How to attract investors 8

1. How to Attract InvestorsHow to Attract Investors
Fifth Annual Conference of the Technopolicy
Network. Halifax, Nova Scotia, Canada
September 2008
“Show Me the MONEY !$$$$!”
Professor Alan Barrell

2. Attracting Investors - Some
Issues….There will be more….
 WHO – might be the investors? Types and
motivations
 Knowing their Goals and Criteria
 Innovative Regions and Sub-Regions - special
conditions
 “Investment Readiness” – A big issue….
 Preparation, Support and Presentation
 What do Investors look for? How to find out?
 Connecting with Investors – importance of
Networking
 The “rock and hard place” of Valuation
 The issues of “Matching” – it isn’t just the money!
What else do we get ?
 The Investment Climate !!!!

3. Would you invest in this team ?

4. What DO Investors look for ?
Microsoft Corporation, 1978

5. When a market “BOOMS” - Venture Capital
Investments in E-Commerce (U.S.A.) “When Greed
overcame Fear”. We are still recovering in the
aftermath….
Source: Venture Economics
Netscape IPONetscape IPO
33rdrd
largest inlargest in
Nasdaq HistoryNasdaq History
Amazon.com IPOAmazon.com IPO
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
TotalInvested($million)

6. Stay Cool!Stay Cool!
Dilbert - Scott Adams

7. Stay Cool!Stay Cool!
Dilbert - Scott Adams

8. Stay Cool!Stay Cool!
Dilbert - Scott Adams

10. “You look at things
and ask - why?
but I dream of
things that never
were and ask -
George Bernard Shaw
why not?”
What do investors look for in an
Entrepreneur ?Entrepreneur ?

11. And they look for “change agents”
Joseph Schumpeter (1911)
“Entrepreneurs blow gales
of creative destruction.”
Role of the entrepreneur in transforming economies by
developing:
• New products
• New methods of production
• New ways of organizing
• Untapped raw materials
• Enhanced competitive performance

12. What else do investors like to see?....

13. Einstein on IMAGINATION….
“Imagination is more important than
knowledge. Knowledge is limited.
Imagination encircles the world”
Albert Einstein 1879 - 1955

14. Do investors really like Risk ?

16. If at first you don’t succeed….try again….but learn
from the mistakes! Can RISK be eliminated ?

18. Continuous Technology Revolution “Survival
of the Fastest”astest”
Compared to an average DAY in 2003….
All international phone calls1971
All airline passengers1975
All mobile phones1984
All emails1992
All SMS1998
Source: Analysys, World Bank and ITU

19. Three Converging Revolutions
Three Pervasive Technology Platforms – connecting
and networking across boundaries
BIO TECH
Pharmaceuticals
Diagnostics
Research/Info
Tools
Industrial
Genomics
Bioinformatics
Proteomics
INFO TECH
Hardware
Software
Communications
NANO TECH
Electrical
Structural
Biomedical
Energy & Environment
Biosensors
BiochipsBioelectronics
Microfluidics
Nanobiotechnology
Drug Delivery
Nanodevices
Nanosensors
Nanoelectronics

20.  Universities and centres of academic excellence
 Entrepreneurs with marketable ideas and products
 Business angels and established seed funds
 Sources of early stage venture capital
 Core of successful large companies
 Quality management teams and talent
 Supportive infrastructure
 Affordable space for growing businesses
 Access to capital markets
 Attractive living environment and accommodation
 Social and Business Networks - Connectivity
source :- Gibbons - Stanford University 1998
Characteristics for High Technology
Regions – and potential for talent and $$$$
to meet

21. Sources Of Business Finance – A Reminder
Maturity
Risk
“Our Money”“Our Money”
Family and Friends and FoolsFamily and Friends and Fools
Business AngelsBusiness Angels
Early Stage VCEarly Stage VC
Expansion CapitalExpansion Capital
B
A
N
K
F
I
N
A
N
C
E
??
Seed FundsSeed Funds
Pre-IPOPre-IPO

22. “Softer Money” – Grants etc – they
are investors….investors….
 A World of its own
 Can be a deep well
 Can be bureaucratic and “rule ridden”
 Finding and getting it can require art, skill and
patience – different from equity investing
mentality
 Understanding the processes and the
motivations of grant givers. Connecting….
 Excellent Example – UK R and D Grants
 Tax Credits and similar schemes

23. “Show Me The Money!”- More Questions
for Entrepreneurs
 Basics – Investment Readiness
 How organised are we ?
 Company structure ?
 Management Team?
 Intellectual Property?
 Vision, Purpose,Plans and Positioning Ideas?
 Advisors ? “Greyhairs and Wisdom” ? Basics
– eg Accounts and Controls ?
 “Rumsfeld Questions” – “What we DON’T
know?”

24. The Early Stage Business Balance –
what do investors look for? Do the
entrepreneurs know ?
The role of Chairman and NXDs
Inspired
Leadership
Enthusiasm
Bullshit
Courage
OptimismVision
Creativity
Management
Research &
Analysis
Caution
Process
Financial Control
Market
Knowledge

25. Valuation – how and why? – Destroying the
myths – “Valuations to die for….”
 Why do we need it ? -To indicate value
to potential investors
 What is a company worth?
- What someone will pay for it
 What is this determined by?
- Other investment choices
(there are usually MANY !)

26. Connecting Investors to Entrepreneurs
Two Way Experiences in “The
Cambridge Cluster and an
Enlightened Europe”
From – “Poacher and Gamekeeper “….
Alan Barrell
Entrepreneur in Residence – University of Cambridge

31. How and Where do Investors and EntrepreneursHow and Where do Investors and Entrepreneurs
find each other and get connected ??find each other and get connected ??

32. Cambridge
source: Cambridge
2020 report - 1998
But I work in The East of England Region –
and in France
Map of Silicon Valley inset

33. Ramsey
Chatteris Littleport
Mildenhall
Bury St Edmunds
Haverhill
Saffron Walden
Royston
St Neots
Huntingdon
HUNTINGDONSHIRE
SOUTH CAMBRIDGESHIRE
CAMBRIDGE
NORTH HERTFORDSHIRE
(PART)
ST EDMUNDSBURY
(PART)
FOREST HEATH
(PART)
EAST
CAMBRIDGESHIRE
FENLAND
(PART)
A1(M)
A14
M11
A14
A10
A14
A11
A11
A10
UTTLESFORD
(PART)
A10
A1
Greater Cambridge Partnership Area –one of nine
“Sub-regional Development Partnerships”
2001 GC Estimates
Population: 635,000
Jobs: 359,000
GVA: £12.2bn

34. Trinity College’s History and
Scientific Development – Cambridge
– Science, Innovation and Invention
 Trinity always had a strong
scientific tradition*
 First use of the word
“scientist” 1835 (Whewell)
 First European Science Park
– 1970 – Dr Sir John Bradfield
*Alumni include Newton, Clerk-Maxwell, Rayleigh, Thomson, Walton,
Rutherford, Aston, Lyle, both Braggs, Bohr, Hopkins, Klug, Kendrew

35. Cambridge
University
1960
1970
MRC
Laboratory
of Molecular
Biology
CAD
Centre
Sinclair
Radionics
CCL
Barclays Bank
1980
Cambridge
Interactive
System
Cambridge
Science Park
Acorn
PA
Technology
Eicon
Research
Ltd
Sinclair
Research Ltd
1990
Analysys
Olivetti Research
Laboratory
(acquired by
AT&T in 1999) Judge Institute of
Management
Studies
St. John
Innovation
Centre
Scientific
Generics
The Technology
Partnership
TTP
Cambridge Research and
Innovation Ltd (CRIL)
Institute of
Biotechnolog
y
Cantab
Pharmaceuticals
Hitachi
Cambridge
Laboratory
Nickerson
Biotech
Laboratory
Glaxo
2000
Toshiba
Cambridge
Research
Laboratory
Seiko Epson
Research
Lab
Unilever Cambridge
Centre for Molecular
Informatics
Cambridge
Network
Institute of
Manufacturing
Amadeus Capital
Partners
TTP Ventures
Entropic Research
Laboratory (acquired
by Microsoft in 1999)
Glaxo Institute
of Applied
Pharmacology
BP

36. The emergence of high-technology
clusters in Greater Cambridge
1971 1981 1991 2001 The future?
Scientific
Instruments
Nanomaterials
Drugs delivery
Sensors/actuators
Informatics
Instrumentation
Medical engineering
LEPs
Drug modelling
Bluetooth
Sentient computing
Telecoms
Industrial inkjet
Biosciences
Computing
Software
Scientific
Instruments
Wireless
communications
Telecoms
Industrial inkjet
Computing
Biosciences
Software
Scientific
Instruments
Hi-tech 20,200 25,100 34,900 46,200
jobs:
Computing
Software
Scientific
Instruments
Industrial inkjet
1971 1981 1991 2001 The future?
Scientific
Instruments
Nanomaterials
Drugs delivery
Sensors/actuators
Informatics
Instrumentation
Medical engineering
LEPs
Drug modelling
Bluetooth
Sentient computing
Telecoms
Industrial inkjet
Biosciences
Computing
Software
Scientific
Instruments
Telecoms
Industrial inkjet
Biosciences
Computing
Software
Scientific
Instruments
Wireless
communications
Telecoms
Industrial inkjet
Computing
Biosciences
Software
Scientific
Instruments
Wireless
communications
Telecoms
Industrial inkjet
Computing
Biosciences
Software
Scientific
Instruments
Hi-tech 20,200 25,100 34,900 46,200
jobs:
Computing
Software
Scientific
Instruments
Industrial inkjet
Computing
Software
Scientific
Instruments
Industrial inkjet
50,000

37. Cambridge Venture Capital Scene – Estimated total
value of funds: in excess of £1.5 billions
And then there were the Angels….
A Financial Cluster follows The
Technology Cluster at “boom time”
- UK and Europe
- Cambridge Region only
- UK only
Less than £1.0 million More than £3.0 million
INVESTMENT SIZE
CRIL Generics Prelude 3i
ICT
Life
Sciences Avlar
FNI
Venture
Capital
Merlin
Amadeus
Prime
Technology
Ventures
Pall Mall
Ventures
Alta
Berkeley
ET
Capital
Siemens
VC
Abingworth
Create
Ventures
Cambridge
Gateway
TTP
Ventures

38. Connecting and Information Points
and principles
 Networks and Networking – importance +++++
 Business Schools and Entrepreneurship
Centres Region wide and cross border
 Other Entrepreneurs / Support and Mentoring
Structures
 Online Channels – numerous eg….
www.funded.com
 “Network Nodes” – Individual referrals
 Cross Border contacts
 Attitudes and Culture

39. Thinking Of Angels! – we keep referring
to them !

40. US Angels – The REAL early stage
funders !
 In 2000 US business Angels invested more than
$200billions in early stage companies
 This was much more than the so called “venture capital
industry” which did not reach investment levels that
year of $150 billions.
 In the difficult year of 2002 – when VCS “sat on hands”
– Cambridge Angels kept the early stage and emerging
business sector alive and well
 Cambridge Angels are adopting the US success
model and working more closely together.

41. “Syndication Nodes” and Business Angels –
Connecting in and from Cambridge
 Cambridge has four active Angel Groups – Cambridge
Angels, Cambridge Capital Group, Equus, G.Eastern Investment Forum
 MOUs and Syndication with- Other UK Angels, Sophia Angels
( France) Luxembourg BAN, B.A.of Slovenia,US Angels Networked
with all known, useful VCs and Grant bodies
 Joint events, Deal and Portfolio Sharing
 Common Network and Portfolio Management -
Angelsoft
 Keeping well informed – eg. French Wealth Tax
changes – Transformational impact.
 Strong International VC connections

42. The Business Angels we help Entrepreneurs
look for….Cambridge Mentors Database
 Technical Expertise
 Marketing Expertise
 Contacts & Networks
 Decision Making skills
 Presentation skills
 Dealmaking skills
 Money-raising skills
 Other Financial skills
 Possible exit routes and practical help
with exit – international focus
7
Those who bring added
value – in one or all of….

43. Our Centre for Entrepreneurial Learning –
Investment Readiness and Connectivity Plus….
History:
 1999 - Cambridge Entrepreneurship Centre (CEC)
 2003 – Centre for Entrepreneurial Learning (CfEL)
CfEL Core Activities:
 To develop a portfolio of courses that inspire, and enable the start-up and
growth of ventures
 To respond to the needs of students, Departments and Colleges within
the University of Cambridge
 To share best practice with the wider community through networks and
collaboration
 To build a great team of teachers
 To deliver excellence and investment readiness
 Helping develop the Spirit of Enterprise!

44. CfEL’s Entrepreneurs in Residence
Alan Barrell
Library House
Phil O’ Donovan
Camrivox
Alex van
Someren
nCipher
Jack Lang
Serial
Entrepreneur
Dan Roach
Avlar
Bioventures
Ann Cotton
Camfed
International
John Snyder
Grapeshot
Richard Green
Ubisense
Walter de
Brouwer
Founder
of Starlab

45. CfEL’s ProgrammesCfEL’s Programmes allall
connect with investorsconnect with investors
Senior
Managers’
Programme
How to develop
and grow
companies
Summer School
‘Fast Tracking
Innovation to
Commercial Success’
I’m a Corporate
Intrapreneur or
Entrepreneurial
Manager
I’m a Solo
Entrepreneur with
a technology idea
Summer
Forum
I’m an
entrepreneur or an
entrepreneurial
academic
EnterprisersI’m a student
Enterprise Tuesday
(Term 2)
Enterprise Tuesday
(Term 1)
I’m a student or
member of staff or
local
entrepreneurial
individual
Undergraduate and
Postgraduate Assessed
Programmes
I’m a CU student
and want
Entrepreneurship
as part of my
degree
How to teach
entrepreneurship
How to
survive and
grow in the
early stages
How to get my idea
started
Some new
knowledge and
skills in business
planning
What entrepreneurship
is all about
I want to
learn...
Senior
Managers’
Programme
How to develop
and grow
companies
Summer School
‘Fast Tracking
Innovation to
Commercial Success’
I’m a Corporate
Intrapreneur or
Entrepreneurial
Manager
I’m a Solo
Entrepreneur with
a technology idea
Summer
Forum
I’m an
entrepreneur or an
entrepreneurial
academic
EnterprisersI’m a student
Enterprise Tuesday
(Term 2)
Enterprise Tuesday
(Term 1)
I’m a student or
member of staff or
local
entrepreneurial
individual
Undergraduate and
Postgraduate Assessed
Programmes
I’m a CU student
and want
Entrepreneurship
as part of my
degree
How to teach
entrepreneurship
How to
survive and
grow in the
early stages
How to get my idea
started
Some new
knowledge and
skills in business
planning
What entrepreneurship
is all about
I want to
learn...

46. • A FREE evening programme open to students, staff
and the business community
• Lectures on Tuesday evenings from 6pm
• About 1500 attended in 2006/07, coming from 50
different departments within the University of
Cambridge, 10 other Universities and 100+ private
businesses
• Close links to Cambridge University Entrepreneurs
(CUE) Business Plan Competitions
• Investor Connections ++++ from UK and Overseas
• Has been copied extensively – QinetiQ; Oxford;
Bedford; Essex; Sussex; UEA; France; Luxembourg;
Baltic States; Auckland; Canada; Australia etc.,
Helping Entrepreneurs turn Ideas into Reality and
find sources of finance….developing as a
community….

47. Developing “Enterprisers”Developing “Enterprisers”
 An intensive four day residential
programme for energetic
individuals, from any
organisation, background or
discipline .Connecting,
Networking and Learning.
 Focus on developing fundamental
entrepreneurial skills
 Networking opportunity – investors
attend
 Run by facilitators, Enterprisers
alumni and faculty members from
universities
 Unlocks creativity, confidence and a
‘can do’ attitude

48. Thank you for your attention….
More on my website –
www.alanbarrell.com
E-mail – alan@alanbarrell.com