The document provides information on obtaining investment for a business, noting that only 2% of business plans submitted to angels are funded, and outlines common reasons for rejection including lack of skills, no market opportunity, unproven concept, and inadequate financial returns or exit plan. It then discusses what investors look for in a successful investment, including a skilled team, big market opportunity, proven idea, scalable business model, and adequate financial returns within 3 years. Finally, it provides tips on strengthening an application, such as seeking strategic advice to improve chances of producing a high-growth business.

1. Welcome
From Idea to Investment Workshop .
1

2. Want investment….?
Only 2% of those • 60% are rejected after a
30 minute review
who submit • 25% are rejected after a 3
business hour appraisal
plans/applications • 10% are rejected after a
full day evaluation
to Business Angels • 3% are rejected following
get funded. failed negotiations
• 2% succeed in raising
funds
Source- Envestors.
2

3. Still want investment….?
• Lack of skills/ credibility in the
management team- No unfair
advantages
• No Market opportunity-
Business Plans/ “reinvented the wheel”
applications to business • No proof of concept.
angels are rejected • Business Model Not scalable
because… • Forecasts based on unproven
assumptions
• Business Model too complex to
execute
• Inadequate financial returns ( 10X
within 3 years?)
• Lack of trust
• No clear exit route
• Too Early…. But with work… ??

4. ..then ask for advice
Only 8% of all But… This 8% of
SME’s ever seek small businesses
strategic advice account for 43%
and support of all High Growth
businesses
Source- Dept of BIS 2011 report on growth companies Potentially those who seek strategic advice have a 18 times greater
chance of producing a scalable business.
4

5. Investors want ….?
1. Skilled and credible management
team
Investors want to find.. 2. BIG Market Opportunity- a big
problem for a potential large set of
customers that you can solve?
3. The Idea/ Prototype to be proven
and market validated.
4. No Technical Risk
5. Evidence that the Business Model is
both repeatable and scalable.
6. Business Model ready to execute
7. Road Map & Forecasts based on
proven assumptions
8. Adequate financial returns ( 10X
within 3 years?)
9. People they can trust/ work with
10. A clear exit route- How will they
claim there reward??

6. What is a Scalable Start-Up?
“a start-up is an organization formed to search
for a repeatable and scalable business model”
- Steve Blank- “4 Steps to an Epiphany”
“an organization dedicated to creating
something new under conditions of extreme
uncertainty”- Eric Reis- “Lean Start-up”

7. Start-up Growth Pathway
50
40
30
20
Income
10
0
0 2 4 6 8 10 12 14 16
-10
-20
Investment

8. “There is an opportunity gap when the scope
for growing income at a very fast rate is
limited for those who have too little to invest
, but expands dramatically for those who can
invest a bit more.”
Banjaree &Duflo- Poor Economics

9. Two Types of Start-up Risk
Technical Risk Market Risk

10. Investors do not want…
http://youtu.be/QoAOzMTLP5s?hd=1

11. Technical Risk- The Test?

12. Importance of Team
“Jockey Not The Horse… Y-Combinator
12

13. Investors want…
http://lockerz.com/d/10264659

14. A Good business is often based on
…
Unfair Advantages
14

15. Attempts to Premature Scale is the
No 1 reason that ambitious
business start-ups fail.- Source Start-up
Genome.
See Steve Blank, Four Steps to the Epiphany

16. From Space to Model Questions
Space Questions Model Questions

17. Importance of FIT
Problem Solution
17

18. Idea to Prototype.
http://www.bus
inessmodelgene
ration.com/dow
nloads/value_pr
oposition_desig
ner_draft.pdf
18

19. Importance of Business Model
“A business model describes how your company
creates, delivers and captures value”
Or in English:
“A business model describes how your company will
make money”
Need a “proven” business model determine Market Risk.

20. http://www.businessmodelgeneration.com/

21. http://www.boardofinnovation.com/business-revenue-model-examples/
http://www.slideshare.net/AnnaPietka/e-commerce-new-business-models-
14291829
Examples of the top 10 Business
Models in 2011- 2012
21

22. Go Lean!!
“Lean Start-up is about
reducing market risk by
working out how to fail
fast”
22

23. www.be.foundercentric.com

24. The competition- your customers
perspective?
• Incredible Ignorance
• Dr Do nothing
• Mr Do it myself
• Superman ( What’s
their kryptonite)
• Boy in costume
Who are you competing
against for your customers
attention?
24

25. Customer Relations- Where there is
Love there is growth?
Love = Growth
• Viral (Co-efficient of 1)-
Customers love you so they get at least
one other person to use/ buy i.e.
Facebook, Spotify
• Customer Acquisition- You pay
£££ to market your product and the
profit from the customers you gain is
greater than the marketing costs???
(N.B. Margins often need to be high)
• Stickiness- Customers “love” you so
they keeping coming back for more e.g.
Apple- MacDonalds.
25

26. Business- Customer Flow Metrics
Motivation/ Want
Awareness
( Click-throughs)
Search/
Measure Find
Conversion Rates Acquisition No of Enquiries/Visits
Activation No of Registrations/ Beta
Downloads
Distribute/ Deliver Evaluate/ Validate
Referral/ Repeat Use Analytics ( Share rates)
Revenue Buy ( share rates)
Distribute/ Deliver Achieve (Customer
Satisfaction)
Evaluate/ Validate
A Market Validated Business Model is one which is
proven to be repeatable and potentially scalable. 26

27. ll
How are you going to make money?- The revenue model.
- Traditional- (user = paying customer)
- Advertising Model- “The customer is the product”
- Split Revenue model- supplier and you split customer fees.
- Two Sided model- Customers and suppliers fund ( directly
or through advertising)
- Multi- facetted model- Many income stream options.
- Freemium Model- Free to use up-to a point
- Network Model – (Achieve scale & let someone else
monetise).
27

28. Market Validation Pathway
Alpha BETA Full Launch
•Closed set of •Open set of customers •Full PR & Marketing
customers- usually •Validate the business •Maximising revenue
friends models •Building Brand
•Agile design •“Smoke Test” •Building Capacity
•Falsify the KPI’s •A/ B Test
•Pivot
28

29. Proving the Business Model Key
Milestones
• Human Resources - Hiring key people that will make a huge impact on your organization (not just
employees for workload purposes, but like a shit-hot marketing person, for example).
• Product – MVP- Beta- First Pivot-Full Launch- On-going Iterations
• Market – Market validation. As in, first customers, or first paying customers, etc
• Funding – Maybe some money being committed to a round that the investor in question can lead
or participate in.
Other examples of milestones include*:
• Proof that you can work together as a team, usually historical evidence
• Proof that you can build something, i.e. working prototype
• Proof that it’s useful to someone – first users and clients
• Proof that you can talk to investors – every financing round, even small ones
• Proof that you can talk to audiences – 100k users or 1M users or 10M users…
• Proof that the initial team is able to attract talent –
• Proof that ecosystem agrees with your ideas – bringing respected industry advisors partners on board
• Proof that there is market – £1M annually/ Proof that the market is big! – £25M annually and beyond
• Proof that you can manage your finances – cash-flow positive operation
• Proof that you can scale – £10M annually
29

30. Runway Length?
• How much/ little money is
needed to set-up the
business, get a MVP product to
market, cashflow the runway and
resource the company until
break-even.
• Going to need a
Budget, Cashflow/P&L
forecast, (Valuation Model &
Term Sheet)
30

31. Not Too early for investment if …..
• You have proven the concept- Product/
Problem fit.
• You have proven your business model-
Product+ Model? Market fit.
• You have a team/ partners in place that could
help you scale?
31

32. www.ngfc.org.uk

33. • Bootstrapping through Personal resources (time and money = sweat equity you are investing)
• FFF- Family Friends & Fools – People who will give you funds with little questions asked
including reward based crowd funders such as Peoplefundit.
• Government Grants
• Customers and Suppliers- “Build slowly at low risk by obtain credit from suppliers and
growing business through profits from paying customers”
• Loan providers- “Increase business growth ambitions by increasing investment by taking out
debt”
– Banks ( Overdraft-unsecured and secured loans)
– Community Finance Institutions ( Soft/ unsecured loans for riskier ventures)
– Leasing Companies.
– Invoice lenders (Factoring, invoice discounting)
– New loan markets such as Market Invoice and Funding Circle.
• Investors-
– Private Investors- Business Angels such as Angel Capital
– Venture Capitalist
– Crowdcube
– Government Backed Investment Funds
Matching the right mix of sources to the right stage and type of finance is the key to successful
fundraising
www.ngfc.org.uk

34. Step 3- Match the funding need to purpose?
www.ngfc.org.uk

35. Where do NGFC Figure 1. 4 Steps to developing
members fit
www.ngfc.org.uk

36. Information:
• Capital Enterprise What’s On in London- www.capitalenterprise.org/whats-on
• Business Link - www.businesslink.gov.uk
• Start- up Britain - http://www.startupbritain.org
• British Library- www.bl.uk/bipc
• Bootlaw- http://bootlaw.com/
• HMRC Small Company Enterprise Centre- Source of advice and help
http://www.hmrc.gov.uk/manuals/vcmmanual/VCM10050.htm
• HMRC R& D Tax Credits www.ucl.ac.uk/advances/advances-news/hmrc
• HMRC Guide & Support- http://capitalenterprise.org/guide-to-rd-tax-credits
• British Business Angel Association: www.bbaa.org.uk
• Guide to Early Stage Investment:
http://www.paloalto.co.uk/about_us/Early_Stage_Investment_by_Alan_Gleeson.pdf
• Start-ups on Air at Google Campus-
https://docs.google.com/spreadsheet/viewform?formkey=dEpuYlRFRFJ6SUVDdHVLRms3YmdBcmc6MQ
• Hubventurelabs - http://hubwestminster.net/hubventurelabs
• Guide to 100 offers for start-ups – www.capitalenterprise.org
And if you have not checked them out please look at the latest schedule of advice and training events at :
www.ngfc.org.uk .
www.ngfc.org.uk

37. Need less than £10K to start?
Grant-
www.j4b.co.uk
No Funds
New Enterprise
Unemployed?
Allowance Scheme
Need Less than
£10K to Launch a Self Fund
business Community
Development
Write a simple Finance Institution
Borrow Business Plan & 12
month cashflow
Bank
- Sources of Grants- www.j4b.co.uk
- Competition funding £1000 issued to 10+ businesses per month- http://www.shell-livewire.org
- Princes Trust http://www.princes-trust.org.uk/need_help/enterprise_programme.aspx
- £1000- £10,000 Enterprise Loans for Under 25’s- www.startuploanslondon.co.uk or www.startuploans.com
- New Enterprise Allowance Scheme – Check who delivers the scheme in London by e-mailing Capital Enterprise.
- Community Development Finance Associations- http://www.cdfa.org.uk - Also check out North London Community Finance
- ELSBC Access to Finance – Business Plan support for those looking to raise up to £10K
• Soft loans for Creative Businesses- http://www.creativeindustryfinance.org.uk/
www.ngfc.org.uk

38. Funding Product Development
Grants & Awards General
• J4B- Portal for grant finding http://www.j4b.co.uk
• Technology Strategy Board ( R&D Funding) - http://www.innovateuk.org -
http://www.innovateuk.org/content/competition/grant-for-rd-single-business.ashx
• Knowledge Transfer Networks- www.innovateuk.org
• London European Enterprise Network- http://www.een-london.co.uk
• E Funding for SME R&D - http://www.eurostars-eureka.eu/what.do
• EU Funding for R&D collaborations: http://ec.europa.eu/research/participants/portal/page/calls
• Knowledge Transfer Partnerships funding support- http://www.ktponline.org.uk/ktp-what-will-it-cost-
my-business
Translation/ Follow on research funds.
• www.rdfunding.org.uk/bulletin/queries/Search.asp?TheCloseMonth=July&TheYear=2011.
• http://www.rcuk.ac.uk/kei/ktportal/Pages/Followon.aspx
• https://ktn.innovateuk.org/web/145175/overview
• http://www.ahrc.ac.uk/FundingOpportunities/Pages/BrowseOpportunitiesOld.aspx
• http://www.ahrc.ac.uk/Pages/default.aspx
• http://www.theculturecapitalexchange.co.uk/

39. Funding the Runway
Accelerators : Training & Mentoring programmes that provide fast-track to seed funding for
Scalable new businesses
• Lean Start-up : - http://be.foundercentric.com/
• Start-Up Weekend: http://london.startupweekend.org
• Launch 48: http://launch48.com
• Tech Hub : http://www.techhub.com – Google Campus- http://www.campuslondon.com/
• FIG- http://www.findinvestgrow.com/
• Y-combinator- http://ycombinator.com/
• Tech Stars- http://www.techstars.com/
• Seed Camp: http://www.seedcamp.com ( Applications open)
• Hackfwd: http://hackfwd.com
• Emerge Venture Labs- http://www.theemergelab.org
• Ignite 100- http://ignite100.com
• BBC Worldwide Labs- http://www.bbcworldwide.com/digital/labs.aspx
• Springboard- http://springboard.com/ - http://www.f6s.com/profile/1961#programs/ajax-application
• Student Start-ups- http://studentupstarts.com
• Accelerator Academy- http://acceleratoracademy.com
• Fintech Innovation Labs- https://www.fintechinnovationlablondon.co.uk/about.html#4
• Wayra- http://wayra.org/en/wayra
• Euclid Opportunities- ( Fin Tech Only) http://euclidopportunities.com/
• Nreduce- Virtual Y-Combinator- http://nreduce.com/
• Innovation Warehouse- http://www.theiw.org
• Healthbox- http://www.healthboxaccelerator.com/
• Collider12- http://collider12.com/
www.ngfc.org.uk

40. Crowdfunders
Crowd funding Platforms-
Reward based Crowdfunding platforms- will help you to raise funding to build a proto-type and market test a
great idea or product.-
• www.kickstarter.com (USA)
• www.indiegogo.com (USA)
• www.peoplefund.it
• www.sponsume.com
• www.pleasefund.us
• www.wefund.com
• www.pozible.com
• www.crowdfunder.co.uk
Equity/ investment Crowd funding platforms:
- www.crowdcube.com
- www.seedrs.com
Also check out the Crowdfunding Accelerator- http://www.eventbrite.com/edit?eid=4402024574

41. Business Angels
Angel Investment - £100-500K Seed Investment
• NESTA - www.nesta.org.uk/investments
• British Business Angel Association- www.bbaa.org.uk
• Capital 4 Enterprise- http://www.capitalforenterprise.gov.uk/portfolio
• Angel Co-Fund- http://www.angelcofund.co.uk/
Capital Enterprise top 10 Angel Network in London
1. London Business Angels: http://www.lbangels.co.uk
2. Oxford Early Investments- http://www.oxei.co.uk/about.php
3. Envestors- www.envestors.co.uk
4. Finance South East- www.thefsegroup.com
5. Angels Den- www.angelsden.com
6. Venture Director- www.venturedirector.com- www.boundarycapital.com
7. Start-up Funding Club- http://www.startupfundingclub.com/
8. E100- London Business School -
http://www.london.edu/facultyandresearch/subjectareas/strategyandentrepreneurship/enterprise100.ht
ml
9. #1 seed- www.number1seed.co.uk
10. Ascension Ventures- http://www.ascensionmedia.com/ascension-ventures.php
For an alternative list check out- http://www.designcity.co.uk/angelnews/edition_94.htm#article1

42. Specialist Funds
Women
- Stargate Capital- Trapezia- http://www.stargatecapital.co.uk/trapezia_1.aspx
- FSE- Incito- http://thefsegroup.com/investors/business-angels/incito-ventures/
- Aspire Fund - http://www.capitalforenterprise.gov.uk/files/Aspire%20Information%20Leaflet%20(v%202)%20Flyer%20brochure.pdf
Green
- Bridges Sustainable Fund- http://www.bridgesventures.com/sustainable-growth-funds
- Ingenious Media- Cleantech Fund http://www.ingeniousmedia.co.uk/investments/investment-
opportunities/clean-energy
- Carbon Trust- http://www.carbontrust.com/about-us/our-investments
- Low Carbon Accelerator- http://www.lowcarbonaccelerator.com
- CT Investment Partners- http://www.ctip.co.uk
- Wellington Partners- http://www.wellington-partners.com/wp/index.html
Social
- Big Society Capital- http://www.bigsocietycapital.com
- Sources of Social Finance- http://www.bigsocietycapital.com/finding-the-right-investment
- Bridges Venture Fund http://www.bridgesventures.com/social-entrepreneurs-fund
- Big Issue Investment- http://www.bigissueinvest.com
- Social Finance- http://www.socialfinance.org.uk
- Social Investment Fund- http://www.thesocialinvestmentbusiness.org

43. SEIS- Tax breaks to encourage investment in start-ups
Seed Enterprise Investment Scheme-SEIS is a tax break launched in April 2012 for UK
tax payers to encourage them to buy shares in start-up companies registered in the
UK
The Facts:
• SEIS investors can input £100,000 in a single tax year rising to a maximum £150,000 over two
or more tax years in to a single company
• Investors cannot control the company receiving their capital
• Investors pick up 50% tax relief in the tax year the investment is made, regardless of their
marginal rate.
• In the 2012-13 tax year, tax payers can roll any chargeable gain in the tax year in to a SEIS
with a full capital gains tax exemption (another 28%)
• The business must be a start-up company -registered in the UK within 2 years of claim.
• The company must not employ more than 25 workers.
• The company must have assets of less than £200,000.
• The company has to trade in an approved sector – generally not in finance or investment, for
example, a property company raise capital as a SEIS.
www.ngfc.org.uk

44. Early Stage VC’s & Supper Angels
Accel Partners: Stage agnostic, see their portfolio here. • ACT: Early to mid-stage, see their portfolio here.
• Bloom Equity: Early to mid-stage angel syndicate, see
Anthemis Investment- Stage Agnostic, see portfolio here their portfolio here.
• DFJ Esprit: Early to mid-stage, see their portfolio here.
Balderton- Stage Agnostic- See there portfolio here
• Charlotte St: Early to Mid Stage, see there portfolio here
Eden Ventures- Early- mid stage – see there portfolio here • Dawn Capital: Early to mid-stage, see their portfolio
here.
Index Ventures: Stage agnostic, see their portfolio here. • Notion Capital –
• Doughty Hanson- Stage Agnostic, see portfolio here
Passion Capital: Early Stage, see their portfolio here. • Seraphim Capital – Early-mid stage see there
portfolio here.
Delta Partners: Early to mid-stage, see their portfolio • Kernel Capital: Early stage, see their portfolio here.
here.
• Octopus Ventures: Early to mid-stage, see their portfolio
here.
Atomico: Stage agnostic, see their portfolio here.
• Hoxton Ventures ; Early stage with disruptive tech.
Profounders: Early and mid-stage, see their portfolio • EC1 Capital: Early stage, see their portfolio here
here.
• Connect Ventures- Early stage and very New.
AIB Seed Capital Fund: Managed by two funds which • Pen Tech Ventures- Early Stage to mid- See portfolio Here
invest under-€250k and over-€250k, see their
portfolio here. Alternatively you can check out Crunch Base / Angel List
http://www.crunchbase.com/financial-organizations

45. Active London Angels…
• http://bamlondon.blogs
pot.co.uk/p/angels_16.
html
• https://angel.co/
45

46. Step 5: So remember –What’s important
when seeking finance
• The quality and “connections” of the management team
• The size of the business opportunity/ funding need
• The scope for building a sustainable competitive advantage
• The level of risk/ security.
• And the timeliness of the proposal
Will determine the attractiveness of your business to investors,
lenders and funders
• The ability of the entrepreneur to negotiate well and of the team to
execute the business plan convincingly-
Will determine the type, price and quality of the deal that can be achieved
www.ngfc.org.uk

47. What Next
• Back to the drawing board
or
• Get Capital Enterprise support..
• http://foundercentric.com
• Intros to mentors and advisors.
• Advice on Slidedecks..
• Intros to investors…?
47

48. Recommended Slide-deck
http://www.slideshare.net/slidesthatrock/how-to-pitch-a-vc-redesigned
Ten slides. Ten is the optimal number of slides in a PowerPoint
presentation because a normal human being cannot comprehend
more than ten concepts in a meeting—and business angels are very
normal. If you must use more than ten slides to explain your
business, you probably don’t have a business. The ten topics that an
investors cares about are:
1. Summary and call to action/ what do you want?
2. Problem
3. Your solution
4. Business model
5. Underlying magic/technology
6. Marketing and sales
7. Competition
8. Team
9. Projections and milestones
10. Status and timeline
48

49. Part 5
Q &A
49

50. Part 5
“Do it My Way”
Q & A Panel of entrepreneurs and
experts
50

51. The End
www.capitalenterprise.org
51