. Only the first ten per cent will come from public funds.
Nissan’s newChadeMoDCquick charging hardware is also game changing. Until now quick charging devices and their installation were too expensive for widespread use. However, reducing size, complexity and by manufacturing in high volume, Nissan has brought prices to within half the cost of competitive units.
The move to quick charging is widely seen as the tipping point for electric cars sales. In order to secure early agreement on technical and safety issues across all new electric vehicle platforms, OEM manufacturers and suppliers formed a 165 member strong association. The work of the CHAdeMO Association (meaning ‘charge on the go’) has now delivered the single rapid charging protocol that underpins the necessary infrastructure roll out.
About Green Motion – GreenMotion develops and manufactures charging stations, core electronics and a suite of online software management tools, designed for charging station operators and owners of electric vehicles. The company began in January 2009 in Lausanne,Switzerland and has since expanded its operations acrossEurope. The company has manufacturing, installation, servicing and sales operations in theUK.
For more information please contact Stewart Mckee, managing director, Green Motion (UK) Limited.
Tel: +44 (0) 84 53 01 76 80/mobile: +44 (0) 78 80 89 84 99.
Email: stewart@green-motion.co.uk
Feb
Why single invoice factoring is the modern working capital
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Catalyst IFG started offering single invoice factoring 2010. This kind of finance benefits all kinds of business but especially those with lumpy or unpredictable cash flow. It’s a really useful tool for supporting cash flow – exceptionally quick to arrange and unlike normal factoring or discounting requires no long term commitment.
When we started promoting this funding option it was an almost instant success. The finance community – including banks and other factoring companies – were very supportive. This is something completely different to what they offer and is no threat to their business. Basically we fill a need which has historically been ignored.
In its first year Catalyst IFG factored close on £1m of invoices and provided almost £750k of vital working capital finance. Since the start of 2012, the rate of growth has accelerated sharply.
Awareness of this option is growing and business owners and managers are increasingly scared of the traditional funding options. Apart from the fear that requests for credit will be turned down anyway (computer-says-no syndrome!) the amount of time and bureaucracy needed to reach that conclusion is a real problem. And there are too many horror stories of facilities being withdrawn for no obvious reason and with little or no notice.
At Catalyst we do all our own underwriting so a decision can always be made on the spot. As a result we can complete deals incredibly quickly. I have done two deals already this year which have gone from first phone call to money-in-the-bank in less than 24 hours. It is unusual for a transaction to take more than a week to complete.
Single invoice factoring has been a lifesaver for many of Catalyst IFG’s clients.
One of our clients is a £2m business in the construction sector with a good trading history but no bank facilities. We took this client on last August and since then the business has almost doubled in size. The owner has been able to accept contracts which he would previously have turned down for lack of working capital. When I visited the owner in January he was extremely grateful for our support – “to be honest, Jeremy” he said to me “if it hadn’t been for you, our business would have been toast last year!”
Instead they are looking at a record year in 2012 and improved profitability.
Catalyst IFG has clients in a wide variety of sectors – construction, recruitment, transport, public service, IT to name but a few.
I feel really proud that we have been able to help so many businesses to survive and prosper. At the moment there are very few options out there and the traditional funding sources are routinely letting people down. In many cases, businesses feel abandoned so it is a real privilege to be able to help turn things around.
To discuss how Catalyst IFG might be able to meet your working capital needs please contact me: Jeremy Lawrence on 0845 528 0788.
Feb
Do I need a pipeline analysis?
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The objective of pipeline analysis is to permit effective sales monitoring and project cash flow and profitability of the business. Once the sales team develop a feel for the analysis then it is possible to establish future sales and hence cash slow with a considerable degree of certainty. A pipeline analysis is a working document which should be revised weekly. Devising a pipeline analysis has three elements:
- Defining key stages. Key stages are very market dependent and definitions need to carefully judged. Once defined they must be strictly adhered to.
- Assessing timing. As with key stages this depends upon an in depth knowledge of the target market and individual customers.
- Preparing a projection. This is a mechanical exercise that can easily be prepared on a spread sheet.
Key Stages
A target client moves from 1-10 in the sales process.
| Probability | |||
| 1. General Interest | This is an expression of interest resulting from press/ pr, contacts etc. This has a probability of 0% but is defined as a suspect to be followed up by the sales team. The suspects’ details should be captured in a suspect list and included in any on going marketing communications campaigns | 0% | |
| 2. Establish Need | After a meeting or a telephone conversation in which the customer requirements are identified. It is essential at this stage to identify the person in the organisation who has the authority to make the decision to place an order | 10% | |
| 3. Money Allocated | Client has identified funding within his budget or obtained budget approval | 20% | |
| 4. Request for Quote | Target asks for a quote | 30% | |
| 5. Competitive Bid | Judge according to knowledge of competitors but normally give probability according to number of serious tenders according to number of serious tenders | ||
| 6. Non Competitive Bid | 50% | ||
| 7. Entered negotiation | 60% | ||
| 8. Offer accepted | 70% | ||
| 9. Contract Accepted | 90% | ||
| 10. Contract signed | 100% | ||
Assessing Timing
The average sales cycle for service products is on average 6 months from initial contact. This might be as long as 12 months for larger more expensive projects. Once a target enters the sales cycle each stage must be carefully monitored and timings to completion estimated.
Preparing a Projection
A typical spreadsheet is set out below. As noted above these are working documents and should the bible to the sales team and the basis of all reports to the board.
Sales and Pipeline Analysis
| Notes | Target Client | Value | Stage/
Probability |
Jan | Feb | Mar | Apr |
| 1 | Big Co | 150,000 | 10/100% | 150,000 | |||
| 2 | American Co | 100,000 | 3/30% | 33,000 | |||
| 3 | Small Co | 25,000 | 7/70% | 17,500 | |||
| 4 | Medium Co | 50,000 | 2/10% | 5,000 | |||
| 5 | Total | 150,000 | 17,500 | 33,800 |
Notes
- Big Co might require significant additional services later in the year. JT is meeting with AH to discuss next month after installation.
- JT has good relationship with MD.
- etc
Download this article or have a look at our resources section for other articles and White Papers
Richard J Turner
Catalyst Venture Partners
Jan
New roles from Catalyst Talent
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Catalyst Talent is a search company that specialises in matching entrepreneurial leaders to exciting business opportunities. Catalyst Talent is a spin out from Catalyst Venture Partners and has been created to provide the type of individuals needed to lead fast growth companies. The latest roles available are listed below. Please contact Ian McAnearney on 0207 1831069 to find out more about the roles or visit Catalyst Talent to download the job descriptions.
EVP Operations – London based
The EVP – Operations will be a key member of the executive team, and will participate in the Management Board, as well as the Leadership Team. The EVP – Operations will have responsibility for profit and loss for the regions and will be responsible for c 4 direct senior Regional Director reports. The key focus of the role will be on developing the commercial/corporate leadership capability within the regions, improving profitability of the Region and Global P & L, the introduction of a stronger more cohesive global delivery model, improved organisation of resources through the introduction of global competency centres and networks, capitalisation of the knowledge and capability to give us the leading edge in the market in terms of profit performance, quality, delivery and customer satisfaction. Read more >
EVP Operations in Renewables – Bristol
The EVP – Operations must be a proven leader who can set a direction, for and with a senior team. Acting as a strong number 2 within the business, the candidate must demonstrate a strong personality and gravitas, and will naturally gain the buy in and support of the Regional “Heads” and will comfortably educate and direct the team. Strong operations and commercial focus, balanced with the ability to ensure consistency in processes and standards across the organisation. Working in a complex environment, the candidate will be set high standards of performance and targets for the team, and primarily focus on delivery of results and growth within the division. Read more >
Head of Client Service Centre
The primary role of the Head of Client Service Centre is to ensure the retention and growth of the existing business; developing a rapport with clients that will continually improve the relationship and present products and services to meet clients’ existing and future needs. It requires working with the sales team and other managers to increase sales opportunities and thereby maximise revenue for the organisation. Read more >
